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
                  December 31,
2008




OR




o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIESEXCHANGE
      ACT OF 1934





For the transition period from
                _____________________ to ________________________




Commission
      File 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 xNo oIndicate
      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         o
                    Filer
                  
                  Accelerated
      Filer        ̈Non-Accelerated
      Filer    o
                  (Do
      not check if a smaller reporting company)
                  Smaller
      Reporting     x
                    Company




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act.) Yes oNo x




The
number of shares outstanding of each of the issuer’s classes of common stock, as
of the latest practicable date:  435,232 shares of common stock, par
value $.01 per share, as of February 12, 2009.


1








Index to
Form 10-Q





PART
      1. FINANCIAL INFORMATION
                                                
                                                PAGEItem
      1.
                                                Financial
      StatementsCondensed
      Consolidated Balance Sheets as of December 31, 2008And
      March 31, 2008
                                                
                                                
                                                3Condensed
      Consolidated Statements of Income for the Three-MonthAnd
      Nine-Month Periods Ended December 31, 2008 and 2007
                                                
                                                
                                                4Condensed
      Consolidated Statements of Changes in Stockholders’ EquityFor
      the Nine-Month Periods ended December 31, 2008 and 2007
                                                
                                                
                                                6Condensed
      Consolidated Statements of Cash Flows for the Nine-MonthPeriods
      Ended December 31, 2008 and  2007
                                                
                                                
                                                7Notes
      to Condensed Consolidated Financial Statements
                                                
                                                
                                                9Item
      2.
                                                Management’s
      Discussion and Analysis of Financial Condition andResults
      of Operations
                                                
                                                
                                                15Item
      3.
                                                Quantitative
      and Qualitative Disclosures about Market Risk
                                                
                                                
                                                30Item
      4.
                                                Controls
      and Procedures
                                                
                                                
                                                30PART
      II. OTHER INFORMATIONItem
      1.
                                                Legal
      Proceedings
                                                
                                                
                                                31Item
      1.A.
                                                Risk
      Factors
                                                
                                                
                                                31Item
      2.
                                                Unregistered
      Sales of Equity Securities and Use of Proceeds
                                                
                                                
                                                31Item
      3.
                                                Defaults
      Upon Senior Executives
                                                
                                                
                                                31Item
      4.
                                                Submission
      of Matters to a Vote of Security Holders
                                                
                                                
                                                32Item
      5.
                                                Other
      Information
                                                
                                                
                                                32Item
      6.
                                                Exhibits
                                                
                                                
                                                32SIGNATURES
                                                
                                                
                                                33CERTIFICATIONS
                                                
                                                
                                                34




2




Item
1:


FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED BALANCE SHEETS


(In
thousands, except share data)





(Unaudited)December 31, 2008
                                        
                                        
                                        March 31, 2008ASSETSCash
      and cash equivalents
                                        
                                        $
                                        11,787
                                        
                                        
                                        $
                                        19,528Available-for-sale
      securities
                                        
                                        
                                        48,209
                                        
                                        
                                        
                                        31,535Loans,
      held for sale
                                        
                                        
                                        376
                                        
                                        
                                        
                                        101Loans,
      net of allowance for loan losses of $757 and $727at
      December 31, 2008 and March 31, 2008, respectively
                                        
                                        
                                        84,528
                                        
                                        
                                        
                                        76,145Federal
      Reserve and Federal Home Loan Bank stock
                                        
                                        
                                        808
                                        
                                        
                                        
                                        808Premises
      and equipment, net
                                        
                                        
                                        3,724
                                        
                                        
                                        
                                        2,851Foreclosed
      assets held for sale, net
                                        
                                        
                                        90
                                        
                                        
                                        
                                        16Interest
      receivable
                                        
                                        
                                        759
                                        
                                        
                                        
                                        758Cash
      surrender value of life insurance
                                        
                                        
                                        1,440
                                        
                                        
                                        
                                        1,396Other
      assets
                                        
                                        
                                        773
                                        
                                        
                                        
                                        671Total
      Assets
                                        
                                        $
                                        152,494
                                        
                                        
                                        $
                                        133,809LIABILITIES
      AND STOCKHOLDERS’ EQUITYLiabilitiesDeposits
                                        
                                        $
                                        121,530
                                        
                                        
                                        $
                                        103,898Other
      borrowings
                                        
                                        
                                        17,182
                                        
                                        
                                        
                                        16,253Advances
      from borrowers for taxes and insurance
                                        
                                        
                                        99
                                        
                                        
                                        
                                        149Accrued
      income taxes
                                        
                                        
                                        136
                                        
                                        
                                        
                                        159Deferred
      income taxes
                                        
                                        
                                        200
                                        
                                        
                                        
                                        2Interest
      payable
                                        
                                        
                                        261
                                        
                                        
                                        
                                        262Other
      liabilities
                                        
                                        
                                        1,123
                                        
                                        
                                        
                                        1,210Total
      Liabilities
                                        
                                        
                                        140,531
                                        
                                        
                                        
                                        121,933Commitments
      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 December 31, 2008– 435,232 shares; March 31,
      2008 – 451,464 shares
                                        
                                        
                                        9
                                        
                                        
                                        
                                        9Additional
      paid-in capital, December 31, 2008 - 0 shares;  March 31, 2008 –
      7,231 shares
                                        
                                        
                                        8,772
                                        
                                        
                                        
                                        8,491Retained
      earnings
                                        
                                        
                                        10,381
                                        
                                        
                                        
                                        10,114Accumulated
      other comprehensive income
                                        
                                        
                                        636
                                        
                                        
                                        
                                        247Treasury
      stock, at costCommon:
      December 31, 2008 – 424,393 shares; March 31, 2008 – 400,930
      shares
                                        
                                        
                                        (7,835
                                        )
                                        
                                        
                                        (6,985
                                        )Total
      Stockholders’ Equity
                                        
                                        
                                        11,963
                                        
                                        
                                        
                                        11,876Total
      Liabilities and Stockholders’ Equity
                                        
                                        $
                                        152,494
                                        
                                        
                                        $
                                        133,809





See Notes
to Condensed Consolidated Financial Statements.


3


FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF INCOME


For the
Three and Nine-Month Periods Ended December 31, 2008 and 2007


(In
thousands, except per share data)


(Unaudited)





Three-Month Period
                    
                    
                    Nine-Month Period2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007Interest
      and Dividend Income:Loans
                    
                    $
                    1,364
                    
                    
                    $
                    1,448
                    
                    
                    $
                    4,020
                    
                    
                    $
                    4,240Securities:Taxable
                    
                    
                    527
                    
                    
                    
                    314
                    
                    
                    
                    1,456
                    
                    
                    
                    978Tax-exempt
                    
                    
                    27
                    
                    
                    
                    23
                    
                    
                    
                    69
                    
                    
                    
                    72Other
      interest income
                    
                    
                    8
                    
                    
                    
                    75
                    
                    
                    
                    117
                    
                    
                    
                    183Dividends
      on Federal Reserve Bank stock
                    
                    
                    3
                    
                    
                    
                    2
                    
                    
                    
                    8
                    
                    
                    
                    16Total
      Interest and Dividend Income
                    
                    
                    1,929
                    
                    
                    
                    1,862
                    
                    
                    
                    5,670
                    
                    
                    
                    5,489Interest
      Expense:Deposits
                    
                    
                    762
                    
                    
                    
                    688
                    
                    
                    
                    2,156
                    
                    
                    
                    1,956Other
      borrowings
                    
                    
                    23
                    
                    
                    
                    137
                    
                    
                    
                    129
                    
                    
                    
                    410Total
      Interest Expense
                    
                    
                    785
                    
                    
                    
                    825
                    
                    
                    
                    2,285
                    
                    
                    
                    2,366Net
      Interest Income
                    
                    
                    1,144
                    
                    
                    
                    1,037
                    
                    
                    
                    3,385
                    
                    
                    
                    3,123Provision
      for Loan Losses
                    
                    
                    30
                    
                    
                    
                    30
                    
                    
                    
                    190
                    
                    
                    
                    60Net
      Interest Income After Provision for Loan Losses
                    
                    
                    1,114
                    
                    
                    
                    1,007
                    
                    
                    
                    3,195
                    
                    
                    
                    3,063Non-interest
      income:Charges
      and fees on deposit accounts
                    
                    
                    223
                    
                    
                    
                    226
                    
                    
                    
                    671
                    
                    
                    
                    688Charges
      and other fees on loans
                    
                    
                    26
                    
                    
                    
                    34
                    
                    
                    
                    111
                    
                    
                    
                    91Net
      gain on sale of loans
                    
                    
                    27
                    
                    
                    
                    37
                    
                    
                    
                    99
                    
                    
                    
                    92Net
      gain on sale of foreclosed assets
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    3Net
      realized gain on sale of available-for-sale investments
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    2
                    
                    
                    
                    —Other
                    
                    
                    108
                    
                    
                    
                    97
                    
                    
                    
                    342
                    
                    
                    
                    298Total
      Non-Interest Income
                    
                    
                    384
                    
                    
                    
                    394
                    
                    
                    
                    1,225
                    
                    
                    
                    1,172Non-interest
      expense:Compensation
      and employee benefits
                    
                    
                    644
                    
                    
                    
                    537
                    
                    
                    
                    1,945
                    
                    
                    
                    1,637Occupancy
      and equipment
                    
                    
                    132
                    
                    
                    
                    157
                    
                    
                    
                    465
                    
                    
                    
                    461Foreclosed
      property expense
                    
                    
                    3
                    
                    
                    
                    —
                    
                    
                    
                    10
                    
                    
                    
                    2Data
      processing
                    
                    
                    79
                    
                    
                    
                    59
                    
                    
                    
                    198
                    
                    
                    
                    161Audit,
      legal and other professional
                    
                    
                    49
                    
                    
                    
                    51
                    
                    
                    
                    148
                    
                    
                    
                    141Advertising
                    
                    
                    59
                    
                    
                    
                    26
                    
                    
                    
                    156
                    
                    
                    
                    89Telephone
      and postage
                    
                    
                    48
                    
                    
                    
                    24
                    
                    
                    
                    107
                    
                    
                    
                    71Net
      loss on sale of foreclosed property
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    4
                    
                    
                    
                    —Net
      loss on disposal of fixed assets
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    4Other
                    
                    
                    201
                    
                    
                    
                    153
                    
                    
                    
                    477
                    
                    
                    
                    450Total
      Non-Interest Expense
                    
                    
                    1,215
                    
                    
                    
                    1,007
                    
                    
                    
                    3,510
                    
                    
                    
                    3,016




See Notes
to Condensed Consolidated Financial Statements.


4




FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF INCOME (CONTINUED)


For the
Three and Nine-Month Periods Ended December 31, 2008 and 2007


(In
thousands, except per share data)


(Unaudited)





Three-Month Period
                    
                    
                    Nine-Month Period2008
                    
                    
                    2007
                    
                    
                    2008
                    
                    
                    2007Income
      before income taxes
                    
                    
                    283
                    
                    
                    
                    394
                    
                    
                    
                    910
                    
                    
                    1,219Provision
      for income taxes
                    
                    
                    89
                    
                    
                    
                    133
                    
                    
                    
                    298
                    
                    
                    
                    393Net
      Income
                    
                    $
                    194
                    
                    
                    $
                    261
                    
                    
                    $
                    612
                    
                    
                    $
                    826Earnings
      Per Share-Basic
                    
                    $
                    0.46
                    
                    
                    $
                    0.60
                    
                    
                    $
                    1.41
                    
                    
                    $
                    1.82Earnings
      Per Share-Diluted
                    
                    $
                    0.44
                    
                    
                    $
                    0.57
                    
                    
                    $
                    1.36
                    
                    
                    $
                    1.73Comprehensive IncomeNet
      Income
                    
                    $
                    194
                    
                    
                    $
                    261
                    
                    
                    $
                    612
                    
                    
                    $
                    826Other
      Comprehensive Income:Unrealized
      gains on securities
                    
                    
                    643
                    
                    
                    
                    357
                    
                    
                    
                    625
                    
                    
                    
                    309Realized
      gain on securities
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (2
                    )
                    
                    
                    —Related
      tax effects
                    
                    
                    (241
                    )
                    
                    
                    (134
                    )
                    
                    
                    (234
                    )
                    
                    
                    (116
                    )Other
      Comprehensive Income
                    
                    
                    402
                    
                    
                    
                    223
                    
                    
                    
                    389
                    
                    
                    
                    193Comprehensive
      Income
                    
                    $
                    596
                    
                    
                    $
                    484
                    
                    
                    $
                    1,001
                    
                    
                    $
                    1,019





See Notes
to Condensed Consolidated Financial Statements.


5




FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY


For the
Nine-Months Ended December 31, 2008 and 2007


(In
thousands, except per share data)


(Unaudited)




AccumulatedAdditional
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    OtherCommon Stock
                                                    
                                                    
                                                    Paid-in
                                                    
                                                    
                                                    Retained
                                                    
                                                    
                                                    Comprehensive
                                                    
                                                    
                                                    TreasuryShares
                                                    
                                                    
                                                    Amount
                                                    
                                                    
                                                    Capital
                                                    
                                                    
                                                    Earnings
                                                    
                                                    
                                                    Income
      (Loss)
                                                    
                                                    
                                                    Stock
                                                    
                                                    
                                                    TotalBalance,
      April 1, 2007
                                                    
                                                    
                                                    484,908
                                                    
                                                    
                                                    $
                                                    9
                                                    
                                                    
                                                    $
                                                    8,406
                                                    
                                                    
                                                    $
                                                    9,459
                                                    
                                                    
                                                    $
                                                    (199
                                                    )
                                                    
                                                    $
                                                    (5,785
                                                    )
                                                    
                                                    $
                                                    11,890Comprehensive
      incomeNet
      income
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    826
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    826Change in unrealized
      appreciation on available-for-sale securities, net of taxes of $116
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    193
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    193Total
      comprehensive income
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    1,019Treasury
      shares purchased
                                                    
                                                    
                                                    (34,928
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (1,160
                                                    )
                                                    
                                                    
                                                    (1,160
                                                    )Dividends
      on common stock, $0.65 per share
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (316
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (316
                                                    )Stock
      options exercised
                                                    
                                                    
                                                    4,000
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    66
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    69
                                                    
                                                    
                                                    
                                                    135Incentive
      compensation
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (10
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (10
                                                    )Balance,
      December 31, 2007
                                                    
                                                    
                                                    453,980
                                                    
                                                    
                                                    $
                                                    9
                                                    
                                                    
                                                    $
                                                    8,462
                                                    
                                                    
                                                    $
                                                    9,969
                                                    
                                                    
                                                    $
                                                    (6
                                                    )
                                                    
                                                    $
                                                    (6,876
                                                    )
                                                    
                                                    $
                                                    11,558Balance,
      April 1, 2008
                                                    
                                                    
                                                    451,464
                                                    
                                                    
                                                    $
                                                    9
                                                    
                                                    
                                                    $
                                                    8,491
                                                    
                                                    
                                                    $
                                                    10,114
                                                    
                                                    
                                                    $
                                                    247
                                                    
                                                    
                                                    $
                                                    (6,985
                                                    )
                                                    
                                                    $
                                                    11,876Comprehensive
      incomeNet
      income
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    612
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    612Realized
      gain on securities soldChange
      in unrealized appreciation on available-for-sale securities, net of taxes
      of $234
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    389
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    389Total
      comprehensive income
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    1,001Treasury
      shares purchased
                                                    
                                                    
                                                    (25,684
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (889
                                                    )
                                                    
                                                    
                                                    (889
                                                    )Transfer
      of Unallocated Recognition and Retention Shares to Treasury
      Shares
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    125
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (125
                                                    )
                                                    
                                                    
                                                    —Dividends
      on common stock, $0.75 per share
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (345
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (345
                                                    )Stock
      options exercised
                                                    
                                                    
                                                    9,452
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    168
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    164
                                                    
                                                    
                                                    
                                                    332Incentive
      compensation
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (12
                                                    )
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    
                                                    (12
                                                    )Balance,
      December 31, 2008
                                                    
                                                    
                                                    435,232
                                                    
                                                    
                                                    $
                                                    9
                                                    
                                                    
                                                    $
                                                    8,772
                                                    
                                                    
                                                    $
                                                    10,381
                                                    
                                                    
                                                    $
                                                    636
                                                    
                                                    
                                                    $
                                                    (7,835
                                                    )
                                                    
                                                    $
                                                    11,963





See Notes
to Condensed Consolidated Financial Statements.


6




FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS


For the
Nine-Months Ended December 31, 2008 and 2007


(In
thousands)


(Unaudited)





2008
                
                
                2007Cash
      flows from operating activities:Net
      income
                
                $
                612
                
                
                $
                826Items
      not requiring (providing) cashDepreciation
      and amortization
                
                
                193
                
                
                
                221Provision
      for loan losses
                
                
                190
                
                
                
                60Amortization
      of premiums and discounts on securities
                
                
                (19
                )
                
                
                (31
                )Amortization
      of loan servicing rights
                
                
                48
                
                
                
                40Compensation
      related to the exercise of options
                
                
                182
                
                
                
                69Deferred
      income taxes
                
                
                (36
                )
                
                
                (28
                )Originations
      of mortgage loans held for sale
                
                
                (6,503
                )
                
                
                (5,835
                )Proceeds
      from the sale of mortgage loans
                
                
                6,327
                
                
                
                5,927Net
      gain on loans sold
                
                
                (99
                )
                
                
                (92
                )Net
      realized gain on available for sale securities sold
                
                
                (2
                )
                
                
                —Net
      loss (gain) on sale of foreclosed property
                
                
                4
                
                
                
                (3
                )Net
      loss on disposal of fixed assets
                
                
                —
                
                
                
                4Cash
      surrender value of life insurance
                
                
                (44
                )
                
                
                (41
                )Changes
      in:Interest
      receivable
                
                
                (1
                )
                
                
                9Other
      assets
                
                
                (179
                )
                
                
                (139
                )Accrued
      income taxes
                
                
                (23
                )
                
                
                54Interest
      payable
                
                
                (1
                )
                
                
                36Other
      liabilities
                
                
                (87
                )
                
                
                19Net
      cash provided by operating activities
                
                
                562
                
                
                
                1,096Cash
      flows from investing activities:Purchase
      of securities available for sale
                
                
                (23,505
                )
                
                
                (2,072
                )Proceeds
      from maturities of available for sale securities
                
                
                1,100
                
                
                
                300Proceeds
      from sale of available for sale securities
                
                
                953
                
                
                
                —Repayments
      of principal on mortgage-backed securities
                
                
                5,422
                
                
                
                3,765Net
      change in loans
                
                
                (8,663
                )
                
                
                (8,589
                )Proceeds
      from sale of foreclosed assets
                
                
                12
                
                
                
                27Purchase
      of premises and equipment
                
                
                (1,037
                )
                
                
                (45
                )Net
      cash used in investing activities
                
                
                (25,718
                )
                
                
                (6,614
                )





See Notes
to Condensed Consolidated Financial Statements.


7




FIRST
ROBINSON FINANCIAL CORPORATION


CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)


For The
Nine-Months Ended December 31, 2008 and 2007


(In
thousands)


(Unaudited)




2008
                    
                    
                    2007Cash
      flows from financing activities:Net
      increase in deposits
                    
                    $
                    17,632
                    
                    
                    $
                    9,268Proceeds
      from other borrowings
                    
                    
                    110,938
                    
                    
                    
                    99,464Repayment
      of other borrowings
                    
                    
                    (110,009
                    )
                    
                    
                    (93,319
                    )Proceeds
      from federal funds purchased
                    
                    
                    —
                    
                    
                    
                    95,955Repayment
      of federal funds purchased
                    
                    
                    —
                    
                    
                    
                    (95,955
                    )Purchase
      of incentive plan shares
                    
                    
                    (12
                    )
                    
                    
                    (10
                    )Proceeds
      received from exercise of stock options
                    
                    
                    150
                    
                    
                    
                    66Purchase
      of treasury stock
                    
                    
                    (889
                    )
                    
                    
                    (1,160
                    )Dividends
      paid
                    
                    
                    (345
                    )
                    
                    
                    (316
                    )Net
      decrease in advances from borrowers for taxes and
insurance
                    
                    
                    (50
                    )
                    
                    
                    (48
                    )Net
      cash  provided by financing activities
                    
                    
                    17,415
                    
                    
                    
                    13,945(Decrease)
      increase in cash and cash equivalents
                    
                    
                    (7,741
                    )
                    
                    
                    8,427Cash
      and cash equivalents at beginning of period
                    
                    
                    19,528
                    
                    
                    
                    4,049Cash
      and cash equivalents at end of period
                    
                    $
                    11,787
                    
                    
                    $
                    12,476Supplemental
      Cash Flows Information:Interest
      paid
                    
                    $
                    2,284
                    
                    
                    $
                    2,330Income
      taxes paid (net of refunds)
                    
                    
                    382
                    
                    
                    
                    367Real
      estate acquired in settlement of loans
                    
                    
                    90
                    
                    
                    
                    24





See Notes
to Condensed Consolidated Financial Statements.


8





FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




1.
            Basis of
      Presentation





The
condensed consolidated financial statements include the accounts of First
Robinson Financial Corporation (the “Company”) and its wholly owned subsidiary,
First Robinson Savings Bank, National Association (the “Bank”).  All
significant intercompany accounts and transactions have been eliminated in
consolidation.  The accompanying condensed consolidated financial
statements are unaudited and should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company’s Form 10-KSB
filed with the Securities and Exchange Commission.  The accompanying
unaudited interim condensed consolidated financial statements have been prepared
in accordance with the rules and regulations for reporting on  Form
10-Q and Article 8-03 of Regulation of S-X.  Accordingly, they do not
include information or footnotes necessary for a complete presentation of
financial condition, results of operations, changes in stockholders’ equity, and
cash flows in conformity with accounting principles generally accepted in the
United States of America.  In the opinion of management of the
Company, the unaudited condensed consolidated financial statements reflect all
adjustments (consisting of normal recurring adjustments) necessary to present
fairly the financial position of the Company at December 31, 2008, the results
of its operations for the three month and nine month periods ended December 31,
2008 and 2007, the changes in stockholders’ equity for the nine month periods
ended December 31, 2008 and 2007, and cash flows for nine month periods ended
December 31, 2008 and 2007.  The results of operations for those
months ended December 31, 2008 are not necessarily indicative of the results to
be expected for the full year.





The
Condensed Consolidated Balance Sheet of the Company, as of March 31, 2008, has
been derived from the audited Consolidated Balance Sheet for the Company as of
that date.





2.
            Newly Adopted
      Accounting Pronouncements




Effective
April 1, 2008, the Company adopted Statement of Financial Standards
No. 157, Fair Value
Measurements(FAS 157). FAS 157 defines fair value, establishes a
framework for measuring fair value and expands disclosures about fair value
measurements. FAS 157 has been applied prospectively as of the beginning of the
year.




FAS 157
defines fair value as the price that would be received to sell an asset or paid
to transfer a liability in an orderly transaction between market participants at
the measurement date. FAS 157 also establishes a fair value hierarchy which
requires an entity to maximize the use of observable inputs and minimize the use
of unobservable inputs when measuring fair value. The standard describes three
levels of inputs that may be used to measure fair value:




Level 1
              Quoted
      prices in active markets for identical assets or
    liabilities.Level 2
              Observable
      inputs other than Level 1 prices, such as quoted prices for similar assets
      or liabilities; quoted prices in markets that are not active; or other
      inputs that are observable or can be corroborated by observable market
      data for substantially the full term of the assets or
      liabilities.Level 3
              Unobservable
      inputs that are supported by little or no market activity and that are
      significant to the fair value of the assets or
  liabilities.




Following
is a description of the valuation methodologies used for instruments measured at
fair value on a recurring basis and recognized in the accompanying condensed
consolidated balance sheet at December 31, 2008.




Available-for-Sale
Securities




The fair
value of available-for-sale securities are determined by various valuation
methodologies. Where quoted market prices are available in an active market,
securities are classified within Level 1. The Company has no Level 1 securities.
If quoted market prices are not available, then fair values are estimated using
pricing models or quoted prices of securities with similar characteristics.
Level 2 securities include obligations of U.S. government corporations and
agencies, obligations of states and political subdivisions, mortgage-backed
securities, and collateralized mortgage obligations. In certain cases where
Level 1 or Level 2 inputs are not available, securities are classified within
Level 3 of the hierarchy.  The Company has no Level 3
available-for-sale securities.


9





FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




The
following table presents the Company’s assets that are measured at fair value on
a recurring basis and the level within the FAS 157 hierarchy in which the fair
value measurements fall as of December 31, 2008 (in thousands):





Carrying
      value at December 31, 2008Description
                
                Fair Value
                
                
                Quoted Prices
                  in
                  Active Markets
                  for Identical
                  Assets
                  (Level 1)
                
                
                Significant
                  Other
                  Obervable
                  Inputs
                  (Level 2)
                
                
                Significant
                  Unobservable
                  Inputs
                  (Level 3)Available-for-sale
      securities
                
                $
                48,209
                
                
                $
                —
                
                
                $
                48,209
                
                
                $
                —




The
Company may be required, from time to time, to measure certain other financial
assets and liabilities on a nonrecurring basis. These adjustments to fair value
usually result from application of lower-of-cost-or-market accounting or
write-downs of individual assets. For assets measured at fair value on a
nonrecurring basis in the first nine months of fiscal 2009 that were still held
on the balance sheet at December 31, 2008, the following table provides the
level of valuation assumptions used to determine each adjustment and the fair
value of the assets at December 31, 2008 (in thousands).




Carrying
      value at December 31, 2008Quoted Prices in
                  
                  
                  SignificantActive Markets
                  
                  
                  Other
                  
                  
                  Significantfor
      Identical
                  
                  
                  Observable
                  
                  
                  UnobservableAssets
                  
                  
                  Inputs
                  
                  
                  InputsDescription
                  
                  Fair
      Value
                  
                  
                  (Level
      1)
                  
                  
                  (Level
      2)
                  
                  
                  (Level
      3)Impaired
      loans
                  
                  $
                  63
                  
                  
                  $
                  —
                  
                  
                  $
                  —
                  
                  
                  $
                  63




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.





In
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities – Including an Amendment of FASB Statement No.
115.  This Statement permits entities to choose to measure many
financial instruments and certain other items at fair
value.  Unrealized gains and losses on items for which the fair value
option has been elected will be reported in earnings.  The objective
is to improve financial reporting by providing entities with the opportunity to
mitigate volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions.  This Statement is expected to expand the use of fair
value measurement, which is consistent with the FASB’s long-term measurement
objectives for accounting for financial instruments.  SFAS No. 159 is
effective for fiscal years beginning after November 15, 2007.  The
Company has not elected the fair value option for any financial assets or
liabilities as of December 31, 2008.


10




FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




3.
            Federal Home Loan Bank
      Stock





The
Company owns approximately $642,000 of Federal Home Loan Bank of Chicago
(“FHLB”) stock.  During the third quarter of 2007, the FHLB of Chicago
received a Cease and Desist Order from its regulator, the Federal Housing
Finance Agency.  The order generally prohibits capital stock
repurchases and redemptions until a time to be determined by the Federal Housing
Finance Agency.  With regard to dividends, which have not been
declared since July 24, 2007,  the FHLB will continue to assess its
dividend capacity each quarter and make appropriate requests for
approval.  Management performed an analysis and deemed the Company’s
investment in FHLB stock to be not impaired as of December 31,
2008.





During
the second quarter of 2008, the FHLB reported that it will no longer enter into
new master commitments or renew existing master commitments to purchase mortgage
loans from participating financial institutions under the Mortgage Partnership
Finance (“MPF”) program.  It continued to fund new loans under
existing master commitments through October 31, 2008.  In September 2008,
the FHLB announced a new MPF program, MPF Xtra, pursuant to which the FHLB will
sell a participant’s loans to Fannie Mae. As with the MPF program, the MPF Xtra
product does not require a credit enhancement reserve.  The Company is
currently participating in the new MPF Xtra program.





4.
            Authorized Share
      Repurchase Program





On July
24, 2008, the Board of Directors of the Company voted to approve the extension
and expansion of the repurchase program of its equity stock approved on
September 18, 2007.  The Company may repurchase up to 22,000
additional shares of the Company’s outstanding common stock in the open market
or in negotiated private transactions from time to time when deemed appropriate
by management. The increase represents approximately 5% of the Company’s issued
and outstanding shares.  As of July 24, 2008, the Company had
repurchased 20,108 shares of its common stock out of the 25,000 shares that had
been previously authorized for repurchase.  As a result of these
actions, the Company is currently authorized to repurchase 26,892 shares of
common stock.  The program, with an original expiration date of
September 17, 2008, has been extended to August 1, 2009 or  the
earlier of the completion of the repurchase of the 26,892
shares.   As of December 31, 2008, 22,698 shares of the 26,892
have been purchased in the expanded program leaving 4,194 remaining to be
purchased.





5.
            Stock-based
      Compensation





On July
29, 1998, the stockholders of the Company approved a Stock Option Plan (“SOP”)
and a Recognition and Retention Plan (“RRP”).  Options and restricted
shares were granted to directors, officers and employees at the fair value of
the shares as of that date.  The plans were for a period of ten (10)
years with a five year vesting period for both plans from the date of the
grant.  Prior to April 1, 2006 the Company accounted for the Plan
under the recognition and measurement provisions of Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
Interpretations.





In
December 2004, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 123 (revised 2004),
"Share Based Payment," which established standards for the accounting for
transactions in which an entity exchanges its equity instruments for goods or
services, and focuses primarily on accounting for transactions in which an
entity obtains employee services. The SFAS requires a public entity to measure
the cost of employee services received in exchange for its equity instruments
based on the fair value at the grant date (with limited exceptions) and
recognize that cost over the service period. This statement revises SFAS No.
123, "Accounting for Stock-Based Compensation," and supersedes APB Opinion No.
25, "Accounting for Stock Issued to Employees."  Effective April 1,
2006, the Company adopted the provisions of SFAS No. 123 (revised 2004). As a
result of adopting SFAS No. 123R on April 1, 2006, the Company did not record
any additional compensation expense, as no stock options had been granted in
recent years and options granted were fully vested prior to adoption. However,
on April 1, 2006, the Company reclassified $125,000 of unearned compensation, or
7,231 shares, related to previously recognized compensation for restricted share
awards that had been vested as of that date to additional paid-in capital as
these awards represent equity awards as defined in SFAS No.
123R.   The RRP expired July 29, 2008 and the unallocated 7,231
shares were transferred to Treasury Stock at that time.


11





FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




6.
            Earnings Per Share for
      the Three-Month Periods





Basic
earnings per share is calculated by dividing net income by the weighted average
number of common shares outstanding during the period.  Diluted
earnings per share gives effect to the increase in the average shares
outstanding which would have resulted from the exercise of dilutive stock
options.  As of December 31, 2008, all outstanding options had been
exercised.  Therefore, there is no dilutive effect with regards to
options for the earnings per share calculation for the three month period ended
December 31, 2008.  The components of basic and diluted earnings per
share for the three months ended December 31, 2008 and 2007 were computed as
follows (dollar amounts in thousands except share data):





WeightedAverage
                      
                      
                      Per ShareIncome
                      
                      
                      Shares
                      
                      
                      AmountFor
      the Three-Months Ended December 31, 2008:Basic
      Earnings per Share:Income
      available to common stockholders
                      
                      $
                      194
                      
                      
                      
                      426,388
                      
                      
                      $
                      0.46Effect
      of Dilutive Securities:Incentive
      plan shares
                      
                      
                      
                      
                      
                      
                      16,299Diluted
      Earnings per Share:Income
      available to common stockholders
                      
                      $
                      194
                      
                      
                      
                      442,687
                      
                      
                      $
                      0.44For
      the Three-Months Ended December 31, 2007:Basic
      Earnings per Share:Income
      available to common stockholders
                      
                      $
                      261
                      
                      
                      
                      437,534
                      
                      
                      $
                      0.60Effect
      of Dilutive Securities:Incentive
      plan shares
                      
                      
                      
                      
                      
                      
                      16,287Stock
      options
                      
                      
                      
                      
                      
                      
                      6,050Diluted
      Earnings per Share:Income
      available for common stockholders
                      
                      $
                      261
                      
                      
                      
                      459,871
                      
                      
                      $
                      0.57




12





FIRST ROBINSON FINANCIAL
CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS




7.
            Earnings Per Share for
      the Nine-Month Periods





Basic
earnings per share is calculated by dividing net income by the weighted average
number of common shares outstanding during the period.  Diluted
earnings per share gives effect to the increase in the average shares
outstanding which would have resulted from the exercise of dilutive stock
options.  As of December 31, 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 nine month period ended
December 31, 2008.   The components of basic and diluted earnings
per share for the nine months ended December  31, 2008 and 2007 were
computed as follows (dollar amounts in thousands except share
data):




WeightedAverage
                                                
                                                
                                                Per ShareIncome
                                                
                                                
                                                Shares
                                                
                                                
                                                AmountFor
      the Nine-Months Ended December 31, 2008:Basic
      Earnings per Share:Income
      available to common stockholders
                                                
                                                $
                                                612
                                                
                                                
                                                
                                                435,038
                                                
                                                
                                                $
                                                1.41Effect
      of Dilutive Securities:Unearned
      incentive plan shares
                                                
                                                
                                                
                                                
                                                
                                                
                                                16,139Diluted
      Earnings per Share:Income
      available to common stockholders
                                                
                                                $
                                                612
                                                
                                                
                                                
                                                451,177
                                                
                                                
                                                $
                                                1.36For
      the Nine-Months Ended December 31, 2007:Basic
      Earnings per Share:Income
      available to common stockholders
                                                
                                                $
                                                826
                                                
                                                
                                                
                                                454,479
                                                
                                                
                                                $
                                                1.82Effect
      of Dilutive Securities:Unearned
      incentive plan shares
                                                
                                                
                                                
                                                
                                                
                                                
                                                16,193Stock
      options
                                                
                                                
                                                
                                                
                                                
                                                
                                                6,054Diluted
      Earnings per Share:Income
      available for common stockholders
                                                
                                                $
                                                826
                                                
                                                
                                                
                                                476,726
                                                
                                                
                                                $
                                                1.73




8.
            Current Economic
      Conditions




The
current economic environment presents financial institutions with unprecedented
circumstances and challenges which in some cases resulted in large declines in
the fair values of investments and other assets, constraints on liquidity and
significant credit quality problems including severe volatility in the valuation
of real estate and other collateral supporting loans.  The financial
statements have been prepared using values and information currently available
to the Company.





Given the
volatility of current economic conditions, the values of assets and liabilities
recorded in the financial statements could change rapidly, resulting in material
future adjustments in asset values, the allowance for loan losses, and capital
that could negatively impact the Company’s ability to meet regulatory capital
requirements and maintain sufficient liquidity.


13




FIRST
ROBINSON FINANCIAL CORPORATION


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS





9.
            Recent Accounting
      Pronouncements





In
October 2008, the Financial Accounting Standards Board (‘FASB’) issued FASB
Staff Position No. 157-3, “Determining the Fair Value of a Financial Asset When
the Market for That Asset is Not Active.”  FSP 157-3 clarifies the
application of Statement of Financial Accounting Standards No. 157 (FAS 157),
“Fair Value Measurements,” in a market that is not active and provides an
example to illustrate key considerations in determining fair value of financial
assets when the market for that financial asset is not active.  FSP
157-3 applies to financial assets within the scope of accounting prouncements
that require or permit fair value measurements in accordance with FAS
157.  FSP 157-3 was effective upon the issuance and included prior
periods for which financial statements had not been issued.  The
application of FSP 157-3 did not have a material impact on the Company’s
condensed consolidated financial statements





In
March 2008, the Financial Accounting Standards Board (“FASB”) issued
Statement of Financial Accounting Standards No. 161 (FAS 161), “Disclosures
about Derivative Instruments and Hedging Activities — an amendment of FASB
Statement No. 133.” FAS 161 requires qualitative disclosures about
objectives and strategies for using derivatives, quantitative disclosures about
fair value amounts of gain and losses on derivative instruments, and disclosures
about credit-risk-related contingent features in derivative agreements. FAS 161
is effective for fiscal years beginning after November 15, 2008. The
Company does not expect the implementation of FAS 161 to have a material impact
on its consolidated financial statements.





In
December, 2007, the FASB issued Statement of Financial Standards No. 160
(FAS 160), “Noncontrolling Interests in Consolidated Financial Statements — an
amendment of ARB No. 51.” FAS 160 requires that a noncontrolling interest
in a subsidiary be reported separately within equity and the amount of
consolidated net income specifically attributable to the noncontrolling interest
be identified in the consolidated financial statements. It also calls for
consistency in the manner of reporting changes in the parent’s ownership
interest and requires fair value measurement of any noncontrolling equity
investment retained in deconsolidation. FAS 160 is effective for fiscal years
beginning after December 15, 2008. The Company does not expect the
implementation of FAS 160 to have a material impact on its consolidated
financial statements.





In
December 2007, the FASB issued Statement of Financial Accounting Standards
No. 141(R) (FAS 141(R)), “Business Combinations.” FAS 141(R) will
significantly change the financial accounting and reporting of business
combination transactions. FAS 141(R) establishes principles for how an acquirer
recognizes and measures the identifiable assets acquired, liabilities assumed,
and any noncontrolling interest in the acquiree; recognizes and measures
goodwill acquired in the business combination or a gain from a bargain purchase;
and determines what information to disclose to enable users of the financial
statements to evaluate the nature and financial effects of the business
combination. FAS 141(R) is effective for acquisition dates in fiscal years
beginning after December 15, 2008. The Company does not expect the
implementation of FAS 141(R) to have a material impact on its consolidated
financial statements.





In
January 2008, the FASB issued Staff Position (FSP) EITF 99-20-1.  This
FSP amends the impairment guidance in EITF Issue No. 99-20, “Recognition of
Interest Income and Impairment on Purchased Beneficial Interests and Beneficial
Interests  That Continue to be Held by a Transforer in Securitized
Financial Assets,” to achieve more consistent determination of whether an
other-than-temporary impairment has occured.  The FSP also retains and
emphasizes the objective of an other-than-temporary impairment
assessment  and the related disclosure requirements  in FASB
Statement No. 115, “Accounting for Certain Investments in Debt and Equity
Securities”.  The FSP is effective for interm and annual periods
ending after December 15, 2008.  The FSP had no effect on the
Company.


14


Item  2:


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Forward-Looking
Statements





When used
in this filing and in future filings by First Robinson Financial Corporation
(the “Company”) with the Securities and Exchange Commission, in the Company’s
press releases or other public or shareholder communications, or in oral
statements made with the approval of an authorized executive officer, the words
or phrases “believe,” “expect,” “should,” “would be,” “will allow,” “intends
to,” “will likely result,” “are expected to,” “will continue,” “is anticipated,”
“estimate,” “project” or similar expressions are intended to identify
“forward-looking statements” within the meaning of the Private Securities
Litigation Reform Act of 1995. Examples of forward-looking statements include,
but are not limited to, estimates with respect to our financial condition,
results of operations and business that are subject to various factors that
could cause actual results to differ materially from these estimates and most
other statements that are not historical in nature. Such statements are subject
to risks and uncertainties, including but not limited to changes in economic
conditions 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.





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 four full service offices and
one drive-up facility in Crawford County.  A full-service branch in
Vincennes, Indiana opened December 29, 2008. Assets grew $18.7 million from
$133.8 million at March 31, 2008 to $152.5 million at December 31,
2008.  See “Financial Condition” for more information. The Company
earned $194,000 for the three month period ending December 31, 2008, versus
$261,000 in the same period of 2007, a decrease of 25.7%. Earnings for the three
months ended December 31, 2008 were positively impacted by a $107,000, or 10.6%,
increase in net interest income after provision for loan losses which was more
than offset by an increase of $208,000, or 20.7%, in non-interest expense and a
decrease of $10,000, or 2.5% in non-interest income when compared to the prior
year. Basic earnings per share for the December 31, 2008 three month period were
$0.46 per share versus $0.60 per share for the same period of
2007.  Diluted earnings per share reflect incentive plan shares and
the potential dilutive impact of stock options granted under the stock option
plan.  Diluted earnings per share for the three months ending December
31, 2008 were $0.44 per share, versus $0.57 per share for the three months
ending December 31, 2007. For the nine month period ended December 31, 2008, the
earnings for the Company were $612,000 compared to $826,000 for the same period
in the prior year, a decrease of 25.9%.   Positively impacting
earnings for the nine month period ending December 31, 2008 compared to December
31, 2007 were an increase of $132,000, or 4.3%, in net interest income after
provision for loan losses and a $53,000, or 4.5%, increase in non-interest
income, which were more than offset by a $494,000, or 16.4%, increase in
non-interest expense. Basic earnings per share for the December 31, 2008 nine
month period were $1.41 per share versus $1.82 per share for the same period of
2007.  Diluted earnings per share reflect incentive plan shares and
the potential dilutive impact of stock options granted under the stock option
plan.  Diluted earnings per share for the nine months ending December
31, 2008 were $1.36 per share, versus $1.73 per share for the nine months ending
December 31, 2007.





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.


15




FIRST
ROBINSON FINANCIAL CORPORATION
 Management’s
Discussion and Analysis of Financial Condition
 And
Results of Operations


Operations
are significantly affected by prevailing economic conditions, competition and
the monetary, fiscal and regulatory policies of government
agencies.  Lending activities are influenced by the demand for and
supply of housing, competition among lenders, the level of interest rates and
the availability of funds.  Deposit flows and costs of funds are
influenced by prevailing market rates of interest, competing investments,
account maturities and the levels of personal income and savings in the
Company’s market area.





Historically,
the Company’s mission has been to originate loans on a profitable basis to the
communities served.  In seeking to accomplish this mission, the Board
of Directors and management have adopted a business strategy  designed
(i) to maintain the Bank's capital
level in excess of regulatory requirements; (ii) to maintain asset quality,
(iii) to maintain, and if possible, increase earnings; and (iv) to manage
exposure to changes in interest rates.





Business
Strategy and Recent Events





The Bank,
the Company’s operating subsidiary, is a community-oriented, locally owned
financial institution offering community-banking services to residents and
businesses of Crawford County, Illinois, Knox County, Indiana and their
surrounding counties.  We consider this our primary market
area.  On February 29, 2008, the Bank acquired a commercial building
on Kimmel Road near the junction of U.S. Route 41 and Hart Street in Vincennes,
Indiana. We received regulatory approval to establish a branch in May 2008 and
opened our new branch in Vincennes on December 29, 2008. Our branch in Vincennes
goes by the popular name of First Vincennes Savings Bank.  This has
allowed the Bank to move into an area with a population that is nearly double
that of our current market in Crawford County.  We are still committed
to growing our institution in Crawford County and gaining a larger share of the
market; however, this new location will provide additional opportunities that
are still within 40 miles of our home office.





Periodically,
the Board of Directors and management meet to strategically plan for the
future.  We review and discuss both current and new products and
services to determine their effect on our profitability and customer service.
The Board of Directors approved the submission of an application to the OCC for
fiduciary powers and, on July 1, 2008, approval of fudiciary powers was
received.  A trust officer began employment with the Bank in July 2008
and we began offering trust services shortly thereafter. We also monitor any and
all current events and economic trends in our local area that could materially
impact the Bank’s earnings.  At the present time, the employment
market has remained stable in Crawford County and economic trends in the area
also appear stable, although such trends are inherently difficult to
predict.





Our
strategic plan identifies the most critical issue to our success as consistent
earnings.  Net earnings have remained relatively consistent. A
positive factor in maintaining consistent earnings is the Bank’s overall asset
quality, which is strong.  The Bank continues to offer fixed rate
residential real estate mortgages through programs with the Federal Home Loan
Bank of Chicago (“FHLB”) and USDA Rural Development.  However, the
FHLB originally stated, per its Exhibit 99.1 on Form 8-K as furnished with the
Securities and Exchange Commission on April 28, 2008, that as of July 31, 2008,
it would no longer be purchasing residential real estate mortgages as it was
discontinuing the fixed rate program.  On June 10, 2008, the FHLB
furnished to the Securities and Exchange Commission a report on Form 8-K
indicating it was extending the purchasing of residential real estate loans
until October 31, 2008.  In September 2008, the FHLB announced a new
fixed rate program in which we began participating during October
2008.  The new program is similar to the current program but FHLB will
sell a participant’s loans to Fannie Mae instead of being the investor
itself.  See Note 3 of Notes to Consolidated Financial
Statements.





Our
Internet banking service, “Netteller” remains very popular and the number of
customers actively using the service is increasing.  It has allowed us
to offer bill paying, cash management and also direct deposit and payroll
services to our business customers. In January 2007, we began offering “Reward
Checking”.  The deposit product has been very successful, growing to
over 1,400 accounts with a total balance of approximately $17.2 million. The
product offers higher-than-market interest rates, which can be earned by
customers if they meet specific transaction-based criteria.  Our
criteria promote the use of our internet-based services and
technology.    We realize the risks involved with promoting
internet-based transactions; however, the Company has installed firewalls and
incorporated additional security features to mitigate the possibility of
security data breaches.  We cannot be certain all of the Company’s
systems are entirely free from vulnerability to attack, despite safeguards we
have installed.  Additionally, we rely on and do business with a variety of
third-party service providers, agents and vendors with respect to the Company’s
business, data security and communications needs.  If information security
is breached, or one of our agents or vendors breaches compliance procedures,
information could be lost or misappropriated, resulting in financial loss or
costs to us or damages to others.  These costs or losses could materially
exceed the Company’s amount of insurance coverage which would adversely affect
the Company’s business.


16




FIRST
ROBINSON FINANCIAL CORPORATION
 Management’s
Discussion and Analysis of Financial Condition
 And
Results of Operations


Another
factor in maintaining consistent earnings is the continued growth in our
investment brokerage service provided to our customers through PrimeVest
Financial Services.  With the investment brokerage products offered by
PrimeVest and the investment products the Bank offers, we are able to serve the
investment needs of our customers and the community.





With the
squeezing of the net interest margin from 3.74% as of December 31, 2007 to 3.47%
as of December 31, 2008, the addition of staff for the Vincennes, Indiana branch
and the Trust department, and the increase in Crawford County’s jobless rate
from 6.3% at December 2007 up to 7.8% at December 2008, the Company needs to
diligently monitor its interest rate risk, its credit risk, and all factors
relating to non-interest income and expense in order to maintain earnings at an
acceptable level.





Recently,
the Department of the Treasury announced its Capital Purchase Program, whereby
public bank holding companies such as the Company may, with approval, sell
preferred stock and warrants in exchange for a capital infusion that would count
as Tier 1 equity.  The Company did not participate in this program, as
it believed its capital level was adequate for all forseeable
needs.





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.





Recent
Legislation and Government Recovery Programs




In
response to the current national and international economic recession, 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
apply or have already applied to receive funds.  The CPP is intended
to shore up bank capital and to stimulate lending.





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 program,
which is intended to become operational in February, 2009, is intended to
increase credit availability and support economic activity by facilitating
renewed issuance of consumer and small business asset-backed securities
(“ABS”).  Under TALF, the Federal Reserve Bank of New York will
finance the purchase of eligible ABS by investors that own eligible collateral
so long as such investor maintains an account relationship with a primary
dealer.  The terms of participation in TALF are currently under
review.





Finally,
the Federal Deposit Insurance Corporation 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 June 30, 2009, and an account
transaction 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
Company has determined that it will not participate in the Capital Purchase
Program but is participating in the transaction account guarantee program of the
temporary liquidity guarantee program.  The FDIC is charging an annual
fee of 10 basis points per dollar amount deposited in non-interest bearing
transaction accounts that exceed the existing deposit insurance limit of
$250,000.  The assessment will be collected on a quarterly basis in
addition to the risk-based assessment currently being charged.





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.


17


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Proposed Increase in FDIC Insurance
Premiums.  In connection with a determination that the Deposit
Insurance Fund’s reserve ratio must be restored to 1.15%, the FDIC’s board of
directors raised deposit insurance premiums by seven basis points across the
board for the first quarter of 2009.  In addition, the board has
proposed a series of risk-based adjustments to take affect in the second quarter
of 2009.  Pursuant to this component of the proposal, assessment rates
could be lowered for smaller institutions with Tier 1 capital ratios greater
than 10 percent by up to two basis points.  The proposal also calls
for reduced premiums for smaller banks with high amounts of long-term unsecured
debt.   As of the date of this filing, the FDIC has not finalized
its risk-based adjustments proposal.





The
increase in deposit insurance premiums is not expected to have a material effect
on the Bank.  If the risk-based adjustments are adopted in their
proposed form, the effect on the Bank is not expected to be
material.





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 December 31, 2008.




Loans Delinquent For:30-89 Days(1)
                
                
                90 Days and Over(1)
                
                
                Nonaccrual
                
                
                Total Delinquent LoansNumber
                
                
                Amount
                
                
                Percent
                    of Loan
                    Category
                
                
                Number
                
                
                Amount
                
                
                Percent
                    of Loan
                    Category
                
                
                Number
                
                
                Amount
                
                
                Percent
                    of Loan
                    Category
                
                
                Number
                
                
                Amount
                
                
                Percent of
                    Loan
                    Category(Dollars in thousands)Real
      Estate:One-
      tofour-family
                
                
                7
                
                
                $
                247
                
                
                
                0.59
                %
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                3
                
                
                $
                92
                
                
                
                0.22
                %
                
                
                10
                
                
                $
                339
                
                
                
                0.81
                %Construction
      or development
                
                
                1
                
                
                
                30
                
                
                
                0.96
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                1
                
                
                
                30
                
                
                
                0.96
                %Commercial
      andagriculturalreal
      estate
                
                
                1
                
                
                
                52
                
                
                
                0.34
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                1
                
                
                
                52
                
                
                
                0.34
                %Consumer
      and other loans
                
                
                7
                
                
                
                26
                
                
                
                0.41
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                7
                
                
                
                26
                
                
                
                0.41
                %Commercialbusiness
      andagriculturalfinance
                
                
                2
                
                
                
                7
                
                
                
                0.04
                
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                1
                
                
                
                20
                
                
                
                0.11
                
                
                
                3
                
                
                
                27
                
                
                
                0.15
                %Total
                
                
                18
                
                
                $
                362
                
                
                
                0.41
                %
                
                
                —
                
                
                
                —
                
                
                
                —
                
                
                
                4
                
                
                $
                112
                
                
                
                0.13
                %
                
                
                22
                
                
                $
                474
                
                
                
                0.54
                %





(1)
            Loans
      are still accruing.




18


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations




Non-Performing
Assets.  The table below sets forth the amounts and categories
of non-performing assets in the Bank’s loan portfolio.  Loans are
placed on non-accrual status when the collection of principal and/or interest
become doubtful.  Foreclosed assets include assets acquired in
settlement of loans.




December 31,
                                  
                                  
                                  March 31,
                                  
                                  
                                  December 31,2008
                                  
                                  
                                  2008
                                  
                                  
                                  2007(In thousands)Non-accruing
      loans:One-
      to four-family
                                  
                                  $
                                  92
                                  
                                  
                                  $
                                  143
                                  
                                  
                                  $
                                  127Commercial
      and agriculture real estate
                                  
                                  
                                  —
                                  
                                  
                                  
                                  126
                                  
                                  
                                  
                                  227Consumer
      and other loans
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  7Commercial
      business and agricultural finance
                                  
                                  
                                  20
                                  
                                  
                                  
                                  23
                                  
                                  
                                  
                                  66Total
                                  
                                  
                                  112
                                  
                                  
                                  
                                  292
                                  
                                  
                                  
                                  427Foreclosed/Repossessed
      assets:One-
      to four-family
                                  
                                  
                                  90
                                  
                                  
                                  
                                  16
                                  
                                  
                                  
                                  —Consumer
      vehicle
                                  
                                  
                                  9
                                  
                                  
                                  
                                  —
                                  
                                  
                                  
                                  —Total
                                  
                                  
                                  99
                                  
                                  
                                  
                                  16
                                  
                                  
                                  
                                  —Total
      non-performing assets
                                  
                                  $
                                  211
                                  
                                  
                                  $
                                  308
                                  
                                  
                                  $
                                  427Total
      as a percentage of total
                                    assets
                                  
                                  
                                  0.14
                                  %
                                  
                                  
                                  0.23
                                  %
                                  
                                  
                                  0.34
                                  %




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 and $13,000 for the nine months ended December 31, 2008 and
$17,000 for the three months and $22,000 for the nine months ended December 31,
2007.





Classified
Assets.  Federal regulations provide for the classification of
loans and other assets, such as debt and equity securities, considered by the
Office of the Comptroller of the Currency (“OCC”) to be of lesser quality, as
“substandard,” “doubtful” or “loss.”  An asset is considered
“substandard” if it is inadequately protected by the current net worth and
paying capacity of the obligor or the collateral pledged, if
any.  “Substandard” assets include those characterized by the
“distinct possibility” that the insured institution will sustain “some loss” if
the deficiencies are not corrected.  Assets classified as “doubtful”
have all of the weaknesses inherent in those classified “substandard” with the
added characteristic that the weaknesses present make “collection or liquidation
in full” on the basis of currently existing facts, conditions and values,
“highly questionable and improbable.”  Assets classified as “loss” are
those considered “uncollectible” and of such little value that their continuance
as assets without the establishment of a specific loss reserve is not
warranted.





When an
insured institution classifies problem assets as either substandard or doubtful,
it  may establish general allowances for losses in an amount deemed
prudent by management.  General allowances represent loss allowances
which have been established to recognize the inherent risk associated with
lending activities, but which, unlike specific allowances, have not been
allocated to particular problem assets.  When an insured institution
classifies problem assets as “loss,” it is required either to establish a
specific allowance for losses equal to 100% of that portion of the asset so
classified or to charge-off such amount.  An institution’s
determination as to the classification of its assets and the amount of its
valuation allowances is subject to review by the regulatory authorities, who may
order the establishment of additional general or specific loss
allowances.





In
connection with the filing of its periodic reports with the OCC and in
accordance with its classification of assets policy, the Bank regularly reviews
loans in its portfolio to determine whether such assets require classification
in accordance with applicable regulations.  On the basis of
management’s review of its assets, at December 31, 2008, the Bank had classified
a total of $860,000 of its assets as substandard and $65,000 as
doubtful.  At December 31, 2008, total classified assets comprised
$925,000, or 7.5% of the Bank’s capital, and 0.6% of the Bank’s total
assets.


19





FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Other Loans of
Concern.  As of December
31, 2008, there were $4.1 million in loans identified, but not classified, by
the Bank with respect to which known information about the possible credit
problems of the borrowers or the cash flows of the business have caused
management to have some doubts as to the ability of the borrowers to comply with
present loan repayment terms and which may result in the future inclusion of
such items in the non-performing asset categories.





Allowance for
Loan Losses.  The allowance
for loan losses is maintained at a level which, in management’s judgment, is
adequate to absorb credit losses inherent in the loan portfolio.  The
amount of the allowance is based on management’s evaluation of the
collectibility of the loan portfolio, including the nature of the portfolio,
credit concentrations, trends in historical loss experience, specific impaired
loans and economic conditions.  Allowances for impaired loans are
generally determined based on collateral values.  The allowance is
increased by a provision for loan losses, which is charged to expense and
reduced by charge-offs, net of recoveries.





Real
estate properties acquired through foreclosure are recorded at the fair market
value minus 20% of the fair market value if the property is appraised at $50,000
or less.  If the property is appraised at greater than $50,000, then
the property is recorded at the fair market value less 10% of the market fair
value.  If fair value at the date of foreclosure is lower than the
balance of the related loan, the difference will be charged-off to the allowance
for loan losses at the time of transfer.  Valuations are periodically
updated by management and if the value declines, a specific provision for losses
on such property is established by a charge to operations.  At
December 31, 2008, the Bank had one real estate property acquired through
foreclosure.  The property is for sale.





Although
management believes that it uses the best information available to determine the
allowance, unforeseen market conditions could result in adjustments and net
earnings could be significantly affected if circumstances differ substantially
from the assumptions used in making the final determination.  Future
additions to the Bank’s allowance for loan losses will be the result of periodic
loan, property and collateral reviews and thus cannot be predicted in
advance.  In addition, federal regulatory agencies, as an integral
part of the examination process, periodically review the Bank’s allowance for
loan losses.  Such agencies may require the Bank to increase the
allowance based upon their judgment of the information available to them at the
time of their examination.  At December 31, 2008, the Bank had a total
allowance for loan losses of $757,000, representing 0.89% of the Bank’s loans,
net.   At March 31, 2008, the Bank’s total allowance for loan
losses to the Bank’s loans, net was at 0.95%.


20


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





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




December 31, 2008
                                    
                                    
                                    March 31, 2008Amount of
                                        Loan Loss
                                        Allowance
                                    
                                    
                                    Loan
                                        Amounts by
                                        Category
                                    
                                    
                                    Percent of
                                        Loans in Each
                                        Category to
                                        Total Loans
                                    
                                    
                                    Amount of
                                        Loan Loss
                                        Allowance
                                    
                                    
                                    Loan
                                        Amounts by
                                        Category
                                    
                                    
                                    Percent of
                                        Loans in
                                        Each
                                        Category to
                                        Total Loans(Dollars
      in thousands)One-
      to four-family loans held for sale
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    376
                                    
                                    
                                    
                                    0.43
                                    %
                                    
                                    $
                                    —
                                    
                                    
                                    $
                                    101
                                    
                                    
                                    
                                    0.13
                                    %One-
      to four-family
                                    
                                    
                                    67
                                    
                                    
                                    
                                    41,686
                                    
                                    
                                    
                                    47.34
                                    
                                    
                                    
                                    62
                                    
                                    
                                    
                                    38,923
                                    
                                    
                                    
                                    50.08Multi-family
                                    
                                    
                                    —
                                    
                                    
                                    
                                    1,251
                                    
                                    
                                    
                                    1.42
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    618
                                    
                                    
                                    
                                    0.80Commercial
      and agricultural real estate
                                    
                                    
                                    453
                                    
                                    
                                    
                                    15,197
                                    
                                    
                                    
                                    17.26
                                    
                                    
                                    
                                    481
                                    
                                    
                                    
                                    14,527
                                    
                                    
                                    
                                    18.69Construction
      or development
                                    
                                    
                                    —
                                    
                                    
                                    
                                    3,119
                                    
                                    
                                    
                                    3.54
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    2,909
                                    
                                    
                                    
                                    3.74Consumer
      and other loans
                                    
                                    
                                    36
                                    
                                    
                                    
                                    6,269
                                    
                                    
                                    
                                    7.12
                                    
                                    
                                    
                                    27
                                    
                                    
                                    
                                    6,221
                                    
                                    
                                    
                                    8.00State
      and Municipal Governments
                                    
                                    
                                    —
                                    
                                    
                                    
                                    2,334
                                    
                                    
                                    
                                    2.65
                                    
                                    
                                    
                                    —
                                    
                                    
                                    
                                    2,720
                                    
                                    
                                    
                                    3.50Commercial
      business and agricultural finance
                                    
                                    
                                    201
                                    
                                    
                                    
                                    17,814
                                    
                                    
                                    
                                    20.24
                                    
                                    
                                    
                                    157
                                    
                                    
                                    
                                    11,710
                                    
                                    
                                    
                                    15.06Gross
      Loans
                                    
                                    
                                    
                                    
                                    
                                    
                                    88,046
                                    
                                    
                                    
                                    100.00
                                    %
                                    
                                    
                                    
                                    
                                    
                                    
                                    77,729
                                    
                                    
                                    
                                    100.00
                                    %Unallocated
                                    
                                    
                                    —
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    —Deferred
      loan fees
                                    
                                    
                                    
                                    
                                    
                                    
                                    (4
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (6
                                    )Undisbursed
      portion of loans
                                    
                                    
                                    
                                    
                                    
                                    
                                    (2,381
                                    )
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    
                                    (750
                                    )Total
                                    
                                    $
                                    757
                                    
                                    
                                    $
                                    85,661
                                    
                                    
                                    
                                    
                                    
                                    
                                    $
                                    727
                                    
                                    
                                    $
                                    76,973




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




Three Months Ended
                        December 31,
                      
                      
                      Nine Months Ended
                        December 31,2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007(Dollars in thousands)Balance
      at beginning of period
                      
                      $
                      752
                      
                      
                      $
                      732
                      
                      
                      $
                      727
                      
                      
                      $
                      729Charge-offs:One-
      to four-family
                      
                      
                      19
                      
                      
                      
                      —
                      
                      
                      
                      19
                      
                      
                      
                      4Commercial
      non-residential real estate
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      123
                      
                      
                      
                      —Consumer
      and other loans
                      
                      
                      10
                      
                      
                      
                      10
                      
                      
                      
                      34
                      
                      
                      
                      22Total
      charge-offs
                      
                      
                      29
                      
                      
                      
                      10
                      
                      
                      
                      176
                      
                      
                      
                      26Recoveries:One-
      to four-family
                      
                      
                      —
                      
                      
                      
                      —
                      
                      
                      
                      1
                      
                      
                      
                      —Consumer
      and other loans
                      
                      
                      4
                      
                      
                      
                      5
                      
                      
                      
                      15
                      
                      
                      
                      13Total
      recoveries
                      
                      
                      4
                      
                      
                      
                      5
                      
                      
                      
                      16
                      
                      
                      
                      13Net
      charge-offs
                      
                      
                      25
                      
                      
                      
                      5
                      
                      
                      
                      160
                      
                      
                      
                      13Additions
      charged to operations
                      
                      
                      30
                      
                      
                      
                      30
                      
                      
                      
                      190
                      
                      
                      
                      60Transfer
      for off-balance sheet credit exposure
                      
                      
                      —
                      
                      
                      
                      3
                      
                      
                      
                      —
                      
                      
                      
                      (16
                      )Balance
      at end of period
                      
                      $
                      757
                      
                      
                      $
                      760
                      
                      
                      $
                      757
                      
                      
                      $
                      760Ratio
      of net charge-offs during the period toaverage
      loans outstanding during the period
                      
                      
                      0.03
                      %
                      
                      
                      0.01
                      %
                      
                      
                      0.20
                      %
                      
                      
                      0.02
                      %Ratio
      of net charge-offs during the period to average non-performing
      assets
                      
                      
                      9.95
                      %
                      
                      
                      1.28
                      %
                      
                      
                      53.59
                      %
                      
                      
                      4.68
                      %


21


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Financial
Condition





Total
assets of the Company increased by $18.7 million, or 14.0%, to $152.5 million at
December 31, 2008 from $133.8 million at March 31, 2008. The increase in assets
was primarily due to an increase of $16.7 million, or 52.9%, in available for
sale securities, an increase of $8.4 million, or 11.0%, loans receivable, net,
an increase of $873,000, or 30.6%, in premises and equipment, and an increase of
$275,000, or 272.3% in loans held for sale, offset, in part, by a $7.7 million,
or 39.6%, decrease in cash and cash equivalents.





The total
decrease in cash and cash equivalents was derived substantially from federal
funds sold decreasing by $15.3 million, or 87.9%, to $2.1 million at December
31, 2008 from $17.4 million at March 31, 2008. The decrease in federal funds
sold was offset, in part, by the increase of $7.5 million in cash and other
interest earning deposit accounts from $2.2 million at March 31, 2008 to $9.7
million at December 31, 2008. The decrease resulted from the funds being used to
purchase additional available-for-sale securities and to fund loan
growth.





Available-for-sale
investment securities increased to $48.2 million at December 31, 2008 compared
to $31.5 million at March 31, 2008, a $16.7 million increase. The increase
resulted from the purchase of $23.5 million in mortgage-backed securities, the
$623,000 increase in the market valuation of the available-for-sale portfolio,
and the amortization of $19,000 of premiums and discounts on investments, offset
by $5.4 million in repayments on mortgage-backed securities, by $1.1 million in
proceeds from the maturity of available for sale securities, and by $953,000 in
proceeds from the sale of available-for-sale securities. The investment
portfolio is managed to limit the Company's exposure to risk by investing
primarily in mortgage-backed securities and
other  securities  which are either  directly or
indirectly backed by the federal government or a local municipal
government.  The Company owns no equity securities in Freddie Mac nor
Fannie Mae.





The
Company's net loan portfolio increased by $8.4 million to $84.5 million at
December 31, 2008 from $76.1 million at March 31, 2008. Loans on one- to
four-family real estate, including one- to four-family loans held for sale,
increased by $3.0 million, or 7.8%; loans on multi-family properties increased
by $633,000, or 102.4%; commercial nonresidential real estate and farmland loans
increased by  $670,000, or 4.6%; construction and development loans
increased by $210,000, or 7.2%; consumer and other loans increased by $48,000,
or 0.8%; and commercial business and agricultural finance loans increased $6.1
million, or 52.1%.  These increases were offset, in part, by the
decrease of $386,000, or 14.2%, in loans to state and municpal
governments.  The total amount of undisbursed closed-ended lines of
credit increased by $1.6 million, or 217.5% from $750,000 at March 31, 2008 to
$2.4 million at December 31, 2008.





At
December 31, 2008, the allowance for loan losses was $757,000, or 0.89%, of the
net loan portfolio, which increased $30,000 from the allowance for loan losses
at March 31, 2008 at $727,000, or 0.95%, of the net loan portfolio. During the
first nine-months of fiscal 2009, the Company charged off $176,000 of loan
losses,  $123,000 in commercial non-residential real estate, $34,000
in consumer and other loans, and $19,000 in one- to four-family residential real
estate loans. The chargeoffs of $176,000 were offset by $15,000 in recoveries in
consumer and other loans and $1,000 in recoveries in loans for one- to four-
family dwellings. Management reviews the adequacy of the allowance for loan
losses quarterly, and believes that its allowance is adequate; however, the
Company cannot assure that future chargeoffs and/or provisions will not be
necessary.  See “Asset Quality” for further information on
delinquencies.





The
Company had one foreclosed real estate property held for sale at December 31,
2008 and March 31, 2008.  Foreclosed assets are carried at fair
value.  The real estate property held March 31, 2008, with a fair
value of $16,000, was sold for $12,000 during the three and nine months ended
December 31, 2008.  Also during the nine months ended December 31,
2008, one loan was transferred to other real estate owned at a fair value of
$90,000.  The property is for sale.   During the
quarter ended December 31, 2008, the Company repossessed a
vehicle.  The fair value of the car was established at
$8,600.  The vehicle was sold in early January 2009 for the fair
value.





Total
deposits increased by $17.6 million, or 17.0%, to $121.5 million at December 31,
2008 from $103.9 million at March 31, 2008. The increase in total deposits was
due to an increase of $7.5 million in certificates of deposit, an increase of
$1.7 million in non-interest bearing demand deposits, and an increase
of  $8.4 million in savings, NOW, and money market
accounts.  The growth in certificates of deposit can be linked to two
new types of certificates being offered, one for 27 months and one for 54
months. The customer has one opportunity to adjust the rate being paid on their
certificate during the term of the certificate to the current rate being
offered.    Part of the increase in demand, savings, NOW and
money markets accounts can be attributed to the popularity of our Reward
account. The product offers higher-than-market interest rates, which can be
earned by customers if they meet specific transaction-based
criteria.  Our criteria promote the use of our internet-based services
and technology.   The remaining growth in deposit accounts can be
attributed to the instability of the stock market and customers looking for
safe, secure, insured investments.


22





FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Other
borrowings, consisting entirely of repurchase agreements, increased $929,000, or
5.7% from $16.3 million at March 31, 2008 to $17.2 million at December 31, 2008.
The obligations are secured by mortgage-backed securities and US Government
agency obligations held in safekeeping at Independent Bankers Bank in
Springfield, Illinois.  At December 31, 2008, the average rate on the
repurchase agreements was 0.37% compared to 1.37% at March 31,
2008.  The rate on approximately $16.2 million of the repurchase
agreements reprice daily.  All agreements mature periodically within
24 months.





Advances
from borrowers for taxes and insurance decreased by $50,000 from $149,000 at
March 31, 2008 to $99,000 at December 31, 2008. Accrued income taxes payable
decreased $23,000. Other liabilities decreased $87,000 from $1.2 million at
March 31, 2008 to $1.1 million at December 31, 2008.  These decreases
were offset by an increase of $198,000 in deferred taxes.





Stockholders'
equity at December 31, 2008 was $12.0 million compared to $11.9 million at March
31, 2008, an increase of $87,000, or 0.7%.  Factors relating to the
increase in stockholders’ equity can be attributed to the addition of $612,000
in net income offset by  $345,000 in dividends declared and paid, the
increase of $389,000 in accumulated other comprehensive income due to the
increase in the fair value of securities available for sale, and the increase in
additional paid-in-capital of $168,000 relating to the options exercised during
the period and the increase of $125,000 in additional paid-in-capital due to the
expiration of the Recognition and Retention Plan (“RRP”) on July 29, 2008 offset
by the purchase of $12,000 in incentive plan shares related to the Directors
Retirment Plan. These increases are partially offset by the repurchase of
$889,000 in treasury shares and the receipt of the $125,000 in RRP shares offset
by the issuance of $164,000 in shares of First Robinson Financial stock relating
to the exercise of stock options.





Results
of Operations





Net
Income





The
Company earned $194,000 for the three month period ending December 31, 2008,
versus $261,000 in the same period of 2007, a decrease of 25.7%. Earnings for
the three months ended December 31, 2008 were positively impacted by a $107,000,
or 10.6%, increase in net interest income after provision for loan losses which
was more than offset by an increase of $208,000, or 20.7%, in non-interest
expense and a decrease of $10,000, or 2.5% in non-interest income when compared
to the prior year. For the nine month period ended December 31, 2008, the
earnings for the Company were $612,000 compared to $826,000 for the same period
in the prior year, a decrease of 25.9%.  Positively impacting earnings
for the nine month period ending December 31, 2008 compared to December 31, 2007
were an increase of $132,000, or 4.3%, in net interest income after provision
for loan losses and a $53,000, or 4.5%, increase in non-interest income, which
were more than offset by a $494,000, or 16.4%, increase in non-interest
expense.  The decrease in income in both the three-month and
nine-month periods can be attributed to increases in the provision for loan
losses and non-interest expense, as described below.





Net
Interest Income





For the
three-month period ended December 31, 2008, net interest income totaled
$1,144,000, an increase of 10.3%, or $107,000, compared to the same period of
2007. Net interest income increased in the three-month period ended December 31,
2008 versus the comparable period of 2007 due to an increase of $67,000, or
3.6%, in total interest income and the decrease of $40,000, or 4.8%, in total
interest expense. The increase in total interest income was primarily due to an
increase of $213,000, or 67.8%, in interest income from taxable securities, the
increase of $4,000, or 17.4%, in tax-exempt securities interest income, and the
increase of $1,000, or 50.0%, in dividends from Federal Reserve Bank (“FRB”)
stock, offset, in part, by the decrease of $84,000, or 5.8%, in interest income
from loans, and the decrease of $67,000, or 89.3%, in other interest
income.  The decrease in total interest expense is due to the decrease
of  $114,000, or 83.2% to $23,000 in interest expense on other
borrowings, offset by interest expense on deposits increasing $74,000, or 10.8%,
for the three months ended December 31, 2008 to $762,000 from $688,000 for the
three months ended December 31, 2007.





For the
nine-month period ended December 31, 2008, net interest income totaled
$3,385,000, an increase of $262,000, or 8.4%, over the same period in the prior
year.  Contributing to the increase was the increase of $181,000, or
3.3%, in total interest income and the decrease of $81,000, or 3.4% in total
interest expense.  The increase in total interest income can be
attributed to a $478,000, or 48.9%, increase interest income from taxable
securities offset, in part, by the decrease of $220,000, or 5.2%, in interest
income from loans, the decrease of $8,000, or 50.0%, in dividends from FHLB and
FRB stocks, the decrease of $3,000, or 4.2%, in tax-exempt securities interest
income, and the decrease of $66,000, or 36.1% in other interest
income.  The decrease in total interest expense is due to interest
expense on other borrowings decreasing by $281,000, or 68.5% to $129,000 for the
nine months ended December 31, 2008 from $410,000 for the same comparible period
in 2007.  While interest expense on deposits increased $200,000, or
10.2%, for the nine months ended December 31, 2008 to $2,156,000 from $1,956,000
for the nine months ended December 31, 2007.


23


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





For the
three-months ended December 31, 2008 total average interest earning assets
increased by $20.0 million, or 17.7%, to $133.5 million as of December 31, 2008
from $113.5 million as of December 31, 2007.  However, the yield on
the earning assets decreased by 78 basis points when comparing the three months
ended December 31, 2008 to the same period in 2007.  Total average
interest bearing liabilities for the three months ended December 31, 2008 were
$118.2 million compared to $98.0 million as of December 31, 2007, an increase of
$20.2 million, or 20.6%.   As was the case with the yield on
assets, the cost on the average interest bearing liabilities decreased by 71
basis points.  For the three-month period ended December 31, 2008, the
net interest spread decreased 7 basis points to 3.12% versus 3.19% in the
comparable period of 2007.    The nine-month period ending
December 31, 2008 is identical to the three-months ended December 31, 2008, as
far as the increase in both interest-earning assets and interest-bearing
liabilities, the decrease in the yield earned and paid, and the decrease in the
net interest rate spread. 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.





The
average daily loan balances for the quarter ended December 31, 2008 increased
$3.4 million, or 4.4%, to $81.2 million, versus $77.8 million for the same
period of 2007.  During the same period, the yield on loans decreased
73 basis points to 6.72% from 7.45% for the December 31, 2008 quarter compared
to the December 31, 2007 quarter.  The average daily loan balances for
the nine-month period ending December 31, 2008 increased 3.8% to $78.2 million,
versus the average daily loan balances of $75.3 million for the same period of
2007.  The yield on loans, for the nine-months ended December 31,
2008, declined by 65 basis points to 6.86% from 7.51% in the same nine-month
period of 2007.





The
average daily securities balances, the Company’s interest-earning demand
deposits and the federal funds sold balances for the third quarter of fiscal
year 2009 increased $16.6 million, or 47.6%, to $51.5 million, versus $34.9
million for the same period of fiscal year 2008. During the same period, income
from these sources increased by $150,000, or 36.4%, to $562,000 versus $412,000
during the third quarter of fiscal year 2008.  The average daily
balances of securities, interest-earning demand deposits and federal funds sold
for the first nine months of fiscal 2009 increased $15.9 million, or 45.3%, to
$51.0 million,  versus $35.1 million for the same  period of
fiscal year 2008.  During the same periods, income from securities,
interest-earning demand deposits and federal funds sold increased by $409,000,
or 33.2%, to $1,642,000  versus  $1,233,000 during the nine
months of  fiscal 2008. The increase in investment interest income was
primarily the result of the $15.9 million, or 45.3%, increase in average daily
balance of investments outstanding when comparing the nine-months ended December
2008 to the nine-months ended December 2007.





Dividends
received from FHLB and FRB stocks decreased $8,000, or 50.0%, for the
nine-months ended December 2008 from the nine-months ended December
2007.   The rate of return on the FRB stock was steady at 6.0%
for the December 2008 quarter, the December 2007 quarter, and the nine-months
ended December 2008 and 2007.  The FHLB Chicago paid no dividends
during the quarter ended nor the nine-months ended December 31,
2008.  On September 26, 2007, the Company received a letter from the
FHLB of Chicago regarding a Consent Cease and Desist Order it was issued from
its regulator, the Federal Housing Finance Board, now the Federal Housing
Finance Agency.  The Order prohibits the FHLB of Chicago from
repurchasing or redeeming any of its capital stock without prior approval from
its regulator.  The Order also proposes that the declaration of a
dividend by the FHLB of Chicago on its capital stock be subject to prior written
approval.  The Company can make no prediction as  to if or
when the FHLB will resume dividend payments.  Management performed an
analysis and deemed the Company’s investment in FHLB stock was not
impaired.





Total
interest expense decreased $40,000, or 4.8%, to $785,000 for the three-month
period ended December 31, 2008, from $825,000 for the comparable period in
2007.  Contributing to the decrease was a 71 basis point decrease in
the Company's daily cost of funds to 2.66%, versus 3.37% for the same period of
2007, partially offset by, the increase of $20.2 million in the average balance
of interest bearing liabilities from $98.0 million at December 31, 2007 to
$118.2 million at December 31, 2008. Total interest expense decreased $81,000,
or 3.4%, to $2,285,000 for the nine-month period ended December 31, 2008, from
$2,366,000 for the comparable period in 2007. The decrease was primarily the
result of a 68 basis point decrease in the daily cost of funds to 2.68%, versus
3.36% for the same period of 2007, offset in part, by the increase of $19.9
million in the average balance of interest-bearing liabilities to $113.7 million
at December 31, 2008 from $93.8 million as of December 31,
2007.


24


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





On an
average daily basis, total interest-bearing deposits increased $19.2 million, or
23.3%, to $101.6 million for the three-month period ended December 31, 2008,
versus $82.4 million in the same period in 2007. The average cost of funds
decreased by 34 basis points to 3.00% for the December 2008 quarter versus the
December 2007 quarter at 3.34%.  The average daily balance of
interest-bearing deposits for the nine-month period ended December 2008 also
increased by $17.4 million, or 21.9%, to $96.8 million from $79.4
million.  When comparing the average cost of funds on deposits for the
December 2008 nine-month period to the same period ending December 31, 2007
there was a decrease of 31 basis points from 3.28% to 2.97%.





For the
three-months ended December 31, 2008 versus the same period of 2007, the average
daily balance of short-term borrowings and federal funds purchased increased
$623,000, or 4.0%, from $15.6 million to $16.3 million.  The average
cost of funds decreased for the December 2008 quarter by 301 basis points from
3.50% to 0.49%. The average daily balance of short-term borrowings for the
nine-months ended December 31, 2008 increased by $2.5 million, or 17.2%, to
$16.9 million from $14.4 million for the nine-month period ending December 31,
2007 while the average cost of funds decreased by 280 basis points to 1.00% from
3.80% when comparing the nine-months of fiscal year 2009 to fiscal year
2008.





Provision
for Loan Losses





The
provision for loan losses for the quarter ended December 31, 2008 was $30,000
with no change from the quarter ended December 31, 2007.  The loan
loss provision for the nine-month period ending December 31, 2008 was $190,000,
an increase of $130,000, or 216.7%, over the nine-months ended December 31,
2007.  The provision for both periods reflects management's analysis
of the Company's loan portfolio based on the information which was available to
the Company. Management meets on a quarterly basis to review the adequacy of the
allowance for loan losses based on Company guidelines. Classified loans are
reviewed by the loan officers to arrive at specific reserve levels for those
loans. Once the specific reserve for each loan is calculated, management
calculates general reserves for each loan category based on a combination of
loss history adjusted for current national and local economic conditions, trends
in delinquencies and charge-offs, trends in volume and term of loans, changes in
underwriting standards, and industry conditions. While the Company cannot assure
that future chargeoffs and/or provisions will not be necessary, the Company's
management believes that, as of December 31, 2008, its allowance for loan losses
was adequate.


25





FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Non-Interest
Income


Non-interest
income categories for the three and nine-month periods ended December 31, 2008
and 2007 are shown in the following table:





Three
      Months EndedDecember 31,Non-interest
      income:
                                
                                2008
                                
                                
                                2007
                                
                                
                                %Change(In
      thousands)Charges
      and fees on deposit accounts
                                
                                $
                                223
                                
                                
                                $
                                226
                                
                                
                                
                                (1.3
                                )%Charges
      and other fees on loans
                                
                                
                                26
                                
                                
                                
                                34
                                
                                
                                
                                (23.5
                                )Net
      gain on sale of loans
                                
                                
                                27
                                
                                
                                
                                37
                                
                                
                                
                                (27.0
                                )Other
                                
                                
                                108
                                
                                
                                
                                97
                                
                                
                                
                                11.3Total
      Non-Interest Income
                                
                                $
                                384
                                
                                
                                $
                                394
                                
                                
                                
                                (2.5
                                )%Nine
      Months EndedDecember 31,Non-interest
      income:
                                
                                2008
                                
                                
                                2007
                                
                                
                                %Change(In
      thousands)Charges
      and fees on deposit accounts
                                
                                $
                                671
                                
                                
                                $
                                688
                                
                                
                                
                                (2.5
                                )%Charges
      and other fees on loans
                                
                                
                                111
                                
                                
                                
                                91
                                
                                
                                
                                22.0Net
      gain on sale of loans
                                
                                
                                99
                                
                                
                                
                                92
                                
                                
                                
                                7.6Net
      gain on sale of foreclosed property
                                
                                
                                —
                                
                                
                                
                                3
                                
                                
                                
                                (100.0
                                )Net
      realized gain on sale of available for sale securities
                                
                                
                                2
                                
                                
                                
                                —
                                
                                
                                
                                —Other
                                
                                
                                342
                                
                                
                                
                                298
                                
                                
                                
                                14.8Total
      Non-Interest Income
                                
                                $
                                1,225
                                
                                
                                $
                                1,172
                                
                                
                                
                                4.5
                                %




Charges
and fees on deposit accounts decreased $3,000 for the three-month and $17,000
for the nine-month periods ended December 31, 2008 versus the same periods in
2007.  This decrease is primarily from a drop in overdraft and
insufficient funds fees.  Charges and other fees on loans decreased in
the three-month period by $8,000 and increased during the nine-month period
ending December 31, 2008, by $20,000, respectivley, when compared to the same
periods in 2007.





The
decrease of $10,000 in gains on the sale of loans for the quarter ended December
31, 2008 when compared to the quarter ended December 31, 2007 is a result of a
decrease in the dollar amount of loans sold when comparing the two
quarters.  However, for the nine-month period ended December 31, 2008
the gains on the sale of loans increased $7,000 over the same period in
2007.  For the three-months ended December 31, 2008, the Company sold
$1.6 million in mortgage loans versus $2.3 million in the comparable period of
2007.   The Company sold $6.3 million in loans for the nine-month
period ending December 31, 2008 compared to $5.9 million during the same period
in 2007.





Other
income consists of normal recurring fee income such as commissions from
PrimeVest Investment Services, our investment brokerage service, the cash value
of life insurance, ATM/Debit card interchange income and fees, and safe deposit
box rent, as well as other income that management classifies as
non-recurring.  Other income increased  $11,000 and
$44,000,  respectively,  in
the  three  and  nine-month  periods  ended
December 31, 2008 versus the same period of 2007. The primary driver behind the
increases in the three and nine-month periods can be attributed to the increase
in commission received from the sale of annuities and other investments by our
PrimeVest bokerage service and the increase in ATM/debit card interchange income
resulting from the promotion of the use of debit cards in relation to “Reward
Checking”.


26


FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Non-Interest
Expense





Non-interest
expense categories for the three and nine-month periods ended December 31, 2008,
and 2007 are shown in the following table:




Three
      Months EndedDecember
      31,2008
                                        
                                        
                                        2007
                                        
                                        
                                        %Change(In
      thousands)Non-interest
      expense:Compensation
      and employee benefits
                                        
                                        $
                                        644
                                        
                                        
                                        $
                                        537
                                        
                                        
                                        
                                        19.9
                                        %Occupancy
      and equipment
                                        
                                        
                                        132
                                        
                                        
                                        
                                        157
                                        
                                        
                                        
                                        (15.9
                                        )Foreclosed
      property expense
                                        
                                        
                                        3
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —Data
      processing
                                        
                                        
                                        79
                                        
                                        
                                        
                                        59
                                        
                                        
                                        
                                        33.9Audit,
      legal and other professional
                                        
                                        
                                        49
                                        
                                        
                                        
                                        51
                                        
                                        
                                        
                                        (3.9
                                        )Advertising
                                        
                                        
                                        59
                                        
                                        
                                        
                                        26
                                        
                                        
                                        
                                        126.9Telephone
      and postage
                                        
                                        
                                        48
                                        
                                        
                                        
                                        24
                                        
                                        
                                        
                                        100.0Other
                                        
                                        
                                        201
                                        
                                        
                                        
                                        153
                                        
                                        
                                        
                                        31.4Total
      Non-Interest Expense
                                        
                                        $
                                        1,215
                                        
                                        
                                        $
                                        1,007
                                        
                                        
                                        
                                        20.7
                                        %Nine
      Months EndedDecember
      31,2008
                                        
                                        
                                        2007
                                        
                                        
                                        %Change(In
      thousands)Non-interest
      expense:Compensation
      and employee benefits
                                        
                                        $
                                        1,945
                                        
                                        
                                        $
                                        1,637
                                        
                                        
                                        
                                        18.8
                                        %Occupancy
      and equipment
                                        
                                        
                                        465
                                        
                                        
                                        
                                        461
                                        
                                        
                                        
                                        0.9Foreclosed
      property expense
                                        
                                        
                                        10
                                        
                                        
                                        
                                        2
                                        
                                        
                                        
                                        400.0Data
      processing
                                        
                                        
                                        198
                                        
                                        
                                        
                                        161
                                        
                                        
                                        
                                        23.0Audit,
      legal and other professional
                                        
                                        
                                        148
                                        
                                        
                                        
                                        141
                                        
                                        
                                        
                                        5.0Advertising
                                        
                                        
                                        156
                                        
                                        
                                        
                                        89
                                        
                                        
                                        
                                        75.3Telephone
      and postage
                                        
                                        
                                        107
                                        
                                        
                                        
                                        71
                                        
                                        
                                        
                                        50.7Net
      loss on sale of foreclosed property
                                        
                                        
                                        4
                                        
                                        
                                        
                                        —
                                        
                                        
                                        
                                        —Net
      loss on disposal of fixed assets
                                        
                                        
                                        —
                                        
                                        
                                        
                                        4
                                        
                                        
                                        
                                        (100.0
                                        )Other
                                        
                                        
                                        477
                                        
                                        
                                        
                                        450
                                        
                                        
                                        
                                        6.0Total
      Non-Interest Expense
                                        
                                        $
                                        3,510
                                        
                                        
                                        $
                                        3,016
                                        
                                        
                                        
                                        16.4
                                        %





Compensation
and employee benefits increased by $107,000 when comparing the December 2008 and
2007 quarters primarily due to a $126,000 increase in salaries,
a  $17,000 increase in costs associated with insurance benefits paid
by the Company for employees, a $9,000 increase in unemployment, medicare and
social security taxes, and a $3,000 increase in contributions to the 401(k) plan
offset by a $29,000 decrease in market value of the shares held in the Directors
Retirement Plan, a $16,000 decrease in expenses accosicated with the exercise of
options, and a decrease of $3,000 in fees paid to Directors.  When
comparing the nine months ended December 31, 2008 to the same period in 2007,
there was a $308,000 increase in compensation and employee
benefits.  The largest contributing factors were a $200,000, or 17.2%,
increase in salaries, an $82,000 increase in expense related to options
exercised, a $36,000 increase in costs associated with insurance benefits paid
by the Company for employees, a $12,000 increase in contributions to the 401(k)
plan and a $6,000 increase in unemployment, medicare and social security
taxes.  These increases are offset, in part, by a $16,000 decrease in
the market value of the shares held in the Directors Retirement Plan, by a
$10,000 decrease in fees paid to the Directors and by a decrease of $2,000 in
retirement plan administration expenses.  Fees paid to the Directors
decreased due to there being six Directors now as opposed to seven in the
previous year.  The increase in salaries can be attributed to the
hiring of a trust officer in July 2008 and the hiring, during the second quarter
of fiscal 2009, the full-time employees for the branch in Vincennes, Indiana.
Salary and employee benefits may increase in the near future when the complete
Vincennes staff is hired.  However, as all options have now been
exercised and the options expired on July 29th of this year, there should be no
future expenses associated with options.


27




FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





Occupancy
and equipment expense decreased by $25,000 for the three-month period ending
December 31, 2008 compared to December 31, 2007 and increased by $4,000 when
comparing the nine-month periods ending December 31, 2008 to December 31, 2007.





Data
processing expenses increased $20,000 for the three-months and $37,000 for the
nine-months ended December 31, 2008 compared to the same periods in the prior
year due to the cost of keeping up with advances in technology.





Advertising
expense increased $33,000 for the three months ended December 31, 2008 and
$67,000 for the nine months ended December 31, 2008 when compared to the same
periods of the prior year due to increased advertising in a new market area,
Vincennes, Indiana.





Telephone
and postage expense increased by $24,000 and $36,000 for the three-months and
nine months ended December 31, 2008 when compared to the same periods in
2007.  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.  Prior to August 2008,
connectivity with branches was often interrupted and their computers would go
down.  Since signing with the company, the connectivity issues have
been resolved.  The addition of phones and lines at the new branch in
Vincennes also contributed to the increases.





Other
expense includes miscellaneous operating expenses such as office supplies,
stationary and printing, ATM/Debit card interchange fees, check processing fees,
loan expenses, federal deposit insurance premiums and assessments by the bank
regulators among others. When comparing the three-month and nine-month periods
ended December 31, 2008 to the same periods in 2007, there was an increase of
$48,000 and $27,000, respectively,  in other expenses which can be
attributed, in part, to increases in expenses related to federal deposit
insurance and expenses associated with office supplies, stationary and printing
costs.  The $25.5 million increase in deposits, from December 2007 to
December 2008, and the expiration of the FDIC insurance credit led to the
increase in federal deposit insurance premiums.  Supplying the new
branch in Vincennes attributed to the increase in stationary and printing costs.
To help offset non-interest costs, during the three months ended December 31,
2008, the Company elected to increase their compensating balance maintained at
their correspondent bank to $3.0 million from $100,000.  The dramatic
decrease in rates being earned for federal funds sold, 0.27% at December 31,
2008,  and the receipt of a  1.01% earnings credit to be
used in offsetting the processing costs of the account were the factors that led
to this decision.  The compensating balance can be adjusted at any
time.  The rate being received on federal funds sold and the earnings
credit will be monitored monthly.





Income
Tax Expense





Income
tax expense decreased $44,000, or 33.1%, for the three-months ending December
31, 2008, compared to the same period in 2007. Income tax expense for the
nine-moth period decreased $95,000, or 24.2%, compared to the same period of
2007.  Both decreases were attributed in part to decreased
profitability and the receivable of a $26,000 refund on state income taxes for
fiscal years ended 2006 and 2007. The combined state and federal income tax
expense as a percentage of income before income tax expense decreased to 31.5%
during the three-month period of 2008 compared to 33.8% during the same period
in 2007. The combined state and federal income tax expense as a percentage of
income before income tax expense increased to 32.8% for the nine-months ended
December  31, 2008 compared to 32.2% for the nine-month period ending
December 31, 2007.





Off-Balance
Sheet Arrangements





The
Company has entered into performance standby and financial standby letters of
credit with various local commercial businesses in the aggregate amount of
$383,000. 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.


28





FIRST
ROBINSON FINANCIAL CORPORATION


Management’s
Discussion and Analysis of Financial Condition


And
Results of Operations





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 December 31,
2008, outstanding commitments to extend credit amounted to $19.6 million
(including $12.5 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 $26.0 million line of credit with the FHLB, which can be
accessed immediately. The Company regularly uses FHLB Letters of Credit as
security for public unit deposits. The available line of credit with the FHLB is
reduced by the amount of these letters of credit. However, as of December, there
were no FHLB letters of credit pledged.  The available line of credit
with the FHLB is also reduced by $1.6 million for the credit enhancement reserve
established as a result of the participation in the FHLB Mortgage Partnership
Finance (“MPF”) program.  The Company also maintains a $5.0 million
revolving line of credit and a $600,000 revolving line of credit with
Independent Banker’s Bank located in Springfield, Illinois. On November 7, 2008,
the Company borrowed $558,000 on this line of credit which was paid off December
23, 2008.  The Company has also established borrowing capabilities at
the discount window with the Federal Reserve Bank of St. Louis.





Liquidity
management is both a daily and long-term responsibility of
management.  We adjust our investments in liquid assets based upon
management's assessment of (i) expected loan demand, (ii) expected deposit
flows, (iii) yields available on interest-bearing investments, and (iv) the
objectives of its asset/liability management program.  Excess
liquidity generally is invested in interest-earning overnight deposits and other
short-term government and agency obligations.





The
Company and the Bank are subject to capital requirements of the federal bank
regulatory agencies which require the Bank to maintain minimum ratios of Tier I
capital to total 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.





At
December 31, 2008, the Bank’s compliance with all of the aforementioned capital
requirements is summarized below:




To
      be Well CapitalizedUnder
      the PromptFor
      Capital
                          
                          
                          Corrective
      ActionActual
                          
                          
                          Adequacy Purposes
                          
                          
                          ProvisionsAmount
                          
                          
                          Ratio
                          
                          
                          Amount
                          
                          
                          Ratio
                          
                          
                          Amount
                          
                          
                          RatioTotal
      Risk-Based Capital(to
      Risk-Weighted Assets)
                          
                          $
                          12,448
                          
                          
                          
                          14.46
                          %
                          
                          $
                          6,887
                          
                          
                          
                          8.00
                          %
                          
                          $
                          8,609
                          
                          
                          
                          10.00
                          %Tier
      I Capital(to
      Risk-Weighted Assets)
                          
                          
                          11,669
                          
                          
                          
                          13.55
                          
                          
                          
                          3,444
                          
                          
                          
                          4.00
                          
                          
                          
                          5,166
                          
                          
                          
                          6.00Tier
      I Capital(to
      Average Assets)
                          
                          
                          11,669
                          
                          
                          
                          8.08
                          
                          
                          
                          5,776
                          
                          
                          
                          4.00
                          
                          
                          
                          7,220
                          
                          
                          
                          5.00





At the
time of the conversion of the Bank to a stock organization, a special
liquidation account was established for the benefit of eligible account holders
and the supplemental account holders in an amount equal to the net worth of the
Bank.  This special liquidation account will be maintained for the
benefit of eligible account holders and the supplemental account holders who
continue to maintain their accounts in the Bank after June 27, 1997. In the
unlikely event of a complete liquidation, each eligible and the supplemental
eligible account holders will be entitled to receive a liquidation distribution
from the liquidation account in an amount proportionate to the current adjusted
qualifying balances for accounts then held. The Bank may not declare or pay cash
dividends on or repurchase any of its common stock if stockholders’ equity would
be reduced below applicable regulatory capital requirements or below the special
liquidation account.


29





FIRST
ROBINSON FINANCIAL CORPORATION




Item:  3    Quantitative and Qualitative
Disclosures about Market Risk





Not
applicable.





Item:  4    Controls and
Procedures





Any
control system, no matter how well designed and operated, can provide only
reasonable (not absolute) assurance that its objectives will be
met.  Furthermore, no evaluation of controls can provide absolute
assurance that all control issues and instances of fraud, if any, have been
detected.




Disclosure Controls and
Procedures





The
Company’s management, with the participation of the Company’s Chief Executive
Officer and Chief Financial Officer, has evaluated the effectiveness of the
Company’s disclosure controls and procedures (as such term is defined in Rules
13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period
covered by this report. Based upon that evaluation, the Company’s Chief
Executive Officer and Chief Financial Officer have concluded that, as of
December 31, 2008, the Company’s disclosure controls and procedures were
effective to provide reasonable assurance that (i) the information required to
be disclosed in this Report was  recorded, processed, summarized and
reported within the time periods specified in the SEC’s rules and forms, and
(ii) information required to be disclosed by the Company in the reports that it
files or submits under the Exchange Act is accumulated and communicated to
Company’s management, including its principal executive and principal financial
officers, or persons performing similar functions, as appropriate to allow
timely decisions regarding disclosure.





Internal Control Over
Financial Reporting





There
have been no changes in the Company’s internal control over financial reporting
(as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange
Act) during the fiscal quarter to which this report relates that have materially
affected, or are reasonably likely to materially affect, the Company’s internal
control over financial reporting.


30





PART II
OTHER INFORMATION




Item
      1.
                    Legal ProceedingsNoneItem  1.A.
                    Risk FactorsIn
      addition to the risk factors described in the Company’s annual report on
      Form 10-KSB for the year ended March 31, 2008 under Item 1, the Company
      adds the following:Recessionary
      environment may adversely affect the Company’s earnings and new government
      initiatives may not prove effective.The
      national and global economic downturn has recently resulted in extreme
      levels of market volatility locally, nationally and
      internationally.  This downturn has depressed the overall market
      value of financial institutions, including the Company, and may limit or
      impede industry access to capital, or  have a material adverse
      effect on the financial condition or results of operations of banking
      companies in general, including the Company, with respect to, for example,
      the establishment of reserves should conditions deteriorate
      further.In
      this respect, the duration and severity of the adverse economic cycle is
      unknown, and although the U.S. Department of the Treasury and the Federal
      Deposit Insurance Corporation, among others, have implemented programs in
      an effort to stabilize the national economy, the effectiveness of these
      programs is uncertain at this time.Item
      2.
                    Unregistered Sales of Equity Securities and Use of
      ProceedsThe
      following table provides information about purchases by the Company for
      the quarter endedDecember
      31, 2008 regarding the Company’s common
stock.





PURCHASES
OF EQUITY SECURITIES BY COMPANY (1)


Period
                        
                        Total Number of
                          Shares Purchased
                        
                        
                        Average Price Paid
                          per Share
                        
                        
                        Total Number of
                          Shares Purchased as
                          Part of Publicly
                          Announced Plans or
                          Programs
                        
                        
                        Maximum Number of
                          Shares that May Yet
                          Be Purchased Under
                          the Plans or Programs10/1/2008
      – 10/31/2008
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        —
                        
                        
                        
                        21,94211/1/2008
      – 11/30/2008
                        
                        
                        16,852
                        
                        
                        
                        34.24
                        
                        
                        
                        16,852
                        
                        
                        
                        5,09012/1/2008–
      12/31/2008
                        
                        
                        896
                        
                        
                        
                        33.75
                        
                        
                        
                        896
                        
                        
                        
                        4,194Total
                        
                        
                        17,748
                        
                        
                        $
                        34.22
                        
                        
                        
                        17,748
                        
                        
                        
                        4,194


(1)  On
July 24, 2008, the Board of Directors of First Robinson Financial Corporation
voted to approve the extension and expansion of the repurchase program of its
equity stock approved on September 18, 2007.  The Company may
repurchase up to 22,000 additional shares of the Company’s outstanding common
stock in the open market or in negotiated private transactions from time to time
when deemed appropriate by management. The increase represents approximately 5%
of the Company’s issued and outstanding shares.  As of July 24, 2008,
the Company had repurchased 20,108 shares of its common stock out of the 25,000
shares that had been previously authorized for repurchase.  As a
result of these actions, the Company is currently authorized to repurchase
26,892 shares of common stock.  The Program, with an original
expiration date of September 17, 2008, has been extended to August 1, 2009 or
the completion of the repurchase of the 26,892 shares.  As of December
31, 2008, 22,698 shares of the 26,892 have been purchased in the new program
leaving 4,194 remaining to be purchased.





Item
      3.
                Defaults Upon Senior
    ExecutivesNone




31


PART II
OTHER INFORMATION





Item
      4.
                    Submission of Matters to a Vote of Security
      HoldersNoneItem
      5.
                    Other InformationNoneItem
      6.
                    Exhibits1.Exhibit
      31: Section 302 Certifications2.Exhibit
      32: Section 906
Certifications


32





SIGNATURES





Pursuant
to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.





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


33





EXHIBIT
INDEX





Exhibit No.31.1
              Certification
      by the CEO pursuant to Section 302 of the Sarbanes-Oxley Act of
      200231.2
              Certification
      by the CFO pursuant to Section 302 of the Sarbanes-Oxley Act of
      200232
              Certifications
      of the CEO and CFO pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002




34