| MAINE                                                          | 01-0404322                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| MAIN STREET, DAMARISCOTTA,   MAINE | 04543            |
|---------------------------------------------------|------------------|
| (Address of principal executive offices)          |  (Zip code) |

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| Part I. Financial Information                                                                              | 1  |
|------------------------------------------------------------------------------------------------------------|----|
| Selected Financial Data (Unaudited)                                                                        | 1  |
| Item 1 – Financial Statements                                                                        | 2  |
| Report of Independent Registered Public Accounting Firm                                                    | 2  |
| Consolidated Balance Sheets (Unaudited)                                                                    | 3  |
| Consolidated Statements of Income (Unaudited)                                                              | 4  |
| Consolidated Statements of Changes in Shareholders’ Equity (Unaudited)                               | 5  |
| Consolidated Statements of Cash Flows (Unaudited)                                                          | 6  |
| Notes to Consolidated Financial Statements                                                                 | 7  |
| Note 1 – Basis of Presentation                                                                       | 7  |
| Note 2 –Investment Securities                                                                        | 7  |
| Note 3 – Loans                                                                                       | 10 |
| Note 4 – Allowance for Loan Losses                                                                   | 15 |
| Note 5 – Stock Options and Stock and Stock Based Compensation                                        | 20 |
| Note 6 – Preferred and Common Stock                                                                  | 21 |
| Note 7 – Earnings Per Share                                                                          | 22 |
| Note 8 – Employee Benefit Plans                                                                      | 22 |
| Note 9 – Goodwill and Other Intangible Assets                                                        | 24 |
| Note 10 – Mortgage Servicing Rights                                                                  | 24 |
| Note 11 – Income Taxes                                                                               | 25 |
| Note 12 - Certificates of Deposit                                                                          | 25 |
| Note 13 – Reclassifications                                                                          | 25 |
| Note 14 – Fair Value Disclosures                                                                     | 25 |
| Note 15 – Impact of Recently Issued Accounting Standards                                             | 29 |
| Item 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations | 30 |
| Forward-Looking Statements                                                                                 | 30 |
| Critical Accounting Policies                                                                               | 30 |
| Use of Non-GAAP Financial Measures                                                                         | 31 |
| Executive Summary                                                                                          | 33 |
| Net Interest Income                                                                                        | 34 |
| Average Daily Balance Sheets                                                                               | 35 |
| Non-Interest Income                                                                                        | 36 |
| Non-Interest Expense                                                                                       | 36 |
| Income Taxes                                                                                               | 36 |
| Investments                                                                                                | 36 |
| Impaired Securities                                                                                        | 38 |
| Federal Home Loan Bank Stock                                                                               | 40 |
| Loans and Loans Held for Sale                                                                              | 40 |
| Credit Risk Management and Allowance for Loan Losses                                                       | 42 |
| Non-Performing Loans and Troubled Debt Restructured                                                        | 46 |
| Impaired Loans                                                                                             | 48 |
| Past Due Loans                                                                                             | 48 |
| Potential Problem Loans and Loans in Process of Foreclosure                                                | 49 |
| Other Real Estate Owned                                                                                    | 50 |
| Goodwill                                                                                                   | 51 |
| Liquidity Management                                                                                       | 51 |
| Deposits                                                                                                   | 51 |
| Borrowed Funds                                                                                             | 51 |
| Shareholders’ Equity                                                                                 | 52 |
| Off-Balance-Sheet Financial Instruments and Contractual Obligations                                        | 52 |
| Item 3 – Quantitative and Qualitative Disclosures About Market Risk                                  | 53 |
| Market-Risk Management                                                                                     | 53 |
| Asset/Liability Management                                                                                 | 53 |
| Interest Rate Risk Management                                                                              | 54 |
| Item 4: Controls and Procedures                                                                            | 55 |
| Part II – Other Information                                                                          | 56 |
| Item 1 – Legal Proceedings                                                                           | 56 |
| Item 1a – Risk Factors                                                                               | 56 |
| Item 2 – Unregistered Sales of Equity Securities and Use of Proceeds                                 | 56 |
| Item 3 – Default Upon Senior Securities                                                              | 56 |
| Item 4 – Other Information                                                                           | 56 |
| Item 5 – Exhibits                                                                                    | 57 |
| Signatures                                                                                                 | 58 |

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| Dollars in thousands,                      |   | For the three months ended March 31, |      |
|--------------------------------------------|--------|--------------------------------------|-----------|
| except for per share amounts               |   | 2011                                 |      |   | 2010 |   |
|                                       |   |                                 |      |   |   |   |
| Summary of Operations                      |   |                                 |      |   |   |   |
| Interest Income                            |   | $                                    | 14,254    |   |   | $ | 14,133 |   |
| Interest Expense                           |   |                                 | 3,749     |   |   |   | 4,112 |   |
| Net Interest Income                        |   |                                 | 10,505    |   |   |   | 10,021 |   |
| Provision for Loan Losses                  |   |                                 | 2,100     |   |   |   | 2,400 |   |
| Non-Interest Income                        |   |                                 | 2,277     |   |   |   | 2,175 |   |
| Non-Interest Expense                       |   |                                 | 6,488     |   |   |   | 6,282 |   |
| Net Income                                 |   |                                 | 3,143     |   |   |   | 2,684 |   |
| Per Common Share Data                      |   |                                 |      |   |   |   |   |   |
| Basic Earnings per Share                   |   | $                                    | 0.29      |   |   | $ | 0.24 |   |
| Diluted Earnings per Share                 |   |                                 | 0.29      |   |   |   | 0.24 |   |
| Cash Dividends Declared                    |   |                                 | 0.195     |   |   |   | 0.195 |   |
| Book Value                                 |   |                                 | 12.96     |   |   |   | 12.71 |   |
| Tangible Book Value2                       |   |                                 | 10.13     |   |   |   | 9.87 |   |
| Market Value                               |   |                                 | 15.25     |   |   |   | 15.94 |   |
| Financial Ratios                           |   |                                 |      |   |   |   |   |   |
| Return on Average Equity1                  |   |                                 | 10.02     | % |   |   | 8.69 | % |
| Return on Average Tangible Equity1,2       |   |                                 | 11.43     | % |   |   | 11.15 | % |
| Return on Average Assets1                  |   |                                 | 0.90      | % |   |   | 0.82 | % |
| Average Equity to Average Assets           |   |                                 | 10.76     | % |   |   | 11.30 | % |
| Average Tangible Equity to Average Assets2 |   |                                 | 8.80      | % |   |   | 9.22 | % |
| Net Interest Margin Tax-Equivalent1,2      |   |                                 | 3.40      | % |   |   | 3.51 | % |
| Dividend Payout Ratio                      |   |                                 | 67.24     | % |   |   | 81.25 | % |
| Allowance for Loan Losses/Total Loans      |   |                                 | 1.56      | % |   |   | 1.53 | % |
| Non-Performing Loans to Total Loans        |   |                                 | 2.51      | % |   |   | 2.46 | % |
| Non-Performing Assets to Total Assets      |   |                                 | 1.89      | % |   |   | 2.20 | % |
| Efficiency Ratio2                          |   |                                 | 48.28     | % |   |   | 49.06 | % |
| At Period End                              |   |                                 |      |   |   |   |   |   |
| Total Assets                               |   | $                                    | 1,431,038 |   |   | $ | 1,336,544 |   |
| Total Loans                                |   |                                 | 894,684   |   |   |   | 935,008 |   |
| Total Investment Securities                |   |                                 | 450,830   |   |   |   | 311,908 |   |
| Total Deposits                             |   |                                 | 1,050,257 |   |   |   | 939,180 |   |
| Total Shareholders’ Equity           |   |                                 | 151,544   |   |   |   | 148,542 |   |

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|                                                                                                                                                   |   | March 31,2011 |          |   | December 31,2010 |   |          | March 31, 2010 |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------------|--------|------------------|--------|---------------|---------------------|--------|
| Assets                                                                                                                                                 |   |          |          |   |             |   |          |                |   |
| Cash and cash equivalents                                                                                                                              |   | $             | 13,700,000    |   |             | $      | 13,838,000    |                |   | $ | 11,731,000 |   |
| Time deposits in other banks                                                                                                                           |   |          | 100,000       |   |             |   | 100,000       |                |   |   | - |   |
| Securities available for sale                                                                                                                          |   |          | 325,451,000   |   |             |   | 293,229,000   |                |   |   | 131,441,000 |   |
| Securities to be held to maturity (fair value of $114,051,000 at March 31, 2011, $110,366,000 at December 31, 2010 and $166,964,000 at March 31, 2010) |   |          | 109,936,000   |   |             |   | 107,380,000   |                |   |   | 165,024,000 |   |
| Federal Reserve Bank stock, at cost                                                                                                                    |   |          | 1,412,000     |   |             |   | 1,412,000     |                |   |   | 1,412,000 |   |
| Federal Home Loan Bank stock, at cost                                                                                                                  |   |          | 14,031,000    |   |             |   | 14,031,000    |                |   |   | 14,031,000 |   |
| Loans held for sale                                                                                                                                    |   |          | 450,000       |   |             |   | 2,806,000     |                |   |   | 4,152,000 |   |
| Loans                                                                                                                                                  |   |          | 894,684,000   |   |             |   | 887,596,000   |                |   |   | 935,008,000 |   |
| Less allowance for loan losses                                                                                                                         |   |          | 14,000,000    |   |             |   | 13,316,000    |                |   |   | 14,283,000 |   |
| Net loans                                                                                                                                              |   |          | 880,684,000   |   |             |   | 874,280,000   |                |   |   | 920,725,000 |   |
| Accrued interest receivable                                                                                                                            |   |          | 6,236,000     |   |             |   | 5,263,000     |                |   |   | 6,110,000 |   |
| Premises and equipment                                                                                                                                 |   |          | 18,685,000    |   |             |   | 18,980,000    |                |   |   | 18,069,000 |   |
| Other real estate owned                                                                                                                                |   |          | 4,575,000     |   |             |   | 4,929,000     |                |   |   | 6,351,000 |   |
| Goodwill                                                                                                                                               |   |          | 27,684,000    |   |             |   | 27,684,000    |                |   |   | 27,684,000 |   |
| Other assets                                                                                                                                           |   |          | 28,094,000    |   |             |   | 29,870,000    |                |   |   | 29,814,000 |   |
| Total assets                                                                                                                                           |   | $             | 1,431,038,000 |   |             | $      | 1,393,802,000 |                |   | $ | 1,336,544,000 |   |
| Liabilities                                                                                                                                            |   |          |          |   |             |   |          |                |   |   |   |   |
| Demand deposits                                                                                                                                        |   | $             | 67,502,000    |   |             | $      | 74,032,000    |                |   | $ | 61,371,000 |   |
| NOW deposits                                                                                                                                           |   |          | 120,045,000   |   |             |   | 119,823,000   |                |   |   | 111,965,000 |   |
| Money market deposits                                                                                                                                  |   |          | 73,766,000    |   |             |   | 71,604,000    |                |   |   | 84,694,000 |   |
| Savings deposits                                                                                                                                       |   |          | 108,359,000   |   |             |   | 100,870,000   |                |   |   | 94,833,000 |   |
| Certificates of deposit                                                                                                                                |   |          | 680,585,000   |   |             |   | 608,189,000   |                |   |   | 586,317,000 |   |
| Total deposits                                                                                                                                         |   |          | 1,050,257,000 |   |             |   | 974,518,000   |                |   |   | 939,180,000 |   |
| Borrowed funds – short term                                                                                                                      |   |          | 87,366,000    |   |             |   | 127,160,000   |                |   |   | 136,738,000 |   |
| Borrowed funds – long term                                                                                                                       |   |          | 130,168,000   |   |             |   | 130,170,000   |                |   |   | 100,175,000 |   |
| Other liabilities                                                                                                                                      |   |          | 11,703,000    |   |             |   | 12,106,000    |                |   |   | 11,909,000 |   |
| Total Liabilities                                                                                                                                      |   |          | 1,279,494,000 |   |             |   | 1,243,954,000 |                |   |   | 1,188,002,000 |   |
| Shareholders' equity                                                                                                                                   |   |          |          |   |             |   |          |                |   |   |   |   |
| Preferred stock, $1,000 preference value per share                                                                                                     |   |          | 24,729,000    |   |             |   | 24,705,000    |                |   |   | 24,631,000 |   |
| Common stock, one cent par value per share                                                                                                             |   |          | 98,000        |   |             |   | 98,000        |                |   |   | 98,000 |   |
| Additional paid-in capital                                                                                                                             |   |          | 45,551,000    |   |             |   | 45,474,000    |                |   |   | 45,209,000 |   |
| Retained earnings                                                                                                                                      |   |          | 82,623,000    |   |             |   | 81,701,000    |                |   |   | 78,919,000 |   |
| Accumulated other comprehensive loss                                                                                                                   |   |          |          |   |             |   |          |                |   |   |   |   |
|   Net unrealized loss on securities available-for- sale                                                                                      |   |          | (1,389,000    | )      |             |   | (2,057,000    | )                   |   |   | (108,000 | ) |
|   Net unrealized loss on postretirement benefit costs                                                                                        |   |          | (68,000       | )      |             |   | (73,000       | )                   |   |   | (207,000 | ) |
| Total shareholders' equity                                                                                                                             |   |          | 151,544,000   |   |             |   | 149,848,000   |                |   |   | 148,542,000 |   |
| Total liabilities & shareholders' equity                                                                                                           |   | $             | 1,431,038,000 |   |             | $      | 1,393,802,000 |                |   | $ | 1,336,544,000 |   |
| Common Stock                                                                                                                                           |   |          |          |   |             |   |          |                |   |   |   |   |
| Number of shares authorized                                                                                                                            |   |          | 18,000,000    |   |             |   | 18,000,000    |                |   |   | 18,000,000 |   |
| Number of shares issued and outstanding                                                                                                                |   |          | 9,786,964     |   |             |   | 9,773,025     |                |   |   | 9,751,474 |   |
| Book value per common share                                                                                                                            |   | $             | 12.96         |   |             | $      | 12.80         |                |   | $ | 12.71 |   |
| Tangible book value per common share                                                                                                                   |   | $             | 10.13         |   |             | $      | 9.97          |                |   | $ | 9.87 |   |

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|                                                             |   | For the three months ended March 31, |       |
|------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                             |   | 2011                                 |       |   | 2010 |   |
| Interest and dividend income                                     |   |                                 |       |   |   |   |
| Interest and fees on loans                                       |   | $                                    | 10,173,000 |   |   | $ | 11,150,000 |   |
| Interest on deposits with other banks                            |   |                                 | 2,000      |   |   |   | 2,000 |   |
| Interest and dividends on investments                            |   |                                 | 4,079,000  |   |   |   | 2,981,000 |   |
|      Total interest and dividend income |   |                                 | 14,254,000 |   |   |   | 14,133,000 |   |
| Interest expense                                                 |   |                                 |       |   |   |   |   |   |
| Interest on deposits                                             |   |                                 | 2,563,000  |   |   |   | 2,480,000 |   |
| Interest on borrowed funds                                       |   |                                 | 1,186,000  |   |   |   | 1,632,000 |   |
|      Total interest expense             |   |                                 | 3,749,000  |   |   |   | 4,112,000 |   |
| Net interest income                                              |   |                                 | 10,505,000 |   |   |   | 10,021,000 |   |
| Provision for loan losses                                        |   |                                 | 2,100,000  |   |   |   | 2,400,000 |   |
| Net interest income after provision for loan losses              |   |                                 | 8,405,000  |   |   |   | 7,621,000 |   |
| Non-interest income                                              |   |                                 |       |   |   |   |   |   |
| Investment management and fiduciary income                       |   |                                 | 424,000    |   |   |   | 411,000 |   |
| Service charges on deposit accounts                              |   |                                 | 640,000    |   |   |   | 709,000 |   |
| Net securities gains                                             |   |                                 | -          |   |   |   | 2,000 |   |
| Mortgage origination and servicing income                        |   |                                 | 459,000    |   |   |   | 278,000 |   |
| Other operating income                                           |   |                                 | 754,000    |   |   |   | 775,000 |   |
|      Total non-interest income          |   |                                 | 2,277,000  |   |   |   | 2,175,000 |   |
| Non-interest expense                                             |   |                                 |       |   |   |   |   |   |
| Salaries and employee benefits                                   |   |                                 | 3,077,000  |   |   |   | 2,745,000 |   |
| Occupancy expense                                                |   |                                 | 449,000    |   |   |   | 394,000 |   |
| Furniture and equipment expense                                  |   |                                 | 550,000    |   |   |   | 581,000 |   |
| FDIC insurance premiums                                          |   |                                 | 401,000    |   |   |   | 475,000 |   |
| Amortization of identified intangibles                           |   |                                 | 71,000     |   |   |   | 71,000 |   |
| Other operating expense                                          |   |                                 | 1,940,000  |   |   |   | 2,016,000 |   |
|      Total non-interest expense         |   |                                 | 6,488,000  |   |   |   | 6,282,000 |   |
| Income before income taxes                                       |   |                                 | 4,194,000  |   |   |   | 3,514,000 |   |
| Applicable income taxes                                          |   |                                 | 1,051,000  |   |   |   | 830,000 |   |
| NET INCOME                                                       |   | $                                    | 3,143,000  |   |   | $ | 2,684,000 |   |
| Less dividends and amortization of premium on preferred stock    |   |                                 | 337,000    |   |   |   | 337,000 |   |
| Net income available to common shareholders                      |   | $                                    | 2,806,000  |   |   | $ | 2,347,000 |   |
| Basic earnings per common share                                  |   | $                                    | 0.29       |   |   | $ | 0.24 |   |
| Diluted earnings per common share                                |   | $                                    | 0.29       |   |   | $ | 0.24 |   |
| Weighted average number of shares outstanding                    |   |                                 | 9,778,756  |   |   |   | 9,750,056 |   |
| Incremental shares                                               |   |                                 | 8,527      |   |   |   | 4,888 |   |
| Cash dividends declared per share                                |   | $                                    | 0.195      |   |   | $ | 0.195 |   |

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|                                                                                   |   |      |       |   |                       |   |      |     |   |   |          |   |   | Accumulated   |       |   |   |   |
|----------------------------------------------------------------------------------------|--------|-----------|------------|--------|----------------------------|--------|-----------|----------|--------|--------|---------------|--------|--------|---------------|------------|--------|--------|--------|
|                                                                                   |   |      |       |   | Common stock and           |   |      |     |   |   | other         |   |   | Total         |       |
|                                                                                   |   | Preferred |       |   | additional paid-in capital |   |      | Retained |   |   | comprehensive |   |   | shareholders' |       |
|                                                                                   |   | stock     |       |   | Shares                     |   |      | Amount   |   |   | earnings      |   |   | Income (loss) |       |   | equity |   |
| Balance at December 31, 2009                                                           |   | $         | 24,606,000 |   |                       |   | 9,744,170 |     |   | $      | 45,218,000    |   |   | $             | 78,450,000 |   |   | $      | (336,000 | ) |   | $ | 147,938,000 |   |
| Net income                                                                             |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 2,684,000  |   |   |   | - |   |   |   | 2,684,000 |   |
| Net unrealized gain on securities available for sale, net of taxes of $8,000           |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 17,000 |   |   |   | 17,000 |   |
| Unrecognized transition obligation for postretirement benefits, net of taxes of $2,000 |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 4,000 |   |   |   | 4,000 |   |
| Comprehensive income                                                                   |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 2,684,000  |   |   |   | 21,000 |   |   |   | 2,705,000 |   |
| Cash dividends declared                                                                |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | (2,215,000 | )      |   |   | - |   |   |   | (2,215,000 | ) |
| Equity compensation expense                                                            |   |      | -          |   |                       |   | -         |     |   |   | 9,000         |   |   |          | -          |   |   |   | - |   |   |   | 9,000 |   |
| Amortization of premium for preferred stock issuance                                   |   |      | 25,000     |   |                       |   | -         |     |   |   | (25,000       | )      |   |          | -          |   |   |   | - |   |   |   | - |   |
| Proceeds from sale of common stock                                                     |   |      | -          |   |                       |   | 7,304     |     |   |   | 105,000       |   |   |          | -          |   |   |   | - |   |   |   | 105,000 |   |
| Balance at March 31, 2010                                                              |   | $         | 24,631,000 |   |                       |   | 9,751,474 |     |   | $      | 45,307,000    |   |   | $             | 78,919,000 |   |   | $      | (315,000 | ) |   | $ | 148,542,000 |   |
| Balance at December 31, 2010                                                           |   | $         | 24,705,000 |   |                       |   | 9,773,025 |     |   | $      | 45,572,000    |   |   | $             | 81,701,000 |   |   | $      | (2,130,000 | ) |   | $ | 149,848,000 |   |
| Net income                                                                             |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 3,143,000  |   |   |   | - |   |   |   | 3,143,000 |   |
| Net unrealized gain on securities available for sale, net of taxes of $363,000         |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 668,000 |   |   |   | 668,000 |   |
| Unrecognized transition obligation for postretirement benefits, net of taxes of $2,000 |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 5,000 |   |   |   | 5,000 |   |
| Comprehensive income                                                                   |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 3,143,000  |   |   |   | 673,000 |   |   |   | 3,816,000 |   |
| Cash dividends declared                                                                |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | (2,221,000 | )      |   |   | - |   |   |   | (2,221,000 | ) |
| Equity compensation expense                                                            |   |      | -          |   |                       |   | -         |     |   |   | 6,000         |   |   |          | -          |   |   |   | - |   |   |   | 6,000 |   |
| Amortization of premium for preferred stock issuance                                   |   |      | 24,000     |   |                       |   | -         |     |   |   | (24,000       | )      |   |          | -          |   |   |   | - |   |   |   | - |   |
| Proceeds from sale of common stock                                                     |   |      | -          |   |                       |   | 13,939    |     |   |   | 95,000        |   |   |          | -          |   |   |   | - |   |   |   | 95,000 |   |
| Balance at March 31, 2011                                                              |   | $         | 24,729,000 |   |                       |   | 9,786,964 |     |   | $      | 45,649,000    |   |   | $             | 82,623,000 |   |   | $      | (1,457,000 | ) |   | $ | 151,544,000 |   |

----

|                                                                              |   | For the three months ended March 31, |        |
|-----------------------------------------------------------------------------------|--------|--------------------------------------|-------------|
|                                                                              |   | 2011                                 |        |   | 2010 |   |
| Cash flows from operating activities                                              |   |                                 |        |   |   |   |
|      Net income                                          |   | $                                    | 3,143,000   |   |   | $ | 2,684,000 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                                 |        |   |   |
| Depreciation                                                                      |   |                                 | 341,000     |   |   |   | 369,000 |   |
| Change in deferred taxes                                                          |   |                                 | (238,000    | ) |   |   | 192,000 |   |
| Provision for loan losses                                                         |   |                                 | 2,100,000   |   |   |   | 2,400,000 |   |
| Loans originated for resale                                                       |   |                                 | (15,794,000 | ) |   |   | (10,122,000 | ) |
| Proceeds from sales and transfers of loans                                        |   |                                 | 18,150,000  |   |   |   | 8,846,000 |   |
| Net gain on sale or call of securities held-to-maturity                           |   |                                 | -           |   |   |   | (2,000 | ) |
| Net loss on sale of other real estate owned                                       |   |                                 | 46,000      |   |   |   | - |   |
| Provision for losses on other real estate owned                                   |   |                                 | 68,000      |   |   |   | 156,000 |   |
| Equity compensation expense                                                       |   |                                 | 6,000       |   |   |   | 9,000 |   |
| Net increase in other assets and accrued interest                                 |   |                                 | (147,000    | ) |   |   | (1,082,000 | ) |
| Net increase in other liabilities                                                 |   |                                 | 262,000     |   |   |   | 867,000 |   |
| Net loss on disposal of premises and equipment                                    |   |                                 | 5,000       |   |   |   | - |   |
| Net amortization (accretion) of premiums on investments                           |   |                                 | 914,000     |   |   |   | (100,000 | ) |
| Amortization of investment in limited partnership                                 |   |                                 | 97,000      |   |   |   | 75,000 |   |
| Net acquisition amortization                                                      |   |                                 | 32,000      |   |   |   | 70,000 |   |
|      Net cash provided by operating activities           |   |                                 | 8,985,000   |   |   |   | 4,362,000 |   |
| Cash flows from investing activities                                              |   |                                 |        |   |   |   |   |   |
| Proceeds from maturities, payments and calls of securities available for sale     |   |                                 | 17,365,000  |   |   |   | 3,715,000 |   |
| Proceeds from sales of securities available for sale                              |   |                                 | -           |   |   |   | 202,000 |   |
| Proceeds from maturities, payments and calls of securities to be held to maturity |   |                                 | 6,074,000   |   |   |   | 25,597,000 |   |
| Proceeds from sales of other real estate owned                                    |   |                                 | 779,000     |   |   |   | 202,000 |   |
| Purchases of securities available for sale                                        |   |                                 | (49,309,000 | ) |   |   | (53,477,000 | ) |
| Purchases of securities to be held to maturity                                    |   |                                 | (8,794,000  | ) |   |   | - |   |
| Net (increase) / decrease in loans                                                |   |                                 | (9,043,000  | ) |   |   | 14,366,000 |   |
| Capital expenditures                                                              |   |                                 | (51,000     | ) |   |   | (107,000 | ) |
|      Net cash used in investing activities               |   |                                 | (42,979,000 | ) |   |   | (9,502,000 | ) |
| Cash flows from financing activities                                              |   |                                 |        |   |   |   |   |   |
| Net increase (decrease) in demand, savings, and money market accounts             |   |                                 | 3,343,000   |   |   |   | (13,707,000 | ) |
| Net increase in certificates of deposit                                           |   |                                 | 72,428,000  |   |   |   | 30,221,000 |   |
| Net decrease in short-term borrowings                                             |   |                                 | (39,789,000 | ) |   |   | (12,865,000 | ) |
| Proceeds from sale of common stock                                                |   |                                 | 95,000      |   |   |   | 105,000 |   |
| Dividends paid                                                                    |   |                                 | (2,221,000  | ) |   |   | (2,215,000 | ) |
|      Net cash provided by financing activities           |   |                                 | 33,856,000  |   |   |   | 1,539,000 |   |
| Net decrease in cash and cash equivalents                                         |   |                                 | (138,000    | ) |   |   | (3,601,000 | ) |
| Cash and cash equivalents at beginning of year                                    |   |                                 | 13,838,000  |   |   |   | 15,332,000 |   |
|      Cash and cash equivalents at end of period          |   | $                                    | 13,700,000  |   |   | $ | 11,731,000 |   |
| Interest paid                                                                     |   | $                                    | 3,861,000   |   |   | $ | 4,170,000 |   |
| Income taxes paid                                                                 |   |                                 | -           |   |   |   | - |   |
| Non-cash transactions                                                             |   |                                 |        |   |   |   |   |   |
|    Transfer from loans to other real estate owned                  |   |                                 | 539,000     |   |   |   | 1,364,000 |   |

----

|                              |   | Amortized |        |   | Unrealized |   |      | Unrealized |   |   | Fair Value  |   |
|-----------------------------------|--------|-----------|-------------|--------|------------|--------|-----------|------------|--------|--------|-------------|--------|
|                              |   | Cost      |        |   | Gains      |   |      | Losses     |   |   | (Estimated) |   |
| Securities available for sale     |   |      |        |   |       |   |      |       |   |   |        |   |
| U.S. Treasury and agency          |   | $         | 15,352,000  |   |       | $      | 591,000   |       |   | $      | -           |   |   | $ | 15,943,000 |   |
| Mortgage-backed securities        |   |      | 255,703,000 |   |       |   | 1,138,000 |       |   |   | (3,731,000  | )      |   |   | 253,110,000 |   |
| State and political subdivisions  |   |      | 55,040,000  |   |       |   | 577,000   |       |   |   | (536,000    | )      |   |   | 55,081,000 |   |
| Corporate securities              |   |      | 1,108,000   |   |       |   | -         |       |   |   | (185,000    | )      |   |   | 923,000 |   |
| Other equity securities           |   |      | 385,000     |   |       |   | 18,000    |       |   |   | (9,000      | )      |   |   | 394,000 |   |
|                              |   | $         | 327,588,000 |   |       | $      | 2,324,000 |       |   | $      | (4,461,000  | )      |   | $ | 325,451,000 |   |
| Securities to be held to maturity |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| U.S. Treasury and agency          |   | $         | 2,936,000   |   |       | $      | -         |       |   | $      | (292,000    | )      |   | $ | 2,644,000 |   |
| Mortgage-backed securities        |   |      | 59,063,000  |   |       |   | 3,348,000 |       |   |   | (76,000     | )      |   |   | 62,335,000 |   |
| State and political subdivisions  |   |      | 47,787,000  |   |       |   | 1,641,000 |       |   |   | (506,000    | )      |   |   | 48,922,000 |   |
| Corporate securities              |   |      | 150,000     |   |       |   | -         |       |   |   | -           |   |   |   | 150,000 |   |
|                              |   | $         | 109,936,000 |   |       | $      | 4,989,000 |       |   | $      | (874,000    | )      |   | $ | 114,051,000 |   |
| Non-marketable securities         |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Federal Home Loan Bank Stock      |   | $         | 14,031,000  |   |       | $      | -         |       |   | $      | -           |   |   | $ | 14,031,000 |   |
| Federal Reserve Bank Stock        |   |      | 1,412,000   |   |       |   | -         |       |   |   | -           |   |   |   | 1,412,000 |   |
|                              |   | $         | 15,443,000  |   |       | $      | -         |       |   | $      | -           |   |   | $ | 15,443,000 |   |

----

|                              |   | Amortized |        |   | Unrealized |   |      | Unrealized |   |   | Fair Value  |   |
|-----------------------------------|--------|-----------|-------------|--------|------------|--------|-----------|------------|--------|--------|-------------|--------|
|                              |   | Cost      |        |   | Gains      |   |      | Losses     |   |   | (Estimated) |   |
| Securities available for sale     |   |      |        |   |       |   |      |       |   |   |        |   |
| U.S. Treasury and agency          |   | $         | 15,380,000  |   |       | $      | 665,000   |       |   | $      | -           |   |   | $ | 16,045,000 |   |
| Mortgage-backed securities        |   |      | 236,126,000 |   |       |   | 1,024,000 |       |   |   | (2,736,000  | )      |   |   | 234,414,000 |   |
| State and political subdivisions  |   |      | 43,404,000  |   |       |   | 171,000   |       |   |   | (2,051,000  | )      |   |   | 41,524,000 |   |
| Corporate securities              |   |      | 1,113,000   |   |       |   | -         |       |   |   | (247,000    | )      |   |   | 866,000 |   |
| Other equity securities           |   |      | 371,000     |   |       |   | 19,000    |       |   |   | (10,000     | )      |   |   | 380,000 |   |
|                              |   | $         | 296,394,000 |   |       | $      | 1,879,000 |       |   | $      | (5,044,000  | )      |   | $ | 293,229,000 |   |
| Securities to be held to maturity |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| U.S. Treasury and agency          |   | $         | 2,190,000   |   |       | $      | 35,000    |       |   | $      | -           |   |   | $ | 2,225,000 |   |
| Mortgage-backed securities        |   |      | 55,710,000  |   |       |   | 2,656,000 |       |   |   | (144,000    | )      |   |   | 58,222,000 |   |
| State and political subdivisions  |   |      | 49,330,000  |   |       |   | 1,102,000 |       |   |   | (663,000    | )      |   |   | 49,769,000 |   |
| Corporate securities              |   |      | 150,000     |   |       |   | -         |       |   |   | -           |   |   |   | 150,000 |   |
|                              |   | $         | 107,380,000 |   |       | $      | 3,793,000 |       |   | $      | (807,000    | )      |   | $ | 110,366,000 |   |
| Non-marketable securities         |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| Federal Home Loan Bank Stock      |   | $         | 14,031,000  |   |       | $      | -         |       |   | $      | -           |   |   | $ | 14,031,000 |   |
| Federal Reserve Bank Stock        |   |      | 1,412,000   |   |       |   | -         |       |   |   | -           |   |   |   | 1,412,000 |   |
|                              |   | $         | 15,443,000  |   |       | $      | -         |       |   | $      | -           |   |   | $ | 15,443,000 |   |

|                  |   | Securities available for sale |        |   | Securities to be held to maturity |   |
|-----------------------|--------|-------------------------------|-------------|--------|-----------------------------------|--------|
|                  |   | AmortizedCost                 |        |   | Fair Value (Estimated)            |   |   | AmortizedCost |   |   | Fair Value (Estimated) |   |
| Due in 1 year or less |   | $                             | 212,000     |   |                              | $      | 218,000 |   |   | $ | 1,072,000 |   |   | $ | 1,084,000 |   |
| Due in 1 to 5 years   |   |                          | 2,818,000   |   |                              |   | 2,964,000 |   |   |   | 5,629,000 |   |   |   | 5,948,000 |   |
| Due in 5 to 10 years  |   |                          | 4,774,000   |   |                              |   | 4,916,000 |   |   |   | 16,974,000 |   |   |   | 17,737,000 |   |
| Due after 10 years    |   |                          | 319,399,000 |   |                              |   | 316,959,000 |   |   |   | 86,261,000 |   |   |   | 89,282,000 |   |
| Equity securities     |   |                          | 385,000     |   |                              |   | 394,000 |   |   |   | - |   |   |   | - |   |
|                  |   | $                             | 327,588,000 |   |                              | $      | 325,451,000 |   |   | $ | 109,936,000 |   |   | $ | 114,051,000 |   |

|                  |   | Securities available for sale |        |   | Securities to be held to maturity |   |
|-----------------------|--------|-------------------------------|-------------|--------|-----------------------------------|--------|
|                  |   | AmortizedCost                 |        |   | Fair Value (Estimated)            |   |   | AmortizedCost |   |   | Fair Value (Estimated) |   |
| Due in 1 year or less |   | $                             | -           |   |                              | $      | - |   |   | $ | 1,195,000 |   |   | $ | 1,203,000 |   |
| Due in 1 to 5 years   |   |                          | 2,950,000   |   |                              |   | 3,099,000 |   |   |   | 5,475,000 |   |   |   | 5,749,000 |   |
| Due in 5 to 10 years  |   |                          | 2,385,000   |   |                              |   | 2,404,000 |   |   |   | 13,838,000 |   |   |   | 14,435,000 |   |
| Due after 10 years    |   |                          | 290,688,000 |   |                              |   | 287,346,000 |   |   |   | 86,872,000 |   |   |   | 88,979,000 |   |
| Equity securities     |   |                          | 371,000     |   |                              |   | 380,000 |   |   |   | - |   |   |   | - |   |
|                  |   | $                             | 296,394,000 |   |                              | $      | 293,229,000 |   |   | $ | 107,380,000 |   |   | $ | 110,366,000 |   |

----

|                 |   | For the three months endedMarch 31, 2011 |   |   | For the three months endedMarch 31, 2010 |   |
|----------------------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|
| Proceeds from sales  |   | $                                        | -      |   |                                     | $      | 202,000 |   |
| Gross gains          |   | $                                        | -      |   |                                     | $      | 2,000 |   |
| Gross losses         |   | $                                        | -      |   |                                     |   | - |   |
| Net gain             |   | $                                        | -      |   |                                     | $      | 2,000 |   |
| Related income taxes |   | $                                        | -      |   |                                     | $      | 1,000 |   |

|                             |   | Less than 12 months |        |   | 12 months or more |   |       | Total  |   |
|----------------------------------|--------|---------------------|-------------|--------|-------------------|--------|------------|--------|--------|
|                             |   | Fair                |        |   | Unrealized        |   |       | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                             |   | Value               |        |   | Losses            |   |       | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury and agency         |   | $                   | 2,645,000   |   |              | $      | (292,000   | )      |   | $ | - |   |   | $ | - |   |   | $ | 2,645,000 |   |   | $ | (292,000 | ) |
| Mortgage-backed securities       |   |                | 187,278,000 |   |              |   | (3,471,000 | )      |   |   | 6,757,000 |   |   |   | (336,000 | ) |   |   | 194,035,000 |   |   |   | (3,807,000 | ) |
| State and political subdivisions |   |                | 29,835,000  |   |              |   | (659,000   | )      |   |   | 1,398,000 |   |   |   | (383,000 | ) |   |   | 31,233,000 |   |   |   | (1,042,000 | ) |
| Corporate securities             |   |                | -           |   |              |   | -          |   |   |   | 922,000 |   |   |   | (185,000 | ) |   |   | 922,000 |   |   |   | (185,000 | ) |
| Other equity securities          |   |                | 10,000      |   |              |   | (2,000     | )      |   |   | 47,000 |   |   |   | (7,000 | ) |   |   | 57,000 |   |   |   | (9,000 | ) |
|                             |   | $                   | 219,768,000 |   |              | $      | (4,424,000 | )      |   | $ | 9,124,000 |   |   | $ | (911,000 | ) |   | $ | 228,892,000 |   |   | $ | (5,335,000 | ) |

|                             |   | Less than 12 months |        |   | 12 months or more |   |       | Total  |   |
|----------------------------------|--------|---------------------|-------------|--------|-------------------|--------|------------|--------|--------|
|                             |   | Fair                |        |   | Unrealized        |   |       | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                             |   | Value               |        |   | Losses            |   |       | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury and agency         |   | $                   | -           |   |              | $      | -          |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed securities       |   |                | 160,767,000 |   |              |   | (2,654,000 | )      |   |   | 5,348,000 |   |   |   | (226,000 | ) |   |   | 166,115,000 |   |   |   | (2,880,000 | ) |
| State and political subdivisions |   |                | 44,513,000  |   |              |   | (2,307,000 | )      |   |   | 1,355,000 |   |   |   | (407,000 | ) |   |   | 45,868,000 |   |   |   | (2,714,000 | ) |
| Corporate securities             |   |                | -           |   |              |   | -          |   |   |   | 866,000 |   |   |   | (247,000 | ) |   |   | 866,000 |   |   |   | (247,000 | ) |
| Other equity securities          |   |                | -           |   |              |   | -          |   |   |   | 56,000 |   |   |   | (10,000 | ) |   |   | 56,000 |   |   |   | (10,000 | ) |
|                             |   | $                   | 205,280,000 |   |              | $      | (4,961,000 | )      |   | $ | 7,625,000 |   |   | $ | (890,000 | ) |   | $ | 212,905,000 |   |   | $ | (5,851,000 | ) |

----

|                           |   | March 31, 2011 |        |   | December 31, 2010 |   |   | March 31, 2010 |   |
|--------------------------------|--------|----------------|-------------|--------|-------------------|--------|--------|----------------|--------|
| Commercial                     |   |           |        |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |
|    Real estate  |   | $              | 263,800,000 |   |              |   | 29.5   | %              |   | $ | 245,540,000 |   |   |   | 27.7 | % |   | $ | 242,017,000 |   |   |   | 25.9 | % |
|    Construction |   |           | 29,316,000  |   |              |   | 3.3    | %              |   |   | 41,869,000 |   |   |   | 4.7 | % |   |   | 49,026,000 |   |   |   | 5.2 | % |
|    Other        |   |           | 101,762,000 |   |              |   | 11.4   | %              |   |   | 101,462,000 |   |   |   | 11.4 | % |   |   | 121,669,000 |   |   |   | 13.0 | % |
| Municipal                      |   |           | 20,834,000  |   |              |   | 2.3    | %              |   |   | 21,833,000 |   |   |   | 2.5 | % |   |   | 24,203,000 |   |   |   | 2.6 | % |
| Residential                    |   |           |        |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |           | 340,841,000 |   |              |   | 38.1   | %              |   |   | 337,927,000 |   |   |   | 38.1 | % |   |   | 362,459,000 |   |   |   | 38.8 | % |
|    Construction |   |           | 13,370,000  |   |              |   | 1.5    | %              |   |   | 15,512,000 |   |   |   | 1.7 | % |   |   | 17,879,000 |   |   |   | 1.9 | % |
| Home equity line of credit     |   |           | 106,172,000 |   |              |   | 11.8   | %              |   |   | 105,297,000 |   |   |   | 11.9 | % |   |   | 98,241,000 |   |   |   | 10.5 | % |
| Consumer                       |   |           | 18,589,000  |   |              |   | 2.1    | %              |   |   | 18,156,000 |   |   |   | 2.0 | % |   |   | 19,514,000 |   |   |   | 2.1 | % |
| Total loans                    |   | $              | 894,684,000 |   |              |   | 100.0  | %              |   | $ | 887,596,000 |   |   |   | 100.0 | % |   | $ | 935,008,000 |   |   |   | 100.0 | % |

----

|                           |   | 30-89 DaysPast Due |      |   | 90+ DaysPast Due |   |       | AllPast Due |   |   | Current    |   |   | Total  |        |   | 90+ Days & Accruing |   |
|--------------------------------|--------|--------------------|-----------|--------|------------------|--------|------------|-------------|--------|--------|------------|--------|--------|--------|-------------|--------|-------------------------|--------|
| Commercial                     |   |               |      |   |             |   |       |        |   |   |       |   |   |   |        |   |                    |   |
|    Real estate  |   | $                  | 682,000   |   |             | $      | 6,431,000  |        |   | $      | 7,113,000  |   |   | $      | 256,687,000 |   |                    | $      | 263,800,000 |   |   | $ | 270,000 |   |
|    Construction |   |               | 65,000    |   |             |   | 256,000    |        |   |   | 321,000    |   |   |   | 28,995,000  |   |                    |   | 29,316,000 |   |   |   | - |   |
|    Other        |   |               | 858,000   |   |             |   | 563,000    |        |   |   | 1,421,000  |   |   |   | 100,341,000 |   |                    |   | 101,762,000 |   |   |   | 2,000 |   |
| Municipal                      |   |               | -         |   |             |   | -          |        |   |   | -          |   |   |   | 20,834,000  |   |                    |   | 20,834,000 |   |   |   | - |   |
| Residential                    |   |               |      |   |             |   |       |        |   |   |       |   |   |   |        |   |                    |   |   |   |   |   |   |   |
|    Term         |   |               | 5,456,000 |   |             |   | 8,623,000  |        |   |   | 14,079,000 |   |   |   | 326,762,000 |   |                    |   | 340,841,000 |   |   |   | - |   |
|    Construction |   |               | -         |   |             |   | 2,247,000  |        |   |   | 2,247,000  |   |   |   | 11,123,000  |   |                    |   | 13,370,000 |   |   |   | - |   |
| Home equity line of credit     |   |               | 759,000   |   |             |   | 604,000    |        |   |   | 1,363,000  |   |   |   | 104,809,000 |   |                    |   | 106,172,000 |   |   |   | - |   |
| Consumer                       |   |               | 250,000   |   |             |   | 19,000     |        |   |   | 269,000    |   |   |   | 18,320,000  |   |                    |   | 18,589,000 |   |   |   | 19,000 |   |
| Total                          |   | $                  | 8,070,000 |   |             | $      | 18,743,000 |        |   | $      | 26,813,000 |   |   | $      | 867,871,000 |   |                    | $      | 894,684,000 |   |   | $ | 291,000 |   |

|                           |   | 30-89 DaysPast Due |       |   | 90+ DaysPast Due |   |       | AllPast Due |   |   | Current    |   |   | Total  |        |   | 90+ Days& Accruing |   |
|--------------------------------|--------|--------------------|------------|--------|------------------|--------|------------|-------------|--------|--------|------------|--------|--------|--------|-------------|--------|------------------------|--------|
| Commercial                     |   |               |       |   |             |   |       |        |   |   |       |   |   |   |        |   |                   |   |
|    Real estate  |   | $                  | 2,055,000  |   |             | $      | 4,000,000  |        |   | $      | 6,055,000  |   |   | $      | 239,485,000 |   |                   | $      | 245,540,000 |   |   | $ | - |   |
|    Construction |   |               | 120,000    |   |             |   | 937,000    |        |   |   | 1,057,000  |   |   |   | 40,812,000  |   |                   |   | 41,869,000 |   |   |   | - |   |
|    Other        |   |               | 3,070,000  |   |             |   | 1,370,000  |        |   |   | 4,440,000  |   |   |   | 97,022,000  |   |                   |   | 101,462,000 |   |   |   | 524,000 |   |
| Municipal                      |   |               | -          |   |             |   | -          |        |   |   | -          |   |   |   | 21,833,000  |   |                   |   | 21,833,000 |   |   |   | - |   |
| Residential                    |   |               |       |   |             |   |       |        |   |   |       |   |   |   |        |   |                   |   |   |   |   |   |   |   |
|    Term         |   |               | 4,535,000  |   |             |   | 7,696,000  |        |   |   | 12,231,000 |   |   |   | 325,696,000 |   |                   |   | 337,927,000 |   |   |   | 585,000 |   |
|    Construction |   |               | 104,000    |   |             |   | 1,724,000  |        |   |   | 1,828,000  |   |   |   | 13,684,000  |   |                   |   | 15,512,000 |   |   |   | - |   |
| Home equity line of credit     |   |               | 1,564,000  |   |             |   | 474,000    |        |   |   | 2,038,000  |   |   |   | 103,259,000 |   |                   |   | 105,297,000 |   |   |   | - |   |
| Consumer                       |   |               | 259,000    |   |             |   | 7,000      |        |   |   | 266,000    |   |   |   | 17,890,000  |   |                   |   | 18,156,000 |   |   |   | 7,000 |   |
| Total                          |   | $                  | 11,707,000 |   |             | $      | 16,208,000 |        |   | $      | 27,915,000 |   |   | $      | 859,681,000 |   |                   | $      | 887,596,000 |   |   | $ | 1,116,000 |   |

----

|                           |   | March 31, 2011 |       |   | December 31, 2010 |   |       | March 31, 2010 |   |
|--------------------------------|--------|----------------|------------|--------|-------------------|--------|------------|----------------|--------|
| Commercial                     |   |           |       |   |              |   |       |           |   |
|    Real estate  |   | $              | 7,482,000  |   |              | $      | 5,946,000  |           |   | $ | 7,345,000 |   |
|    Construction |   |           | 813,000    |   |              |   | 937,000    |           |   |   | 459,000 |   |
|    Other        |   |           | 1,615,000  |   |              |   | 1,753,000  |           |   |   | 2,901,000 |   |
| Municipal                      |   |           | -          |   |              |   | -          |           |   |   | - |   |
| Residential                    |   |           |       |   |              |   |       |           |   |   |   |   |
|    Term         |   |           | 9,632,000  |   |              |   | 8,347,000  |           |   |   | 8,907,000 |   |
|    Construction |   |           | 2,247,000  |   |              |   | 3,567,000  |           |   |   | 3,176,000 |   |
| Home Equity Line of Credit     |   |           | 604,000    |   |              |   | 519,000    |           |   |   | 161,000 |   |
| Consumer                       |   |           | 105,000    |   |              |   | 106,000    |           |   |   | 69,000 |   |
| Total                          |   | $              | 22,498,000 |   |              | $      | 21,175,000 |           |   | $ | 23,018,000 |   |

|                                                                                 |   | March 31, 2011 |        |   | December 31, 2010 |   |        | March 31, 2010 |   |
|--------------------------------------------------------------------------------------|--------|----------------|-------------|--------|-------------------|--------|-------------|----------------|--------|
| Balance of impaired loans                                                            |   | $              | 26,814,000  |   |              | $      | 25,283,000  |           |   | $ | 26,086,000 |   |
| Less portion for which no allowance for loan losses is allocated                     |   |           | (18,191,000 | )      |              |   | (15,773,000 | )              |   |   | (16,706,000 | ) |
| Portion of impaired loan balance for which an allowance for loan losses is allocated |   | $              | 8,623,000   |   |              | $      | 9,510,000   |           |   | $ | 9,380,000 |   |
| Portion of allowance for loan losses allocated to the impaired loan balance          |   | $              | 1,621,000   |   |              | $      | 1,256,000   |           |   | $ | 2,115,000 |   |

----

|                           |   | Recorded Investment |       |   | UnpaidPrincipal Balance |   |       | Related Allowance |   |   | AverageRecorded Investment |   |   | Unrecognized InterestIncome |       |
|--------------------------------|--------|---------------------|------------|--------|-------------------------|--------|------------|-------------------|--------|--------|----------------------------|--------|--------|-----------------------------|------------|
| With No Related Allowance      |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |
|    Real estate  |   | $                   | 5,354,000  |   |                    | $      | 5,354,000  |              |   | $      | -                          |   |   | $                           | 4,557,000  |   |   |   | 63,000 |   |
|    Construction |   |                | 813,000    |   |                    |   | 813,000    |              |   |   | -                          |   |   |                        | 442,000    |   |   |   | 8,000 |   |
|    Other        |   |                | 1,033,000  |   |                    |   | 1,033,000  |              |   |   | -                          |   |   |                        | 1,173,000  |   |   |   | 21,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | -          |   |   |   | - |   |
| Residential                    |   |                | -          |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Term         |   |                | 8,907,000  |   |                    |   | 8,907,000  |              |   |   | -                          |   |   |                        | 8,120,000  |   |   |   | 100,000 |   |
|    Construction |   |                | 1,672,000  |   |                    |   | 1,672,000  |              |   |   | -                          |   |   |                        | 2,948,000  |   |   |   | 43,000 |   |
| Home Equity Line of Credit     |   |                | 373,000    |   |                    |   | 373,000    |              |   |   | -                          |   |   |                        | 317,000    |   |   |   | 2,000 |   |
| Consumer                       |   |                | 39,000     |   |                    |   | 39,000     |              |   |   | -                          |   |   |                        | 42,000     |   |   |   | 2,000 |   |
|                           |   | $                   | 18,191,000 |   |                    | $      | 18,191,000 |              |   | $      | -                          |   |   | $                           | 17,599,000 |   |   | $ | 239,000 |   |
| With an Allowance Recorded     |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Real estate  |   | $                   | 2,128,000  |   |                    | $      | 2,128,000  |              |   | $      | 593,000                    |   |   | $                           | 2,260,000  |   |   | $ | 28,000 |   |
|    Construction |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | 453,000    |   |   |   | 8,000 |   |
|    Other        |   |                | 571,000    |   |                    |   | 571,000    |              |   |   | 326,000                    |   |   |                        | 549,000    |   |   |   | 10,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | -          |   |   |   | - |   |
| Residential                    |   |                |       |   |                    |   |       |              |   |   | -                          |   |   |                        |       |   |   |   |   |   |
|    Term         |   |                | 5,041,000  |   |                    |   | 5,041,000  |              |   |   | 381,000                    |   |   |                        | 5,533,000  |   |   |   | 34,000 |   |
|    Construction |   |                | 576,000    |   |                    |   | 576,000    |              |   |   | 106,000                    |   |   |                        | 192,000    |   |   |   | 3,000 |   |
| Home Equity Line of Credit     |   |                | 231,000    |   |                    |   | 231,000    |              |   |   | 139,000                    |   |   |                        | 231,000    |   |   |   | 2,000 |   |
| Consumer                       |   |                | 76,000     |   |                    |   | 76,000     |              |   |   | 76,000                     |   |   |                        | 73,000     |   |   |   | 1,000 |   |
|                           |   | $                   | 8,623,000  |   |                    | $      | 8,623,000  |              |   | $      | 1,621,000                  |   |   | $                           | 9,291,000  |   |   | $ | 86,000 |   |
| Total                          |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Real estate  |   | $                   | 7,482,000  |   |                    | $      | 7,482,000  |              |   | $      | 593,000                    |   |   | $                           | 6,817,000  |   |   | $ | 91,000 |   |
|    Construction |   |                | 813,000    |   |                    |   | 813,000    |              |   |   | -                          |   |   |                        | 895,000    |   |   |   | 16,000 |   |
|    Other        |   |                | 1,604,000  |   |                    |   | 1,604,000  |              |   |   | 326,000                    |   |   |                        | 1,722,000  |   |   |   | 31,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | -          |   |   |   | - |   |
| Residential                    |   |                | -          |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Term         |   |                | 13,948,000 |   |                    |   | 13,948,000 |              |   |   | 381,000                    |   |   |                        | 13,653,000 |   |   |   | 134,000 |   |
|    Construction |   |                | 2,248,000  |   |                    |   | 2,248,000  |              |   |   | 106,000                    |   |   |                        | 3,140,000  |   |   |   | 46,000 |   |
| Home Equity Line of Credit     |   |                | 604,000    |   |                    |   | 604,000    |              |   |   | 139,000                    |   |   |                        | 548,000    |   |   |   | 4,000 |   |
| Consumer                       |   |                | 115,000    |   |                    |   | 115,000    |              |   |   | 76,000                     |   |   |                        | 115,000    |   |   |   | 3,000 |   |
|                           |   | $                   | 26,814,000 |   |                    | $      | 26,814,000 |              |   | $      | 1,621,000                  |   |   | $                           | 26,890,000 |   |   | $ | 325,000 |   |

----

|                           |   | Recorded Investment |       |   | UnpaidPrincipal Balance |   |       | Related Allowance |   |   | AverageRecorded Investment |   |   | Unrecognized InterestIncome |       |
|--------------------------------|--------|---------------------|------------|--------|-------------------------|--------|------------|-------------------|--------|--------|----------------------------|--------|--------|-----------------------------|------------|
| With No Related Allowance      |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |
|    Real estate  |   | $                   | 3,531,000  |   |                    | $      | 3,531,000  |              |   | $      | -                          |   |   | $                           | 3,967,000  |   |   | $ | 232,000 |   |
|    Construction |   |                | 257,000    |   |                    |   | 257,000    |              |   |   | -                          |   |   |                        | 271,000    |   |   |   | 20,000 |   |
|    Other        |   |                | 1,256,000  |   |                    |   | 1,256,000  |              |   |   | -                          |   |   |                        | 1,484,000  |   |   |   | 104,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | -          |   |   |   | - |   |
| Residential                    |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Term         |   |                | 6,804,000  |   |                    |   | 6,804,000  |              |   |   | -                          |   |   |                        | 7,814,000  |   |   |   | 436,000 |   |
|    Construction |   |                | 3,567,000  |   |                    |   | 3,567,000  |              |   |   | -                          |   |   |                        | 2,573,000  |   |   |   | 134,000 |   |
| Home Equity Line of Credit     |   |                | 319,000    |   |                    |   | 319,000    |              |   |   | -                          |   |   |                        | 196,000    |   |   |   | 6,000 |   |
| Consumer                       |   |                | 39,000     |   |                    |   | 39,000     |              |   |   | -                          |   |   |                        | 20,000     |   |   |   | 3,000 |   |
|                           |   | $                   | 15,773,000 |   |                    | $      | 15,773,000 |              |   | $      | -                          |   |   | $                           | 16,325,000 |   |   | $ | 935,000 |   |
| With an Allowance Recorded     |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Real estate  |   | $                   | 2,415,000  |   |                    | $      | 2,415,000  |              |   | $      | 192,000                    |   |   | $                           | 2,925,000  |   |   | $ | 157,000 |   |
|    Construction |   |                | 680,000    |   |                    |   | 680,000    |              |   |   | 152,000                    |   |   |                        | 305,000    |   |   |   | 22,000 |   |
|    Other        |   |                | 497,000    |   |                    |   | 497,000    |              |   |   | 291,000                    |   |   |                        | 912,000    |   |   |   | 60,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | -          |   |   |   | - |   |
| Residential                    |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Term         |   |                | 5,651,000  |   |                    |   | 5,651,000  |              |   |   | 432,000                    |   |   |                        | 4,869,000  |   |   |   | 134,000 |   |
|    Construction |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | 281,000    |   |   |   | 14,000 |   |
| Home Equity Line of Credit     |   |                | 200,000    |   |                    |   | 200,000    |              |   |   | 122,000                    |   |   |                        | 87,000     |   |   |   | 3,000 |   |
| Consumer                       |   |                | 67,000     |   |                    |   | 67,000     |              |   |   | 67,000                     |   |   |                        | 132,000    |   |   |   | 9,000 |   |
|                           |   | $                   | 9,510,000  |   |                    | $      | 9,510,000  |              |   | $      | 1,256,000                  |   |   | $                           | 9,511,000  |   |   | $ | 399,000 |   |
| Total                          |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Real estate  |   | $                   | 5,946,000  |   |                    | $      | 5,946,000  |              |   | $      | 192,000                    |   |   | $                           | 6,892,000  |   |   | $ | 389,000 |   |
|    Construction |   |                | 937,000    |   |                    |   | 937,000    |              |   |   | 152,000                    |   |   |                        | 576,000    |   |   |   | 42,000 |   |
|    Other        |   |                | 1,753,000  |   |                    |   | 1,753,000  |              |   |   | 291,000                    |   |   |                        | 2,396,000  |   |   |   | 164,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                        | -          |   |   |   | - |   |
| Residential                    |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                        |       |   |   |   |   |   |
|    Term         |   |                | 12,455,000 |   |                    |   | 12,455,000 |              |   |   | 432,000                    |   |   |                        | 12,683,000 |   |   |   | 570,000 |   |
|    Construction |   |                | 3,567,000  |   |                    |   | 3,567,000  |              |   |   | -                          |   |   |                        | 2,854,000  |   |   |   | 148,000 |   |
| Home Equity Line of Credit     |   |                | 519,000    |   |                    |   | 519,000    |              |   |   | 122,000                    |   |   |                        | 283,000    |   |   |   | 9,000 |   |
| Consumer                       |   |                | 106,000    |   |                    |   | 106,000    |              |   |   | 67,000                     |   |   |                        | 152,000    |   |   |   | 12,000 |   |
|                           |   | $                   | 25,283,000 |   |                    | $      | 25,283,000 |              |   | $      | 1,256,000                  |   |   | $                           | 25,836,000 |   |   | $ | 1,334,000 |   |

----

|  As of March 31, 2011     |   | Specific Reserves Evaluated Individually for Impairment |      |   | General Reserves Based on Historical Loss Experience |   |      | Reserves for Qualitative Factors |   |   | UnallocatedReserves |   |   | Total Reserves |      |
|--------------------------------|--------|---------------------------------------------------------|-----------|--------|------------------------------------------------------|--------|-----------|----------------------------------|--------|--------|---------------------|--------|--------|----------------|-----------|
| Commercial                     |   |                                                    |      |   |                                                 |   |      |                             |   |   |                |   |   |           |      |
|    Real estate  |   | $                                                       | 593,000   |   |                                                 | $      | 2,536,000 |                             |   | $      | 3,181,000           |   |   | $              | -         |   |   | $ | 6,310,000 |   |
|    Construction |   |                                                    | -         |   |                                                 |   | 284,000   |                             |   |   | 355,000             |   |   |           | -         |   |   |   | 639,000 |   |
|    Other        |   |                                                    | 326,000   |   |                                                 |   | 980,000   |                             |   |   | 1,229,000           |   |   |           | -         |   |   |   | 2,535,000 |   |
| Municipal                      |   |                                                    | -         |   |                                                 |   | -         |                             |   |   | 19,000              |   |   |           | -         |   |   |   | 19,000 |   |
| Residential                    |   |                                                    |      |   |                                                 |   |      |                             |   |   |                |   |   |           |      |   |   |   |   |   |
|    Term         |   |                                                    | 381,000   |   |                                                 |   | 457,000   |                             |   |   | 567,000             |   |   |           | -         |   |   |   | 1,405,000 |   |
|    Construction |   |                                                    | 106,000   |   |                                                 |   | 18,000    |                             |   |   | 22,000              |   |   |           | -         |   |   |   | 146,000 |   |
| Home Equity Line of Credit     |   |                                                    | 139,000   |   |                                                 |   | 67,000    |                             |   |   | 472,000             |   |   |           | -         |   |   |   | 678,000 |   |
| Consumer                       |   |                                                    | 76,000    |   |                                                 |   | 380,000   |                             |   |   | 257,000             |   |   |           | -         |   |   |   | 713,000 |   |
| Unallocated                    |   |                                                    | -         |   |                                                 |   | -         |                             |   |   | -                   |   |   |           | 1,555,000 |   |   |   | 1,555,000 |   |
|                           |   | $                                                       | 1,621,000 |   |                                                 | $      | 4,722,000 |                             |   | $      | 6,102,000           |   |   | $              | 1,555,000 |   |   | $ | 14,000,000 |   |

|  As of December 31, 2010  |   | Specific Reserves Evaluated Individually for Impairment |      |   | General Reserves Based on Historical Loss Experience |   |      | Reserves for Qualitative Factors |   |   | Unallocated Reserves |   |   | Total Reserves |      |
|--------------------------------|--------|---------------------------------------------------------|-----------|--------|------------------------------------------------------|--------|-----------|----------------------------------|--------|--------|----------------------|--------|--------|----------------|-----------|
| Commercial                     |   |                                                    |      |   |                                                 |   |      |                             |   |   |                 |   |   |           |      |
|    Real estate  |   | $                                                       | 192,000   |   |                                                 | $      | 2,183,000 |                             |   | $      | 2,885,000            |   |   | $              | -         |   |   | $ | 5,260,000 |   |
|    Construction |   |                                                    | 152,000   |   |                                                 |   | 370,000   |                             |   |   | 490,000              |   |   |           | -         |   |   |   | 1,012,000 |   |
|    Other        |   |                                                    | 291,000   |   |                                                 |   | 899,000   |                             |   |   | 1,187,000            |   |   |           | -         |   |   |   | 2,377,000 |   |
| Municipal                      |   |                                                    | -         |   |                                                 |   | -         |                             |   |   | 19,000               |   |   |           | -         |   |   |   | 19,000 |   |
| Residential                    |   |                                                    |      |   |                                                 |   |      |                             |   |   |                 |   |   |           |      |   |   |   |   |   |
|    Term         |   |                                                    | 432,000   |   |                                                 |   | 401,000   |                             |   |   | 575,000              |   |   |           | -         |   |   |   | 1,408,000 |   |
|    Construction |   |                                                    | -         |   |                                                 |   | 18,000    |                             |   |   | 26,000               |   |   |           | -         |   |   |   | 44,000 |   |
| Home Equity Line of Credit     |   |                                                    | 122,000   |   |                                                 |   | 72,000    |                             |   |   | 476,000              |   |   |           | -         |   |   |   | 670,000 |   |
| Consumer                       |   |                                                    | 67,000    |   |                                                 |   | 324,000   |                             |   |   | 255,000              |   |   |           | -         |   |   |   | 646,000 |   |
| Unallocated                    |   |                                                    | -         |   |                                                 |   | -         |                             |   |   | -                    |   |   |           | 1,880,000 |   |   |   | 1,880,000 |   |
|                           |   | $                                                       | 1,256,000 |   |                                                 | $      | 4,267,000 |                             |   | $      | 5,913,000            |   |   | $              | 1,880,000 |   |   | $ | 13,316,000 |   |

----

----

|            |   | CommercialConstruction |       |   | CommercialReal Estate |   |        | CommercialOther |   |   | MunicipalLoans |   |   | All Risk-Rated Loans |       |
|-----------------|--------|------------------------|------------|--------|-----------------------|--------|-------------|-----------------|--------|--------|----------------|--------|--------|----------------------|------------|
| 1 Strong        |   | $                      | -          |   |                  | $      | 30,000      |            |   | $      | 462,000        |   |   | $                    | 2,448,000  |   |   | $ | 2,940,000 |   |
| 2 Above Average |   |                   | 10,000     |   |                  |   | 21,270,000  |            |   |   | 4,399,000      |   |   |                 | 11,417,000 |   |   |   | 37,096,000 |   |
| 3 Satisfactory  |   |                   | 10,000     |   |                  |   | 45,331,000  |            |   |   | 17,258,000     |   |   |                 | 4,023,000  |   |   |   | 66,622,000 |   |
| 4 Average       |   |                   | 14,650,000 |   |                  |   | 120,462,000 |            |   |   | 40,071,000     |   |   |                 | 2,946,000  |   |   |   | 178,129,000 |   |
| 5 Watch         |   |                   | 5,896,000  |   |                  |   | 26,660,000  |            |   |   | 12,425,000     |   |   |                 | -          |   |   |   | 44,981,000 |   |
| 6 OAEM          |   |                   | 3,948,000  |   |                  |   | 18,797,000  |            |   |   | 6,700,000      |   |   |                 | -          |   |   |   | 29,445,000 |   |
| 7 Substandard   |   |                   | 4,802,000  |   |                  |   | 31,250,000  |            |   |   | 20,447,000     |   |   |                 | -          |   |   |   | 56,499,000 |   |
| 8 Doubtful      |   |                   | -          |   |                  |   | -           |            |   |   | -              |   |   |                 | -          |   |   |   | - |   |
| 9 Loss          |   |                   | -          |   |                  |   | -           |            |   |   | -              |   |   |                 | -          |   |   |   | - |   |
|  Total     |   | $                      | 29,316,000 |   |                  | $      | 263,800,000 |            |   | $      | 101,762,000    |   |   | $                    | 20,834,000 |   |   | $ | 415,712,000 |   |

|            |   | CommercialConstruction |       |   | CommercialReal Estate |   |        | CommercialOther |   |   | MunicipalLoans |   |   | All Risk-Rated Loans |       |
|-----------------|--------|------------------------|------------|--------|-----------------------|--------|-------------|-----------------|--------|--------|----------------|--------|--------|----------------------|------------|
| 1 Strong        |   | $                      | -          |   |                  | $      | 48,000      |            |   | $      | 395,000        |   |   | $                    | 2,481,000  |   |   | $ | 2,924,000 |   |
| 2 Above Average |   |                   | 10,000     |   |                  |   | 20,365,000  |            |   |   | 4,483,000      |   |   |                 | 11,453,000 |   |   |   | 36,311,000 |   |
| 3 Satisfactory  |   |                   | 4,694,000  |   |                  |   | 42,600,000  |            |   |   | 16,052,000     |   |   |                 | 4,900,000  |   |   |   | 68,246,000 |   |
| 4 Average       |   |                   | 22,177,000 |   |                  |   | 107,167,000 |            |   |   | 41,972,000     |   |   |                 | 2,999,000  |   |   |   | 174,315,000 |   |
| 5 Watch         |   |                   | 6,347,000  |   |                  |   | 27,898,000  |            |   |   | 12,203,000     |   |   |                 | -          |   |   |   | 46,448,000 |   |
| 6 OAEM          |   |                   | 3,715,000  |   |                  |   | 19,496,000  |            |   |   | 6,463,000      |   |   |                 | -          |   |   |   | 29,674,000 |   |
| 7 Substandard   |   |                   | 4,926,000  |   |                  |   | 27,966,000  |            |   |   | 19,894,000     |   |   |                 | -          |   |   |   | 52,786,000 |   |
| 8 Doubtful      |   |                   | -          |   |                  |   | -           |            |   |   | -              |   |   |                 | -          |   |   |   | - |   |
| 9 Loss          |   |                   | -          |   |                  |   | -           |            |   |   | -              |   |   |                 | -          |   |   |   | - |   |
|  Total     |   | $                      | 41,869,000 |   |                  | $      | 245,540,000 |            |   | $      | 101,462,000    |   |   | $                    | 21,833,000 |   |   | $ | 410,704,000 |   |

----

|  For the three months ended                     |   | Commercial  |        |   | Municipal    |   |       | Residential |   |   | Home Equity |   |   | Consumer |       |   | Unallocated  |   |        | Total          |   |
|------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|------------|-------------|--------|--------|-------------|--------|--------|----------|------------|--------|--------------|--------|-------------|----------------|--------|
| March 31, 2011                                       |   | Real Estate |        |   | Construction |   |       | Other       |   |   |        |   |   | Term     |       |   | Construction |   |        | Line of Credit |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses:                           |   |        |        |   |         |   |       |        |   |   |        |   |   |     |       |   |         |   |        |           |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                    |   | $           | 5,260,000   |   |         | $      | 1,012,000  |        |   | $      | 2,377,000   |   |   | $        | 19,000     |   |         | $      | 1,408,000   |           |   | $ | 44,000 |   |   | $ | 670,000 |   |   | $ | 646,000 |   |   | $ | 1,880,000 |   |   | $ | 13,316,000 |   |
| Charge offs                                          |   |        | 289,000     |   |         |   | -          |        |   |   | 161,000     |   |   |     | -          |   |         |   | 457,000     |           |   |   | 505,000 |   |   |   | 1,000 |   |   |   | 100,000 |   |   |   | - |   |   |   | 1,513,000 |   |
| Recoveries                                           |   |        | 5,000       |   |         |   | -          |        |   |   | 17,000      |   |   |     | -          |   |         |   | 3,000       |           |   |   | - |   |   |   | - |   |   |   | 72,000 |   |   |   | - |   |   |   | 97,000 |   |
| Provision                                            |   |        | 1,334,000   |   |         |   | (373,000   | )           |   |   | 302,000     |   |   |     | -          |   |         |   | 451,000     |           |   |   | 607,000 |   |   |   | 9,000 |   |   |   | 95,000 |   |   |   | (325,000 | ) |   |   | 2,100,000 |   |
| Ending balance                                       |   | $           | 6,310,000   |   |         | $      | 639,000    |        |   | $      | 2,535,000   |   |   | $        | 19,000     |   |         | $      | 1,405,000   |           |   | $ | 146,000 |   |   | $ | 678,000 |   |   | $ | 713,000 |   |   | $ | 1,555,000 |   |   | $ | 14,000,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 593,000     |   |         | $      | -          |        |   | $      | 326,000     |   |   | $        | -          |   |         | $      | 381,000     |           |   | $ | 106,000 |   |   | $ | 139,000 |   |   | $ | 76,000 |   |   | $ | - |   |   | $ | 1,621,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 5,717,000   |   |         | $      | 639,000    |        |   | $      | 2,209,000   |   |   | $        | 19,000     |   |         | $      | 1,024,000   |           |   | $ | 40,000 |   |   | $ | 539,000 |   |   | $ | 637,000 |   |   | $ | 1,555,000 |   |   | $ | 12,379,000 |   |
| Related loan balances:                               |   |        |        |   |         |   |       |        |   |   |        |   |   |     |       |   |         |   |        |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                       |   | $           | 263,800,000 |   |         | $      | 29,316,000 |        |   | $      | 101,762,000 |   |   | $        | 20,834,000 |   |         | $      | 340,841,000 |           |   | $ | 13,370,000 |   |   | $ | 106,172,000 |   |   | $ | 18,589,000 |   |   | $ | - |   |   | $ | 894,684,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 7,482,000   |   |         | $      | 813,000    |        |   | $      | 1,604,000   |   |   | $        | -          |   |         | $      | 13,948,000  |           |   | $ | 2,248,000 |   |   | $ | 604,000 |   |   | $ | 115,000 |   |   | $ | - |   |   | $ | 26,814,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 256,318,000 |   |         | $      | 28,503,000 |        |   | $      | 100,158,000 |   |   | $        | 20,834,000 |   |         | $      | 326,893,000 |           |   | $ | 11,122,000 |   |   | $ | 105,568,000 |   |   | $ | 18,474,000 |   |   | $ | - |   |   | $ | 867,870,000 |   |

|  For the three months ended                     |   | Commercial  |        |   | Municipal    |   |       | Residential |   |   | Home Equity |   |   | Consumer |       |   | Unallocated  |   |        | Total          |   |
|------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|------------|-------------|--------|--------|-------------|--------|--------|----------|------------|--------|--------------|--------|-------------|----------------|--------|
| March 31, 2010                                       |   | Real Estate |        |   | Construction |   |       | Other       |   |   |        |   |   | Term     |       |   | Construction |   |        | Line of Credit |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses:                           |   |        |        |   |         |   |       |        |   |   |        |   |   |     |       |   |         |   |        |           |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                    |   | $           | 4,986,000   |   |         | $      | 807,000    |        |   | $      | 3,363,000   |   |   | $        | 23,000     |   |         | $      | 1,198,000   |           |   | $ | 174,000 |   |   | $ | 515,000 |   |   | $ | 717,000 |   |   | $ | 1,854,000 |   |   | $ | 13,637,000 |   |
| Charge offs                                          |   |        | 779,000     |   |         |   | 175,000    |        |   |   | 316,000     |   |   |     | -          |   |         |   | 271,000     |           |   |   | - |   |   |   | - |   |   |   | 316,000 |   |   |   | - |   |   |   | 1,857,000 |   |
| Recoveries                                           |   |        | -           |   |         |   | -          |        |   |   | 22,000      |   |   |     | -          |   |         |   | 1,000       |           |   |   | - |   |   |   | - |   |   |   | 80,000 |   |   |   | - |   |   |   | 103,000 |   |
| Provision                                            |   |        | 795,000     |   |         |   | 293,000    |        |   |   | 40,000      |   |   |     | (2,000     | )      |         |   | 321,000     |           |   |   | 313,000 |   |   |   | (23,000 | ) |   |   | 175,000 |   |   |   | 488,000 |   |   |   | 2,400,000 |   |
| Ending balance                                       |   | $           | 5,002,000   |   |         | $      | 925,000    |        |   | $      | 3,109,000   |   |   | $        | 21,000     |   |         | $      | 1,249,000   |           |   | $ | 487,000 |   |   | $ | 492,000 |   |   | $ | 656,000 |   |   | $ | 2,342,000 |   |   | $ | 14,283,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 510,000     |   |         | $      | 23,000     |        |   | $      | 854,000     |   |   | $        | -          |   |         | $      | 199,000     |           |   | $ | 436,000 |   |   | $ | 24,000 |   |   | $ | 69,000 |   |   | $ | - |   |   | $ | 2,115,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 4,492,000   |   |         | $      | 902,000    |        |   | $      | 2,255,000   |   |   | $        | 21,000     |   |         | $      | 1,050,000   |           |   | $ | 51,000 |   |   | $ | 468,000 |   |   | $ | 587,000 |   |   | $ | 2,342,000 |   |   | $ | 12,168,000 |   |
| Related loan balances:                               |   |        |        |   |         |   |       |        |   |   |        |   |   |     |       |   |         |   |        |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                       |   | $           | 242,017,000 |   |         | $      | 49,026,000 |        |   | $      | 121,669,000 |   |   | $        | 24,203,000 |   |         | $      | 362,459,000 |           |   | $ | 17,879,000 |   |   | $ | 98,241,000 |   |   | $ | 19,514,000 |   |   | $ | - |   |   | $ | 935,008,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 7,345,000   |   |         | $      | 459,000    |        |   | $      | 2,901,000   |   |   | $        | -          |   |         | $      | 11,975,000  |           |   | $ | 3,176,000 |   |   | $ | 161,000 |   |   | $ | 69,000 |   |   | $ | - |   |   | $ | 26,086,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 234,672,000 |   |         | $      | 48,567,000 |        |   | $      | 118,768,000 |   |   | $        | 24,203,000 |   |         | $      | 350,484,000 |           |   | $ | 14,703,000 |   |   | $ | 98,080,000 |   |   | $ | 19,445,000 |   |   | $ | - |   |   | $ | 908,922,000 |   |

----

|  For the year ended                             |   | Commercial  |        |   | Municipal    |   |       | Residential |   |   | Home Equity |   |   | Consumer |       |   | Unallocated  |   |        | Total          |   |
|------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|------------|-------------|--------|--------|-------------|--------|--------|----------|------------|--------|--------------|--------|-------------|----------------|--------|
| December 31, 2010                                    |   | Real Estate |        |   | Construction |   |       | Other       |   |   |        |   |   | Term     |       |   | Construction |   |        | Line of Credit |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses:                           |   |        |        |   |         |   |       |        |   |   |        |   |   |     |       |   |         |   |        |           |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                    |   | $           | 4,986,000   |   |         | $      | 807,000    |        |   | $      | 3,363,000   |   |   | $        | 23,000     |   |         | $      | 1,198,000   |           |   | $ | 174,000 |   |   | $ | 515,000 |   |   | $ | 717,000 |   |   | $ | 1,854,000 |   |   | $ | 13,637,000 |   |
| Charge offs                                          |   |        | 4,005,000   |   |         |   | 175,000    |        |   |   | 1,125,000   |   |   |     | -          |   |         |   | 392,000     |           |   |   | 2,361,000 |   |   |   | 8,000 |   |   |   | 951,000 |   |   |   | - |   |   |   | 9,017,000 |   |
| Recoveries                                           |   |        | 4,000       |   |         |   | -          |        |   |   | 69,000      |   |   |     | -          |   |         |   | 4,000       |           |   |   | - |   |   |   | - |   |   |   | 219,000 |   |   |   | - |   |   |   | 296,000 |   |
| Provision                                            |   |        | 4,275,000   |   |         |   | 380,000    |        |   |   | 70,000      |   |   |     | (4,000     | )      |         |   | 598,000     |           |   |   | 2,231,000 |   |   |   | 163,000 |   |   |   | 661,000 |   |   |   | 26,000 |   |   |   | 8,400,000 |   |
| Ending balance                                       |   | $           | 5,260,000   |   |         | $      | 1,012,000  |        |   | $      | 2,377,000   |   |   | $        | 19,000     |   |         | $      | 1,408,000   |           |   | $ | 44,000 |   |   | $ | 670,000 |   |   | $ | 646,000 |   |   | $ | 1,880,000 |   |   | $ | 13,316,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 192,000     |   |         | $      | 152,000    |        |   | $      | 291,000     |   |   | $        | -          |   |         | $      | 432,000     |           |   | $ | - |   |   | $ | 122,000 |   |   | $ | 67,000 |   |   | $ | - |   |   | $ | 1,256,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 5,068,000   |   |         | $      | 860,000    |        |   | $      | 2,086,000   |   |   | $        | 19,000     |   |         | $      | 976,000     |           |   | $ | 44,000 |   |   | $ | 548,000 |   |   | $ | 579,000 |   |   | $ | 1,880,000 |   |   | $ | 12,060,000 |   |
| Related loan balances:                               |   |        |        |   |         |   |       |        |   |   |        |   |   |     |       |   |         |   |        |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                       |   | $           | 245,540,000 |   |         | $      | 41,869,000 |        |   | $      | 101,462,000 |   |   | $        | 21,833,000 |   |         | $      | 337,927,000 |           |   | $ | 15,512,000 |   |   | $ | 105,297,000 |   |   | $ | 18,156,000 |   |   | $ | - |   |   | $ | 887,596,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 5,946,000   |   |         | $      | 937,000    |        |   | $      | 1,753,000   |   |   | $        | -          |   |         | $      | 12,455,000  |           |   | $ | 3,567,000 |   |   | $ | 519,000 |   |   | $ | 106,000 |   |   | $ | - |   |   | $ | 25,283,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 239,594,000 |   |         | $      | 40,932,000 |        |   | $      | 99,709,000  |   |   | $        | 21,833,000 |   |         | $      | 325,472,000 |           |   | $ | 11,945,000 |   |   | $ | 104,778,000 |   |   | $ | 18,050,000 |   |   | $ | - |   |   | $ | 862,313,000 |   |

----

----

| ·   | The borrower demonstrates financial difficulty; common indicators include past due status with bank obligations, substandard credit bureau reports, or an inability to refinance with another lender, and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Bank has granted a concession; common concession types include maturity date extension, interest rate adjustments to below market pricing, and deferment of payments. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                            |   | Number of Shares |   |   | Weighted Average Exercise Price |   |   | Weighted Average Remaining Contractual Term (In years) |   |   | Aggregate Intrinsic Value(In thousands) |   |
|-------------------------------------------------|--------|------------------|--------|--------|---------------------------------|--------|--------|--------------------------------------------------------|--------|--------|-----------------------------------------|--------|
| Outstanding at December 31, 2010                |   |             | 55,500 |   |                            | $      | 15.89  |                                                   |   |   |                                    |   |   |   |
|      Granted in 2011   |   |             | -      |   |                            |   | -      |                                                   |   |   |                                    |   |   |   |
|      Exercised in 2011 |   |             | -      |   |                            |   | -      |                                                   |   |   |                                    |   |   |   |
|      Forfeited in 2011 |   |             | -      |   |                            |   | -      |                                                   |   |   |                                    |   |   |   |
| Outstanding at March 31, 2011                   |   |             | 55,500 |   |                            | $      | 15.89  |                                                   |   |   | 3.8                                     |   |   | $ | 51 |   |
| Exercisable at March 31, 2011                   |   |             | 55,500 |   |                            | $      | 15.89  |                                                   |   |   | 3.8                                     |   |   | $ | 51 |   |

----

----

|                                                                          |   | Income      |      |   | Shares        |   |      | Per-Share |   |
|-------------------------------------------------------------------------------|--------|-------------|-----------|--------|---------------|--------|-----------|-----------|--------|
|                                                                          |   | (Numerator) |      |   | (Denominator) |   |      | Amount    |   |
| For the three months ended March 31, 2011                                     |   |        |      |   |          |   |      |      |   |
| Net income as reported                                                        |   | $           | 3,143,000 |   |          |   |      |      |   |   |
| Less dividends and amortization of premium on preferred stock                 |   |        | 337,000   |   |          |   |      |      |   |   |
| Basic EPS: Income available to common shareholders                            |   |        | 2,806,000 |   |          |   | 9,778,756 |      |   | $ | 0.29 |   |
| Effect of dilutive securities:incentive stock options and restricted stock    |   |        |      |   |          |   | 8,527     |      |   |   |   |   |
| Diluted EPS: Income available to common shareholders plus assumed conversions |   | $           | 2,806,000 |   |          |   | 9,787,283 |      |   | $ | 0.29 |   |
| For the three months ended March 31, 2010                                     |   |        |      |   |          |   |      |      |   |   |   |   |
| Net income as reported                                                        |   | $           | 2,684,000 |   |          |   |      |      |   |   |   |   |
| Less dividends and amortization of premium on preferred stock                 |   |        | 337,000   |   |          |   |      |      |   |   |   |   |
| Basic EPS: Income available to common shareholders                            |   |        | 2,347,000 |   |          |   | 9,750,056 |      |   | $ | 0.24 |   |
| Effect of dilutive securities: incentive stock options                        |   |        |      |   |          |   | 4,888     |      |   |   |   |   |
| Diluted EPS: Income available to common shareholders plus assumed conversions |   | $           | 2,347,000 |   |          |   | 9,754,944 |      |   | $ | 0.24 |   |

|                             |  Outstanding |  In-the-Money |  Out-of-the-Money |
|----------------------------------|-------------------|--------------------|------------------------|
| As of March 31, 2011             |              |               |                   |
| Incentive stock options          | 55,500            | 13,500             | 42,000                 |
| Warrants issued to U.S. Treasury | 225,904           | -                  | 225,904                |
| Total dilutive securities        | 281,404           | 13,500             | 267,904                |
| As of March 31, 2010             |              |               |                   |
| Incentive stock options          | 55,500            | 13,500             | 42,000                 |
| Warrants issued to U.S. Treasury | 225,904           | -                  | 225,904                |
| Total dilutive securities        | 281,404           | 13,500             | 267,904                |

----

|                                    |   | At March 31, |       |
|-----------------------------------------|--------|--------------|------------|
|                                    |   | 2011         |       |   | 2010 |   |
| Change in benefit obligation            |   |         |       |   |   |   |
| Benefit obligation at beginning of year |   | $            | 1,796,000  |   |   | $ | 1,962,000 |   |
| Service cost                            |   |         | 4,000      |   |   |   | 5,000 |   |
| Interest cost                           |   |         | 29,000     |   |   |   | 34,000 |   |
| Benefits paid                           |   |         | (39,000    | ) |   |   | (37,000 | ) |
| Benefit obligation at end of period     |   |         | 1,790,000  |   |   |   | 1,964,000 |   |
| Funded status                           |   |         |       |   |   |   |   |   |
| Benefit obligation at end of period     |   |         | (1,790,000 | ) |   |   | (1,964,000 | ) |
| Accrued benefit cost at end of period   |   | $            | (1,790,000 | ) |   | $ | (1,964,000 | ) |

|                                               |   | For three months endedMarch 31, |   |
|----------------------------------------------------|--------|---------------------------------|--------|
|                                               |   | 2011                            |   |   | 2010 |   |
| Components of net periodic benefit cost            |   |                            |   |   |   |   |
| Service cost                                       |   | $                               | 4,000  |   |   | $ | 5,000 |   |
| Interest cost                                      |   |                            | 29,000 |   |   |   | 34,000 |   |
| Amortization of unrecognized transition obligation |   |                            | 7,000  |   |   |   | 7,000 |   |
| Amortization of prior service credit               |   |                            | -      |   |   |   | (1,000 | ) |
| Amortization of accumulated losses                 |   |                            | 5,000  |   |   |   | 5,000 |   |
| Net periodic benefit cost                          |   | $                               | 45,000 |   |   | $ | 50,000 |   |

----

|                                                                                               |   | March 31,2011 |     |   | December 31,2010 |   |     | March 31,2010 |   |
|----------------------------------------------------------------------------------------------------|--------|---------------|----------|--------|------------------|--------|----------|---------------|--------|
| Unamortized net actuarial loss                                                                     |   | $             | (49,000  | )      |             | $      | (49,000  | )             |   | $ | (233,000 | ) |
| Unrecognized transition obligation                                                                 |   |          | (56,000  | )      |             |   | (63,000  | )             |   |   | (85,000 | ) |
|                                                                                               |   |          | (105,000 | )      |             |   | (112,000 | )             |   |   | (318,000 | ) |
| Deferred tax benefit at 35%                                                                        |   |          | 37,000   |   |             |   | 39,000   |          |   |   | 111,000 |   |
| Net unrecognized postretirement benefits included in accumulated other comprehensive income (loss) |   | $             | (68,000  | )      |             | $      | (73,000  | )             |   | $ | (207,000 | ) |

|                      |   | March 31, 2011 |       |   | December 31, 2010 |   |       | March 31, 2010 |   |
|---------------------------|--------|----------------|------------|--------|-------------------|--------|------------|----------------|--------|
| Mortgage servicing rights |   | $              | 5,927,000  |   |              | $      | 5,732,000  |           |   | $ | 5,205,000 |   |
| Accumulated amortization  |   |           | (4,417,000 | )      |              |   | (4,265,000 | )              |   |   | (3,913,000 | ) |
| Impairment reserve        |   |           | (20,000    | )      |              |   | (23,000    | )              |   |   | (68,000 | ) |
|                      |   | $              | 1,490,000  |   |              | $      | 1,444,000  |           |   | $ | 1,224,000 |   |

----

|                                  |   | March 31, 2011 |        |   | December 31, 2010 |   |        | March 31, 2010 |   |
|---------------------------------------|--------|----------------|-------------|--------|-------------------|--------|-------------|----------------|--------|
| Certificates of deposit < $100,000 |   | $              | 308,127,000 |   |              | $      | 231,945,000 |           |   | $ | 228,670,000 |   |
| Certificates $100,000 to $250,000     |   |           | 337,018,000 |   |              |   | 338,452,000 |           |   |   | 314,010,000 |   |
| Certificates $250,000 and over        |   |           | 35,440,000  |   |              |   | 37,792,000  |           |   |   | 43,637,000 |   |
|                                  |   | $              | 680,585,000 |   |              | $      | 608,189,000 |           |   | $ | 586,317,000 |   |

----

|                                               |   | At March 31, 2011 |   |
|----------------------------------------------------|--------|-------------------|--------|
|                                               |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Securities available for sale                      |   |              |   |   |   |   |   |   |   |   |   |   |
|    U.S. Treasury and agency         |   | $                 | -      |   |   | $ | 15,943,000 |   |   | $ | - |   |   | $ | 15,943,000 |   |
|    Mortgage-backed securities       |   |              | -      |   |   |   | 253,110,000 |   |   |   | - |   |   |   | 253,110,000 |   |
|    State and political subdivisions |   |              | -      |   |   |   | 55,081,000 |   |   |   | - |   |   |   | 55,081,000 |   |
|    Corporate securities             |   |              | -      |   |   |   | 923,000 |   |   |   | - |   |   |   | 923,000 |   |
|    Other equity securities          |   |              | -      |   |   |   | 394,000 |   |   |   | - |   |   |   | 394,000 |   |
| Total assets                                       |   | $                 | -      |   |   | $ | 325,451,000 |   |   | $ | - |   |   | $ | 325,451,000 |   |

|                                               |   | At December 31, 2010 |   |
|----------------------------------------------------|--------|----------------------|--------|
|                                               |   | Level 1              |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Securities available for sale                      |   |                 |   |   |   |   |   |   |   |   |   |   |
|    U.S. Treasury and agency         |   | $                    | -      |   |   | $ | 16,045,000 |   |   | $ | - |   |   | $ | 16,045,000 |   |
|    Mortgage-backed securities       |   |                 | -      |   |   |   | 234,414,000 |   |   |   | - |   |   |   | 234,414,000 |   |
|    State and political subdivisions |   |                 | -      |   |   |   | 41,524,000 |   |   |   | - |   |   |   | 41,524,000 |   |
|    Corporate securities             |   |                 | -      |   |   |   | 866,000 |   |   |   | - |   |   |   | 866,000 |   |
|    Other equity securities          |   |                 | -      |   |   |   | 380,000 |   |   |   | - |   |   |   | 380,000 |   |
| Total assets                                       |   | $                    | -      |   |   | $ | 293,229,000 |   |   | $ | - |   |   | $ | 293,229,000 |   |

----

|                      |   | At March 31, 2011 |   |
|---------------------------|--------|-------------------|--------|
|                      |   | Level 1           |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Mortgage servicing rights |   | $                 | -      |   |   | $ | 2,205,000 |   |   | $ | - |   |   | $ | 2,205,000 |   |
| Loans held for sale       |   |              | -      |   |   |   | 450,000 |   |   |   | - |   |   |   | 450,000 |   |
| Other real estate owned   |   |              | -      |   |   |   | 4,575,000 |   |   |   | - |   |   |   | 4,575,000 |   |
| Impaired loans            |   |              | -      |   |   |   | 7,002,000 |   |   |   | - |   |   |   | 7,002,000 |   |
| Total assets              |   | $                 | -      |   |   | $ | 14,232,000 |   |   | $ | - |   |   | $ | 14,232,000 |   |

|                      |   | At December 31, 2010 |   |
|---------------------------|--------|----------------------|--------|
|                      |   | Level 1              |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Mortgage servicing rights |   | $                    | -      |   |   | $ | 1,684,000 |   |   | $ | - |   |   | $ | 1,684,000 |   |
| Loans held for sale       |   |                 | -      |   |   |   | 2,806,000 |   |   |   | - |   |   |   | 2,806,000 |   |
| Other real estate owned   |   |                 | -      |   |   |   | 4,929,000 |   |   |   | - |   |   |   | 4,929,000 |   |
| Impaired loans            |   |                 | -      |   |   |   | 8,254,000 |   |   |   | - |   |   |   | 8,254,000 |   |
| Total assets              |   | $                    | -      |   |   | $ | 17,673,000 |   |   | $ | - |   |   | $ | 17,673,000 |   |

|                                                  |   | March 31, 2011 |          |   | December 31, 2010 |   |
|-------------------------------------------------------|--------|----------------|---------------|--------|-------------------|--------|
|                                                  |   | Carrying       |          |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
|                                                  |   | amount         |          |   | fair value        |   |   | amount |   |   | fair value |   |
| Financial assets                                      |   |           |          |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                             |   | $              | 13,700,000    |   |              | $      | 13,700,000 |   |   | $ | 13,838,000 |   |   | $ | 13,838,000 |   |
| Time deposits in other banks                          |   |           | 100,000       |   |              |   | 100,000 |   |   |   | 100,000 |   |   |   | 100,000 |   |
| Securities available for sale                         |   |           | 325,451,000   |   |              |   | 325,451,000 |   |   |   | 293,229,000 |   |   |   | 293,229,000 |   |
| Securities to be held to maturity                     |   |           | 109,936,000   |   |              |   | 114,051,000 |   |   |   | 107,380,000 |   |   |   | 110,366,000 |   |
| Federal Home Loan Bank and Federal Reserve Bank stock |   |           | 15,443,000    |   |              |   | 15,443,000 |   |   |   | 15,443,000 |   |   |   | 15,443,000 |   |
| Loans held for sale                                   |   |           | 450,000       |   |              |   | 450,000 |   |   |   | 2,806,000 |   |   |   | 2,806,000 |   |
| Loans (net of allowance for loan losses)              |   |           | 880,684,000   |   |              |   | 885,204,000 |   |   |   | 874,280,000 |   |   |   | 878,856,000 |   |
| Accrued interest receivable                           |   |           | 6,236,000     |   |              |   | 6,236,000 |   |   |   | 5,263,000 |   |   |   | 5,263,000 |   |
| Financial liabilities                                 |   |           |          |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                              |   | $              | 1,050,257,000 |   |              | $      | 998,261,000 |   |   | $ | 974,518,000 |   |   | $ | 924,903,000 |   |
| Borrowed funds                                        |   |           | 217,534,000   |   |              |   | 222,498,000 |   |   |   | 257,330,000 |   |   |   | 262,984,000 |   |
| Accrued interest payable                              |   |           | 814,000       |   |              |   | 814,000 |   |   |   | 926,000 |   |   |   | 926,000 |   |

----

----

----

----

----

|                                |   | For the three months endedMarch 31, |   |
|-------------------------------------|--------|-------------------------------------|--------|
| In thousands of dollars             |   | 2011                                |   |   | 2010 |   |
| Net interest income as presented    |   | $                                   | 10,505 |   |   | $ | 10,021 |   |
| Effect of tax-exempt income         |   |                                | 609    |   |   |   | 560 |   |
| Net interest income, tax equivalent |   | $                                   | 11,114 |   |   | $ | 10,581 |   |

|                                                  |   | For the three months endedMarch 31, |   |
|-------------------------------------------------------|--------|-------------------------------------|--------|
| In thousands of dollars                               |   | 2011                                |   |   | 2010 |   |
| Non-interest expense, as presented                    |   | $                                   | 6,488  |   |   | $ | 6,282 |   |
| Net securities losses                                 |   |                                | -      |   |   |   | - |   |
| Adjusted non-interest expense                         |   |                                | 6,488  |   |   |   | 6,282 |   |
| Net interest income, as presented                     |   |                                | 10,505 |   |   |   | 10,021 |   |
| Effect of tax-exempt income                           |   |                                | 609    |   |   |   | 560 |   |
| Non-interest income, as presented                     |   |                                | 2,277  |   |   |   | 2,175 |   |
| Effect of non-interest tax-exempt income              |   |                                | 47     |   |   |   | 47 |   |
| Net securities gains                                  |   |                                | -      |   |   |   | 2 |   |
| Adjusted net interest income plus non-interest income |   | $                                   | 13,438 |   |   | $ | 12,805 |   |
| Non-GAAP efficiency ratio                             |   |                                | 48.28  | % |   |   | 49.06 | % |
| GAAP efficiency ratio                                 |   |                                | 50.76  | % |   |   | 51.51 | % |

----

|                                      |   | For the three months endedMarch 31, |    |
|-------------------------------------------|--------|-------------------------------------|---------|
|  In thousands of dollars             |   | 2011                                |    |   | 2010 |   |
| Average shareholders' equity as presented |   | $                                   | 151,969 |   |   | $ | 149,911 |   |
|   Less preferred stock          |   |                                | (24,705 | ) |   |   | (24,606 | ) |
|   Less intangible assets        |   |                                | (27,684 | ) |   |   | (27,684 | ) |
| Average tangible common equity            |   | $                                   | 99,580  |   |   | $ | 97,621 |   |

----

|                                                 |   | For the three months ended |   |
|------------------------------------------------------|--------|----------------------------|--------|
|                                                 |   | March 31, 2011             |   |   | March 31, 2010 |   |
| Dollars in thousands                                 |   | Amount of interest         |   |   | Average Yield/Rate |   |   | Amount of interest |   |   | Average Yield/Rate |   |
| Interest on earning assets                           |   |                       |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits                            |   | $                          | 0      |   |   |   | 0.25 | % |   | $ | 2 |   |   |   | 0.20 | % |
| Investments                                          |   |                       | 4,593  |   |   |   | 4.34 | % |   |   | 3,417 |   |   |   | 4.89 | % |
| Loans held for sale                                  |   |                       | 150    |   |   |   | 39.37 | % |   |   | 37 |   |   |   | 4.80 | % |
| Loans                                                |   |                       | 10,120 |   |   |   | 4.59 | % |   |   | 11,237 |   |   |   | 4.87 | % |
|    Total interest-earning assets      |   |                       | 14,863 |   |   |   | 4.55 | % |   |   | 14,693 |   |   |   | 4.87 | % |
| Interest-bearing liabilities                         |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                             |   |                       | 2,563  |   |   |   | 1.09 | % |   |   | 2,480 |   |   |   | 1.15 | % |
| Other borrowings                                     |   |                       | 1,186  |   |   |   | 2.13 | % |   |   | 1,632 |   |   |   | 2.87 | % |
|    Total interest-bearing liabilities |   |                       | 3,749  |   |   |   | 1.29 | % |   |   | 4,112 |   |   |   | 1.51 | % |
| Net interest income                                  |   | $                          | 11,114 |   |   |   |   |   |   | $ | 10,581 |   |   |   |   |   |
| Interest rate spread                                 |   |                       |   |   |   |   | 3.26 | % |   |   |   |   |   |   | 3.36 | % |
| Net interest margin                                  |   |                       |   |   |   |   | 3.40 | % |   |   |   |   |   |   | 3.51 | % |

| Three months ended March 31, 2011 compared to 2010 |   |   |   |   |
|----------------------------------------------------|--------|--------|--------|--------|
| Dollars in thousands                               |   | Volume |   |   | Rate |   |   | Rate/Volume1 |   |   | Total |   |
| Interest on earning assets                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits                          |   | $      | (2     | )      |   | $ | - |   |   | $ | - |   |   | $ | (2 | ) |
| Investment securities                              |   |   | 1,752  |   |   |   | (381 | ) |   |   | (195 | ) |   |   | 1,176 |   |
| Loans held for sale                                |   |   | (19    | )      |   |   | (3 | ) |   |   | 2 |   |   |   | (20 | ) |
| Loans                                              |   |   | (509   | )      |   |   | (498 | ) |   |   | 23 |   |   |   | (984 | ) |
|    Total interest income            |   |   | 1,222  |   |   |   | (882 | ) |   |   | (170 | ) |   |   | 170 |   |
| Interest expense                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                           |   |   | 226    |   |   |   | (131 | ) |   |   | (12 | ) |   |   | 83 |   |
| Other borrowings2                                  |   |   | (33    | )      |   |   | (421 | ) |   |   | 8 |   |   |   | (446 | ) |
| Total interest expense                             |   |   | 193    |   |   |   | (552 | ) |   |   | (4 | ) |   |   | (363 | ) |
|    Change in net interest income    |   | $      | 1,029  |   |   | $ | (330 | ) |   | $ | (166 | ) |   | $ | 533 |   |

----

|                                                                                         |   | For the three months ended March 31, |      |
|----------------------------------------------------------------------------------------------|--------|-------------------------------------------|-----------|
|  In thousands of dollars                                                                |   | 2011                                      |      |   | 2010 |   |
| Assets                                                                                       |   |                                      |      |   |   |   |
| Cash and due from banks                                                                      |   | $                                         | 16,208    |   |   | $ | 15,387 |   |
| Time deposits in other banks                                                                 |   |                                      | 100       |   |   |   | - |   |
| Securities available for sale                                                                |   |                                      | 309,105   |   |   |   | 107,396 |   |
| Securities to be held to maturity                                                            |   |                                      | 104,493   |   |   |   | 176,246 |   |
| Federal Reserve Bank stock, at cost                                                          |   |                                      | 1,412     |   |   |   | 1,412 |   |
| Federal Home Loan Bank Stock, at cost                                                        |   |                                      | 14,031    |   |   |   | 14,031 |   |
| Loans held for sale (fair value approximates cost)                                           |   |                                      | 1,545     |   |   |   | 3,123 |   |
| Loans                                                                                        |   |                                      | 894,068   |   |   |   | 936,488 |   |
| Allowance for loan losses                                                                    |   |                                      | (13,851   | ) |   |   | (14,225 | ) |
|      Net loans                                                      |   |                                      | 880,217   |   |   |   | 922,263 |   |
| Accrued interest receivable                                                                  |   |                                      | 5,283     |   |   |   | 5,358 |   |
| Premises and equipment                                                                       |   |                                      | 18,887    |   |   |   | 18,220 |   |
| Other real estate owned                                                                      |   |                                      | 5,000     |   |   |   | 5,654 |   |
| Goodwill                                                                                     |   |                                      | 27,684    |   |   |   | 27,684 |   |
| Other assets                                                                                 |   |                                      | 28,540    |   |   |   | 29,416 |   |
|         Total Assets                                 |   | $                                         | 1,412,505 |   |   | $ | 1,326,190 |   |
| Liabilities & Shareholders’ Equity                                                 |   |                                      |      |   |   |   |   |   |
| Demand deposits                                                                              |   | $                                         | 69,766    |   |   | $ | 61,476 |   |
| NOW deposits                                                                                 |   |                                      | 122,249   |   |   |   | 115,186 |   |
| Money market deposits                                                                        |   |                                      | 75,518    |   |   |   | 90,402 |   |
| Savings deposits                                                                             |   |                                      | 103,763   |   |   |   | 92,897 |   |
| Certificates of deposit                                                                      |   |                                      | 653,092   |   |   |   | 576,308 |   |
|      Total deposits                                                 |   |                                      | 1,024,388 |   |   |   | 936,269 |   |
| Borrowed funds – short term                                                            |   |                                      | 25,889    |   |   |   | 80,150 |   |
| Borrowed funds – long term                                                             |   |                                      | 199,778   |   |   |   | 150,218 |   |
| Dividends payable                                                                            |   |                                      | 976       |   |   |   | 977 |   |
| Other liabilities                                                                            |   |                                      | 9,506     |   |   |   | 8,665 |   |
|      Total Liabilities                                              |   |                                      | 1,260,537 |   |   |   | 1,176,279 |   |
| Shareholders’ Equity:                                                                  |   |                                      |      |   |   |   |   |   |
| Preferred stock                                                                              |   |                                      | 24,705    |   |   |   | 24,606 |   |
| Common stock                                                                                 |   |                                      | 98        |   |   |   | 97 |   |
| Additional paid-in capital                                                                   |   |                                      | 45,536    |   |   |   | 45,187 |   |
| Retained earnings                                                                            |   |                                      | 83,257    |   |   |   | 80,194 |   |
| Net unrealized gain (loss) on available-for-sale securities                                  |   |                                      | (1,557    | ) |   |   | 37 |   |
| Net unrealized loss on postretirement benefit costs                                          |   |                                      | (70       | ) |   |   | (210 | ) |
|     Total Shareholders’ Equity                                     |   |                                      | 151,969   |   |   |   | 149,911 |   |
|        Total Liabilities & Shareholders’ Equity |   | $                                         | 1,412,505 |   |   | $ | 1,326,190 |   |

----

----

| Dollars in thousands              |   | March 31, 2011 |    |   | December 31, 2010 |   |    | March 31, 2010 |   |
|-----------------------------------|--------|----------------|---------|--------|-------------------|--------|---------|----------------|--------|
| Securities available for sale     |   |           |    |   |              |   |    |           |   |
| U.S. Treasury and agency          |   | $              | 15,943  |   |              | $      | 16,045  |           |   | $ | 58,363 |   |
| Mortgage-backed securities        |   |           | 253,110 |   |              |   | 234,414 |           |   |   | 49,579 |   |
| State and political subdivisions  |   |           | 55,081  |   |              |   | 41,524  |           |   |   | 22,253 |   |
| Corporate securities              |   |           | 923     |   |              |   | 866     |           |   |   | 829 |   |
| Other equity securities           |   |           | 394     |   |              |   | 380     |           |   |   | 417 |   |
|                              |   | $              | 325,451 |   |              | $      | 293,229 |           |   | $ | 131,441 |   |
| Securities to be held to maturity |   |           |    |   |              |   |    |           |   |   |   |   |
| U.S. Treasury and agency          |   | $              | 2,936   |   |              | $      | 2,190   |           |   | $ | 29,341 |   |
| Mortgage-backed securities        |   |           | 59,063  |   |              |   | 55,710  |           |   |   | 79,470 |   |
| State and political subdivisions  |   |           | 47,787  |   |              |   | 49,330  |           |   |   | 56,063 |   |
| Corporate securities              |   |           | 150     |   |              |   | 150     |           |   |   | 150 |   |
|                              |   | $              | 109,936 |   |              | $      | 107,380 |           |   | $ | 165,024 |   |
| Non-marketable securities:        |   |           |    |   |              |   |    |           |   |   |   |   |
| Federal Home Loan Bank Stock      |   | $              | 14,031  |   |              | $      | 1,412   |           |   | $ | 14,031 |   |
| Federal Reserve Bank Stock        |   |           | 1,412   |   |              |   | 14,031  |           |   |   | 1,412 |   |
|                              |   | $              | 15,443  |   |              | $      | 15,443  |           |   | $ | 15,443 |   |
| Total securities                  |   | $              | 450,830 |   |              | $      | 416,052 |           |   | $ | 311,908 |   |

----

|                                     |   | Available For Sale |    |   | Held to Maturity  |   |
|------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
|  Dollars in thousands               |   | FairValue          |    |   | Yield to maturity |   |   | Amortized Cost |   |   | Yield to maturity |   |
|  U.S. Treasury & Agency         |   |               |    |   |              |   |   |   |   |   |   |   |
|  Due in 1 year or less              |   | $                  | -       |   |              |   | 0.00 | % |   | $ | - |   |   |   | 0.00 | % |
|  Due in 1 to 5 years                |   |               | -       |   |              |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
|  Due in 5 to 10 years               |   |               | -       |   |              |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
|  Due after 10 years                 |   |               | 15,943  |   |              |   | 5.34 | % |   |   | 2,936 |   |   |   | 5.57 | % |
|   Total                        |   |               | 15,943  |   |              |   | 5.34 | % |   |   | 2,936 |   |   |   | 5.57 | % |
|  Mortgage-Backed Securities         |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  Due in 1 year or less              |   |               | 17      |   |              |   | 5.27 | % |   |   | 327 |   |   |   | 3.93 | % |
|  Due in 1 to 5 years                |   |               | -       |   |              |   | 0.00 | % |   |   | 491 |   |   |   | 4.42 | % |
|  Due in 5 to 10 years               |   |               | 3,519   |   |              |   | 3.84 | % |   |   | 2,007 |   |   |   | 6.06 | % |
|  Due after 10 years                 |   |               | 249,574 |   |              |   | 3.56 | % |   |   | 56,238 |   |   |   | 4.16 | % |
|   Total                        |   |               | 253,110 |   |              |   | 3.56 | % |   |   | 59,063 |   |   |   | 4.23 | % |
|  State & Political Subdivisions |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  Due in 1 year or less              |   |               | 201     |   |              |   | 6.85 | % |   |   | 595 |   |   |   | 7.18 | % |
|  Due in 1 to 5 years                |   |               | 2,964   |   |              |   | 7.21 | % |   |   | 5,138 |   |   |   | 6.33 | % |
|  Due in 5 to 10 years               |   |               | 1,397   |   |              |   | 6.89 | % |   |   | 14,967 |   |   |   | 6.43 | % |
|  Due after 10 years                 |   |               | 50,519  |   |              |   | 6.49 | % |   |   | 27,087 |   |   |   | 6.30 | % |
|   Total                        |   |               | 55,081  |   |              |   | 6.54 | % |   |   | 47,787 |   |   |   | 6.35 | % |
|  Corporate Securities               |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  Due in 1 year or less              |   |               | -       |   |              |   | 0.00 | % |   |   | 150 |   |   |   | 1.50 | % |
|  Due in 1 to 5 years                |   |               | -       |   |              |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
|  Due in 5 to 10 years               |   |               | -       |   |              |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
|  Due after 10 years                 |   |               | 923     |   |              |   | 1.34 | % |   |   | - |   |   |   | 0.00 | % |
|   Total                        |   |               | 923     |   |              |   | 1.34 | % |   |   | 150 |   |   |   | 1.50 | % |
|  Equity Securities                  |   |               | 394     |   |              |   | 2.94 | % |   |   | - |   |   |   | 0.00 | % |
|                                     |   | $                  | 325,451 |   |              |   | 4.14 | % |   | $ | 109,936 |   |   |   | 5.18 | % |

----

|                             |   | Less than 12 months |    |   | 12 months or more |   |   | Total  |   |
|----------------------------------|--------|---------------------|---------|--------|-------------------|--------|--------|--------|--------|
|                             |   | Fair                |    |   | Unrealized        |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| In thousands of dollars          |   | Value               |    |   | Losses            |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury and agency         |   | $                   | 2,645   |   |              | $      | (292   | )      |   | $ | - |   |   | $ | - |   |   | $ | 2,645 |   |   | $ | (292 | ) |
| Mortgage-backed securities       |   |                | 187,278 |   |              |   | (3,471 | )      |   |   | 6,757 |   |   |   | (336 | ) |   |   | 194,035 |   |   |   | (3,807 | ) |
| State and political subdivisions |   |                | 29,835  |   |              |   | (659   | )      |   |   | 1,398 |   |   |   | (383 | ) |   |   | 31,233 |   |   |   | (1,042 | ) |
| Corporate securities             |   |                | -       |   |              |   | -      |   |   |   | 922 |   |   |   | (185 | ) |   |   | 922 |   |   |   | (185 | ) |
| Other equity securities          |   |                | 10      |   |              |   | (2     | )      |   |   | 47 |   |   |   | (7 | ) |   |   | 57 |   |   |   | (9 | ) |
|                             |   | $                   | 219,768 |   |              | $      | (4,424 | )      |   | $ | 9,124 |   |   | $ | (911 | ) |   | $ | 228,892 |   |   | $ | (5,335 | ) |

----

----

| Dollars in thousands           |   | March 31, 2011 |    |   | December 31, 2010 |   |   | March 31, 2010 |   |
|--------------------------------|--------|----------------|---------|--------|-------------------|--------|--------|----------------|--------|
| Commercial                     |   |           |    |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |
|    Real estate  |   | $              | 263,800 |   |              |   | 29.5   | %              |   | $ | 245,540 |   |   |   | 27.7 | % |   | $ | 242,017 |   |   |   | 25.9 | % |
|    Construction |   |           | 29,316  |   |              |   | 3.3    | %              |   |   | 41,869 |   |   |   | 4.7 | % |   |   | 49,026 |   |   |   | 5.2 | % |
|    Other        |   |           | 101,762 |   |              |   | 11.4   | %              |   |   | 101,462 |   |   |   | 11.4 | % |   |   | 121,669 |   |   |   | 13.0 | % |
| Municipal                      |   |           | 20,834  |   |              |   | 2.3    | %              |   |   | 21,833 |   |   |   | 2.5 | % |   |   | 24,203 |   |   |   | 2.6 | % |
| Residential                    |   |           |    |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |           | 340,841 |   |              |   | 38.1   | %              |   |   | 337,927 |   |   |   | 38.1 | % |   |   | 362,459 |   |   |   | 38.8 | % |
|    Construction |   |           | 13,370  |   |              |   | 1.5    | %              |   |   | 15,512 |   |   |   | 1.7 | % |   |   | 17,879 |   |   |   | 1.9 | % |
| Home equity line of credit     |   |           | 106,172 |   |              |   | 11.8   | %              |   |   | 105,297 |   |   |   | 11.9 | % |   |   | 98,241 |   |   |   | 10.5 | % |
| Consumer                       |   |           | 18,589  |   |              |   | 2.1    | %              |   |   | 18,156 |   |   |   | 2.0 | % |   |   | 19,514 |   |   |   | 2.1 | % |
| Total loans                    |   | $              | 894,684 |   |              |   | 100.0  | %              |   | $ | 887,596 |   |   |   | 100.0 | % |   | $ | 935,008 |   |   |   | 100.0 | % |

| In thousands of dollars        |   | < 1 Year |   |   | 1 - 5 Years |   |   | 5 - 10 Years |   |   | > 10 Years |   |   | Total  |    |
|--------------------------------|--------|-------------|--------|--------|-------------|--------|--------|--------------|--------|--------|---------------|--------|--------|--------|---------|
| Commercial                     |   |        |   |   |        |   |   |         |   |   |          |   |   |   |    |
|    Real estate  |   | $           | 6,783  |   |        | $      | 18,743 |         |   | $      | 21,584        |   |   | $      | 216,690 |   |   | $ | 263,800 |   |
|    Construction |   |        | 7,926  |   |        |   | 8,894  |         |   |   | 161           |   |   |   | 12,335  |   |   |   | 29,316 |   |
|    Other        |   |        | 15,035 |   |        |   | 22,799 |         |   |   | 31,020        |   |   |   | 32,908  |   |   |   | 101,762 |   |
| Municipal                      |   |        | 2,710  |   |        |   | 2,840  |         |   |   | 8,666         |   |   |   | 6,618   |   |   |   | 20,834 |   |
| Residential                    |   |        |   |   |        |   |   |         |   |   |          |   |   |   |    |   |   |   |   |   |
|    Term         |   |        | 3,452  |   |        |   | 11,888 |         |   |   | 23,144        |   |   |   | 302,357 |   |   |   | 340,841 |   |
|    Construction |   |        | 4,800  |   |        |   | 1,689  |         |   |   | 301           |   |   |   | 6,580   |   |   |   | 13,370 |   |
| Home equity line of credit     |   |        | 1,426  |   |        |   | 1,962  |         |   |   | 474           |   |   |   | 102,310 |   |   |   | 106,172 |   |
| Consumer                       |   |        | 6,314  |   |        |   | 7,218  |         |   |   | 1,287         |   |   |   | 3,770   |   |   |   | 18,589 |   |
| Total loans                    |   | $           | 48,446 |   |        | $      | 76,033 |         |   | $      | 86,637        |   |   | $      | 683,568 |   |   | $ | 894,684 |   |

----

|                           |   | Fixed-Rate |    |   | Adjustable-Rate |   |   | Total  |   |
|--------------------------------|--------|------------|---------|--------|-----------------|--------|--------|--------|--------|
| Dollars in thousands           |   | Amount     |    |   | % of total      |   |   | Amount |   |   | % of total |   |   | Amount |   |   | % of total |   |
| Commercial                     |   |       |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Real estate  |   | $          | 48,702  |   |            |   | 5.4    | %      |   | $ | 215,098 |   |   |   | 24.1 | % |   | $ | 263,800 |   |   |   | 29.5 | % |
|    Construction |   |       | 243     |   |            |   | 0.0    | %      |   |   | 29,073 |   |   |   | 3.3 | % |   |   | 29,316 |   |   |   | 3.3 | % |
|    Other        |   |       | 41,606  |   |            |   | 4.7    | %      |   |   | 60,156 |   |   |   | 6.7 | % |   |   | 101,762 |   |   |   | 11.4 | % |
| Municipal                      |   |       | 20,793  |   |            |   | 2.3    | %      |   |   | 41 |   |   |   | 0.0 | % |   |   | 20,834 |   |   |   | 2.3 | % |
| Residential                    |   |       |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |       | 121,334 |   |            |   | 13.6   | %      |   |   | 219,507 |   |   |   | 24.5 | % |   |   | 340,841 |   |   |   | 38.1 | % |
|    Construction |   |       | 3,629   |   |            |   | 0.4    | %      |   |   | 9,741 |   |   |   | 1.1 | % |   |   | 13,370 |   |   |   | 1.5 | % |
| Home equity line of credit     |   |       | 3,831   |   |            |   | 0.4    | %      |   |   | 102,341 |   |   |   | 11.4 | % |   |   | 106,172 |   |   |   | 11.8 | % |
| Consumer                       |   |       | 15,150  |   |            |   | 1.7    | %      |   |   | 3,439 |   |   |   | 0.4 | % |   |   | 18,589 |   |   |   | 2.1 | % |
| Total loans                    |   | $          | 255,288 |   |            |   | 28.5   | %      |   | $ | 639,396 |   |   |   | 71.5 | % |   | $ | 894,684 |   |   |   | 100.0 | % |

----

----

| Dollars in thousands           |   | March 31, 2011 |   |   | December 31, 2010 |   |   | March 31, 2010 |   |
|--------------------------------|--------|----------------|--------|--------|-------------------|--------|--------|----------------|--------|
| Commercial                     |   |           |   |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |
|    Real estate  |   | $              | 6,310  |   |              |   | 29.5   | %              |   | $ | 5,260 |   |   |   | 27.7 | % |   | $ | 5,002 |   |   |   | 25.9 | % |
|    Construction |   |           | 639    |   |              |   | 3.3    | %              |   |   | 1,012 |   |   |   | 4.7 | % |   |   | 925 |   |   |   | 5.2 | % |
|    Other        |   |           | 2,535  |   |              |   | 11.4   | %              |   |   | 2,377 |   |   |   | 11.4 | % |   |   | 3,109 |   |   |   | 13.0 | % |
| Municipal                      |   |           | 19     |   |              |   | 2.3    | %              |   |   | 19 |   |   |   | 2.5 | % |   |   | 21 |   |   |   | 2.6 | % |
| Residential                    |   |           |   |   |              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |           | 1,405  |   |              |   | 38.1   | %              |   |   | 1,408 |   |   |   | 38.1 | % |   |   | 1,249 |   |   |   | 38.8 | % |
|    Construction |   |           | 146    |   |              |   | 1.5    | %              |   |   | 44 |   |   |   | 1.7 | % |   |   | 487 |   |   |   | 1.9 | % |
| Home equity line of credit     |   |           | 678    |   |              |   | 11.8   | %              |   |   | 670 |   |   |   | 11.9 | % |   |   | 492 |   |   |   | 10.5 | % |
| Consumer                       |   |           | 713    |   |              |   | 2.1    | %              |   |   | 646 |   |   |   | 2.0 | % |   |   | 656 |   |   |   | 2.1 | % |
| Unallocated                    |   |           | 1,555  |   |              |   | 0.0    | %              |   |   | 1,880 |   |   |   | 0.0 | % |   |   | 2,342 |   |   |   | 0.0 | % |
| Total                          |   | $              | 14,000 |   |              |   | 100.0  | %              |   | $ | 13,316 |   |   |   | 100.0 | % |   | $ | 14,283 |   |   |   | 100.0 | % |

----

|                           |   | Specific Reserves Evaluated Individually for Impairment |      |   | General Reserves Based on Historical Loss Experience |   |      | Reserves for Qualitative Factors |   |   | UnallocatedReserves |   |   | Total Reserves |      |
|--------------------------------|--------|---------------------------------------------------------|-----------|--------|------------------------------------------------------|--------|-----------|----------------------------------|--------|--------|---------------------|--------|--------|----------------|-----------|
| Commercial                     |   |                                                    |      |   |                                                 |   |      |                             |   |   |                |   |   |           |      |
|    Real estate  |   | $                                                       | 593,000   |   |                                                 | $      | 2,536,000 |                             |   | $      | 3,181,000           |   |   | $              | -         |   |   | $ | 6,310,000 |   |
|    Construction |   |                                                    | -         |   |                                                 |   | 284,000   |                             |   |   | 355,000             |   |   |           | -         |   |   |   | 639,000 |   |
|    Other        |   |                                                    | 326,000   |   |                                                 |   | 980,000   |                             |   |   | 1,229,000           |   |   |           | -         |   |   |   | 2,535,000 |   |
| Municipal                      |   |                                                    | -         |   |                                                 |   | -         |                             |   |   | 19,000              |   |   |           | -         |   |   |   | 19,000 |   |
| Residential                    |   |                                                    |      |   |                                                 |   |      |                             |   |   |                |   |   |           |      |   |   |   |   |   |
|    Term         |   |                                                    | 381,000   |   |                                                 |   | 457,000   |                             |   |   | 567,000             |   |   |           | -         |   |   |   | 1,405,000 |   |
|    Construction |   |                                                    | 106,000   |   |                                                 |   | 18,000    |                             |   |   | 22,000              |   |   |           | -         |   |   |   | 146,000 |   |
| Home equity line of credit     |   |                                                    | 139,000   |   |                                                 |   | 67,000    |                             |   |   | 472,000             |   |   |           | -         |   |   |   | 678,000 |   |
| Consumer                       |   |                                                    | 76,000    |   |                                                 |   | 380,000   |                             |   |   | 257,000             |   |   |           | -         |   |   |   | 713,000 |   |
| Unallocated                    |   |                                                    | -         |   |                                                 |   | -         |                             |   |   | -                   |   |   |           | 1,555,000 |   |   |   | 1,555,000 |   |
|                           |   | $                                                       | 1,621,000 |   |                                                 | $      | 4,722,000 |                             |   | $      | 6,102,000           |   |   | $              | 1,555,000 |   |   | $ | 14,000,000 |   |

----

| Dollars in thousands                                          |   | March 31, 2011 |   |   | December 31,2010 |   |   | March 31, 2010 |   |
|---------------------------------------------------------------|--------|----------------|--------|--------|------------------|--------|--------|----------------|--------|
| Balance at beginning of year                                  |   | $              | 13,316 |   |             | $      | 13,637 |           |   | $ | 13,637 |   |
| Loans charged off:                                            |   |           |   |   |             |   |   |           |   |   |   |   |
| Commercial                                                    |   |           |   |   |             |   |   |           |   |   |   |   |
|    Real estate                                 |   |           | 289    |   |             |   | 4,005  |           |   |   | 779 |   |
|    Construction                                |   |           | -      |   |             |   | 175    |           |   |   | 175 |   |
|    Other                                       |   |           | 161    |   |             |   | 1,125  |           |   |   | 316 |   |
| Municipal                                                     |   |           | -      |   |             |   | -      |           |   |   | - |   |
| Residential                                                   |   |           |   |   |             |   |   |           |   |   |   |   |
|    Term                                        |   |           | 457    |   |             |   | 392    |           |   |   | 271 |   |
|    Construction                                |   |           | 505    |   |             |   | 2,361  |           |   |   | - |   |
| Home equity line of credit                                    |   |           | 1      |   |             |   | 8      |           |   |   | - |   |
| Consumer                                                      |   |           | 100    |   |             |   | 951    |           |   |   | 316 |   |
| Total                                                         |   |           | 1,513  |   |             |   | 9,017  |           |   |   | 1,857 |   |
| Recoveries on loans previously charged off                    |   |           |   |   |             |   |   |           |   |   |   |   |
| Commercial                                                    |   |           |   |   |             |   |   |           |   |   |   |   |
|    Real estate                                 |   |           | 5      |   |             |   | 4      |           |   |   | - |   |
|    Construction                                |   |           | -      |   |             |   | -      |           |   |   | - |   |
|    Other                                       |   |           | 17     |   |             |   | 69     |           |   |   | 22 |   |
| Municipal                                                     |   |           | -      |   |             |   | -      |           |   |   | - |   |
| Residential                                                   |   |           |   |   |             |   |   |           |   |   |   |   |
|    Term                                        |   |           | 3      |   |             |   | 4      |           |   |   | 1 |   |
|    Construction                                |   |           | -      |   |             |   | -      |           |   |   | - |   |
| Home equity line of credit                                    |   |           | -      |   |             |   | -      |           |   |   | - |   |
| Consumer                                                      |   |           | 72     |   |             |   | 219    |           |   |   | 80 |   |
| Total                                                         |   |           | 97     |   |             |   | 296    |           |   |   | 103 |   |
| Net loans charged off                                         |   |           | 1,416  |   |             |   | 8,721  |           |   |   | 1,754 |   |
| Provision for loan losses                                     |   |           | 2,100  |   |             |   | 8,400  |           |   |   | 2,400 |   |
| Balance at end of period                                      |   | $              | 14,000 |   |             | $      | 13,316 |           |   | $ | 14,283 |   |
| Ratio of net loans charged off to average loans outstanding1  |   |           | 0.64   | %      |             |   | 0.94   | %              |   |   | 0.76 | % |
| Ratio of allowance for loan losses to total loans outstanding |   |           | 1.56   | %      |             |   | 1.50   | %              |   |   | 1.53 | % |

----

| In thousands of dollars                      |   | March 31, 2011 |   |   | December 31, 2010 |   |   | March 31, 2010 |   |
|----------------------------------------------|--------|----------------|--------|--------|-------------------|--------|--------|----------------|--------|
| Commercial                                   |   |           |   |   |              |   |   |           |   |
|    Real estate                |   | $              | 7,752  |   |              | $      | 5,946  |           |   | $ | 7,345 |   |
|    Construction               |   |           | 813    |   |              |   | 937    |           |   |   | 459 |   |
|    Other                      |   |           | 1,617  |   |              |   | 2,277  |           |   |   | 2,901 |   |
| Municipal                                    |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Residential                                  |   |           |   |   |              |   |   |           |   |   |   |   |
|    Term                       |   |           | 9,632  |   |              |   | 8,932  |           |   |   | 8,907 |   |
|    Construction               |   |           | 2,247  |   |              |   | 3,567  |           |   |   | 3,176 |   |
| Home equity line of credit                   |   |           | 604    |   |              |   | 519    |           |   |   | 161 |   |
| Consumer                                     |   |           | 124    |   |              |   | 113    |           |   |   | 85 |   |
| Total loans 90 or more days past due         |   | $              | 22,789 |   |              | $      | 22,291 |           |   | $ | 23,034 |   |
| Non-performing loans included in above total |   | $              | 22,498 |   |              | $      | 21,175 |           |   | $ | 23,018 |   |

| ·   | The borrower demonstrates financial difficulty; common indicators include past due status with bank obligations, substandard credit bureau reports, or an inability to refinance with another lender, and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Bank has granted a concession; common concession types include maturity date extension, interest rate adjustments to below market pricing, and deferment of payments. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Dollars in thousands           |   | March 31, 2011 |   |   | December 31, 2010 |   |   | March 31, 2010 |   |
|--------------------------------|--------|----------------|--------|--------|-------------------|--------|--------|----------------|--------|
| Commercial                     |   |           |   |   |              |   |   |           |   |
|    Real estate  |   | $              | 7,482  |   |              | $      | 5,946  |           |   | $ | 7,344 |   |
|    Construction |   |           | 813    |   |              |   | 937    |           |   |   | 459 |   |
|    Other        |   |           | 1,604  |   |              |   | 1,753  |           |   |   | 2,901 |   |
| Municipal                      |   |           | -      |   |              |   | -      |           |   |   |   |   |
| Residential                    |   |           |   |   |              |   |   |           |   |   |   |   |
|    Term         |   |           | 13,948 |   |              |   | 12,455 |           |   |   | 11,976 |   |
|    Construction |   |           | 2,248  |   |              |   | 3,567  |           |   |   | 3,176 |   |
| Home equity line of credit     |   |           | 604    |   |              |   | 519    |           |   |   | 161 |   |
| Consumer                       |   |           | 115    |   |              |   | 106    |           |   |   | 69 |   |
| Total                          |   | $              | 26,814 |   |              | $      | 25,283 |           |   | $ | 26,086 |   |

----

| Dollars in thousands                                  |   | March 31, 2011 |   |   | December 31, 2010 |   |   | March 31, 2010 |   |
|-------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|--------|----------------|--------|
| Commercial                                            |   |           |   |   |              |   |   |           |   |
|    Real estate                         |   | $              | 7,113  |   |              | $      | 6,055  |           |   | $ | 8,862 |   |
|    Construction                        |   |           | 321    |   |              |   | 1,057  |           |   |   | 459 |   |
|    Other                               |   |           | 1,421  |   |              |   | 4,440  |           |   |   | 2,087 |   |
| Municipal                                             |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Residential                                           |   |           |   |   |              |   |   |           |   |   |   |   |
|    Term                                |   |           | 14,079 |   |              |   | 12,231 |           |   |   | 12,268 |   |
|    Construction                        |   |           | 2,247  |   |              |   | 1,828  |           |   |   | 1,845 |   |
| Home equity line of credit                            |   |           | 1,363  |   |              |   | 2,038  |           |   |   | 574 |   |
| Consumer                                              |   |           | 269    |   |              |   | 266    |           |   |   | 768 |   |
| Total                                                 |   | $              | 26,813 |   |              | $      | 27,915 |           |   | $ | 26,863 |   |
| Loans 30-89 days past due to total loans              |   |           | 0.90   | %      |              |   | 1.32   | %              |   |   | 0.90 | % |
| Loans 90+ days past due and accruing to total loans   |   |           | 0.03   | %      |              |   | 0.13   | %              |   |   | 0.00 | % |
| Loans 90+ days past due on non-accrual to total loans |   |           | 2.06   | %      |              |   | 1.70   | %              |   |   | 1.97 | % |
| Total past due loans to total loans                   |   |           | 3.00   | %      |              |   | 3.15   | %              |   |   | 2.87 | % |

----

| In thousands of dollars        |   | March 31, 2011 |   |   | December 31, 2010 |   |   | March 31, 2010 |   |
|--------------------------------|--------|----------------|--------|--------|-------------------|--------|--------|----------------|--------|
| Carrying Value                 |   |           |   |   |              |   |   |           |   |
| Commercial                     |   |           |   |   |              |   |   |           |   |
|    Real estate  |   | $              | -      |   |              | $      | -      |           |   | $ | - |   |
|    Construction |   |           | 452    |   |              |   | 424    |           |   |   | 1,232 |   |
|    Other        |   |           | 1,559  |   |              |   | 1,795  |           |   |   | 2,661 |   |
| Municipal                      |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Residential                    |   |           |   |   |              |   |   |           |   |   |   |   |
|    Term         |   |           | 2,672  |   |              |   | 2,842  |           |   |   | 3,129 |   |
|    Construction |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Home equity line of credit     |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Consumer                       |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Total                          |   | $              | 4,683  |   |              | $      | 5,061  |           |   | $ | 7,022 |   |
| Related Allowance              |   |           |   |   |              |   |   |           |   |   |   |   |
| Commercial                     |   |           |   |   |              |   |   |           |   |   |   |   |
|    Real estate  |   | $              | -      |   |              | $      | -      |           |   | $ | - |   |
|    Construction |   |           | -      |   |              |   | -      |           |   |   | 460 |   |
|    Other        |   |           | 20     |   |              |   | 66     |           |   |   | 35 |   |
| Municipal                      |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Residential                    |   |           |   |   |              |   |   |           |   |   |   |   |
|    Term         |   |           | 88     |   |              |   | 66     |           |   |   | 176 |   |
|    Construction |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Home equity line of credit     |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Consumer                       |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Total                          |   | $              | 108    |   |              | $      | 132    |           |   | $ | 671 |   |
| Net Value                      |   |           |   |   |              |   |   |           |   |   |   |   |
| Commercial                     |   |           |   |   |              |   |   |           |   |   |   |   |
|    Real estate  |   | $              | -      |   |              | $      | -      |           |   | $ | - |   |
|    Construction |   |           | 452    |   |              |   | 424    |           |   |   | 772 |   |
|    Other        |   |           | 1,539  |   |              |   | 1,729  |           |   |   | 2,626 |   |
| Municipal                      |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Residential                    |   |           |   |   |              |   |   |           |   |   |   |   |
|    Term         |   |           | 2,584  |   |              |   | 2,776  |           |   |   | 2,953 |   |
|    Construction |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Home equity line of credit     |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Consumer                       |   |           | -      |   |              |   | -      |           |   |   | - |   |
| Total                          |   | $              | 4,575  |   |              | $      | 4,929  |           |   | $ | 6,351 |   |

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| Dollars in thousands                                    |   | Total  |    |   | Less than1 year |   |    | 1-3 years |   |   | 3-5 years |   |   | More than 5 years |    |
|---------------------------------------------------------|--------|--------|---------|--------|-----------------|--------|---------|-----------|--------|--------|-----------|--------|--------|-------------------|---------|
|  Borrowed funds                                    |   | $      | 217,534 |   |            | $      | 87,366  |      |   | $      | 20,000    |   |   | $                 | 60,000  |   |   | $ | 50,168 |   |
|  Operating leases                                  |   |   | 625     |   |            |   | 140     |      |   |   | 180       |   |   |              | 111     |   |   |   | 194 |   |
|  Certificates of deposit                           |   |   | 680,585 |   |            |   | 458,574 |      |   |   | 76,084    |   |   |              | 145,927 |   |   |   | - |   |
|  Total                                             |   | $      | 898,744 |   |            | $      | 546,080 |      |   | $      | 96,264    |   |   | $                 | 206,038 |   |   | $ | 50,362 |   |
|  Total loan commitments and unused lines of credit |   | $      | 91,695  |   |            | $      | 91,695  |      |   | $      | -         |   |   | $                 | -       |   |   | $ | - |   |

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|                                                  |   |   | 0-90    |   |   |   | 90-365  |   |   |   | 1-5     |   |   |   | 5        | +      |
|-------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|----------|--------|
| Dollars in thousands                             |   | Days   |    |   | Days   |   |    | Years  |   |   | Years   |   |
| Investment securities at amortized cost               |   | $      | 15,157  |   |   | $      | 35,318  |   |   | $      | 152,015 |   |   | $      | 234,309  |   |
| Federal Home Loan Bank and Federal Reserve Bank Stock |   |   | -       |   |   |   | -       |   |   |   | 14,031  |   |   |   | 1,412    |   |
| Loans held for sale                                   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 450      |   |
| Loans                                                 |   |   | 454,916 |   |   |   | 148,505 |   |   |   | 247,613 |   |   |   | 43,650   |   |
| Other interest-earning assets                         |   |   | -       |   |   |   | 10,029  |   |   |   | -       |   |   |   | -        |   |
| Non-rate-sensitive assets                             |   |   | 6,436   |   |   |   | -       |   |   |   | -       |   |   |   | 67,197   |   |
|  Total assets                                    |   |   | 476,509 |   |   |   | 193,852 |   |   |   | 413,659 |   |   |   | 347,018  |   |
| Interest-bearing deposits                             |   |   | 349,027 |   |   |   | 198,350 |   |   |   | 207,436 |   |   |   | 227,942  |   |
| Borrowed funds                                        |   |   | 87,324  |   |   |   | 9       |   |   |   | 79,927  |   |   |   | 50,274   |   |
| Non-rate-sensitive liabilities and equity             |   |   | 1,850   |   |   |   | 5,850   |   |   |   | 38,800  |   |   |   | 184,249  |   |
|  Total liabilities and equity                    |   |   | 438,201 |   |   |   | 204,209 |   |   |   | 326,163 |   |   |   | 462,465  |   |
| Period gap                                            |   | $      | 38,308  |   |   | $      | (10,357 | )      |   | $      | 87,496  |   |   | $      | (115,447 | )      |
| Percent of total assets                               |   |   | 2.68    | %      |   |   | -0.72   | %      |   |   | 6.11    | %      |   |   | -8.07    | %      |
| Cumulative gap (current)                              |   |   | 38,308  |   |   |   | 27,951  |   |   |   | 115,447 |   |   |   | -        |   |
| Percent of total assets                               |   |   | 2.68    | %      |   |   | 1.95    | %      |   |   | 8.07    | %      |   |   | 0.00     | %      |

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| Changes in Net Interest Income             | March 31, 2011 | December 31, 2010 |
|--------------------------------------------|----------------|-------------------|
| Year 1                                     |           |              |
| Projected change if rates decrease by 1.0% | -0.20%         | 0.60%             |
| Projected change if rates increase by 2.0% | -1.20%         | -1.50%            |
| Year 2                                     |           |              |
| Projected change if rates decrease by 1.0% | -3.30%         | -2.20%            |
| Projected change if rates increase by 2.0% | -4.80%         | -4.70%            |

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