| 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 and Comprehewnsive 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                                                                                 | 11 |
| Note 4 - Allowance for Loan Losses                                                             | 17 |
| Note 5 - Stock Options and Stock and Stock Based Compensation                                  | 25 |
| Note 6 - Preferred and Common Stock                                                            | 26 |
| Note 7 - Earnings Per Share                                                                    | 27 |
| Note 8 - Employee Benefit Plans                                                                | 27 |
| Note 9 - Goodwill and Other Intangible Assets                                                  | 29 |
| Note 10 - Mortgage Servicing Rights                                                            | 30 |
| Note 11 - Income Taxes                                                                         | 30 |
| Note 12 - Certificates of Deposit                                                              | 31 |
| Note 13 - Reclassifications                                                                    | 31 |
| Note 14 - Fair Value Disclosures                                                               | 31 |
| Note 15 - Subsequent Event                                                                     | 37 |
| Note 16 - Impact of Recently Issued Accounting Standards                                       | 37 |
| Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations | 38 |
| Forward-Looking Statements                                                                     | 38 |
| Critical Accounting Policies                                                                   | 38 |
| Use of Non-GAAP Financial Measures                                                             | 39 |
| Executive Summary                                                                              | 41 |
| Net Interest Income                                                                            | 42 |
| Average Daily Balance Sheets                                                                   | 45 |
| Non-Interest Income                                                                            | 46 |
| Non-Interest Expense                                                                           | 46 |
| Income Taxes                                                                                   | 46 |
| Investments                                                                                    | 46 |
| Impaired Securities                                                                            | 48 |
| Federal Home Loan Bank Stock                                                                   | 50 |
| Loans and Loans Held for Sale                                                                  | 50 |
| Credit Risk Management and Allowance for Loan Losses                                           | 52 |
| Non-Performing Loans and Troubled Debt Restructured                                            | 56 |
| Impaired Loans                                                                                 | 57 |
| Past Due Loans                                                                                 | 58 |
| Potential Problem Loans and Loans in Process of Foreclosure                                    | 58 |
| Other Real Estate Owned                                                                        | 59 |
| Goodwill                                                                                       | 60 |
| Liquidity Management                                                                           | 60 |
| Deposits                                                                                       | 60 |
| Borrowed Funds                                                                                 | 60 |
| Shareholders' Equity                                                                           | 61 |
| Off-Balance-Sheet Financial Instruments and Contractual Obligations                            | 61 |
| Item 3 - Quantitative and Qualitative Disclosures About Market Risk                            | 62 |
| Market-Risk Management                                                                         | 62 |
| Asset/Liability Management                                                                     | 62 |
| Interest Rate Risk Management                                                                  | 63 |
| Item 4: Controls and Procedures                                                                | 64 |
| Part II - Other Information                                                                    | 65 |
| Item 1 - Legal Proceedings                                                                     | 65 |
| Item 1a - Risk Factors                                                                         | 65 |
| Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds                           | 65 |
| Item 3 - Default Upon Senior Securities                                                        | 65 |
| Item 4 - Other Information                                                                     | 65 |
| Item 5 - Exhibits                                                                              | 66 |
| Signatures                                                                                     | 68 |

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| Dollars in thousands,                      |   | For the six months endedJune 30, |      |   | For the quarters endedJune 30, |   |
|--------------------------------------------|--------|----------------------------------|-----------|--------|--------------------------------|--------|
| except for per share amounts               |   | 2012                             |      |   | 2011                           |   |   | 2012 |   |   | 2011 |   |
|                                       |   |                                  |      |   |                                |   |   |  |   |   |  |   |
| Summary of Operations                      |   |                                  |      |   |                                |   |   |  |   |   |  |   |
| Interest Income                            |   | $                                | 26,239    |   |                           | $      | 28,251 |   |   | $ | 13,133 |   |   | $ | 13,997 |   |
| Interest Expense                           |   |                             | 6,515     |   |                           |   | 7,523 |   |   |   | 3,215 |   |   |   | 3,774 |   |
| Net Interest Income                        |   |                             | 19,724    |   |                           |   | 20,728 |   |   |   | 9,918 |   |   |   | 10,223 |   |
| Provision for Loan Losses                  |   |                             | 4,900     |   |                           |   | 4,100 |   |   |   | 2,800 |   |   |   | 2,000 |   |
| Non-Interest Income                        |   |                             | 6,064     |   |                           |   | 4,511 |   |   |   | 3,896 |   |   |   | 2,234 |   |
| Non-Interest Expense                       |   |                             | 12,908    |   |                           |   | 12,738 |   |   |   | 6,730 |   |   |   | 6,250 |   |
| Net Income                                 |   |                             | 6,236     |   |                           |   | 6,336 |   |   |   | 3,323 |   |   |   | 3,193 |   |
| Per Common Share Data                      |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Basic Earnings per Share                   |   | $                                | 0.60      |   |                           | $      | 0.58 |   |   | $ | 0.32 |   |   | $ | 0.29 |   |
| Diluted Earnings per Share                 |   |                             | 0.60      |   |                           |   | 0.58 |   |   |   | 0.32 |   |   |   | 0.29 |   |
| Cash Dividends Declared                    |   |                             | 0.390     |   |                           |   | 0.390 |   |   |   | 0.195 |   |   |   | 0.195 |   |
| Book Value per Common Share                |   |                             | 14.32     |   |                           |   | 13.42 |   |   |   | 14.32 |   |   |   | 13.42 |   |
| Tangible Book Value per Common Share       |   |                             | 11.51     |   |                           |   | 10.60 |   |   |   | 11.51 |   |   |   | 10.60 |   |
| Market Value                               |   |                             | 17.00     |   |                           |   | 14.86 |   |   |   | 17.00 |   |   |   | 14.86 |   |
| Financial Ratios                           |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Return on Average Equity1                  |   |                             | 8.84      | %      |                           |   | 9.90 | % |   |   | 9.38 | % |   |   | 9.78 | % |
| Return on Average Tangible Equity1,2       |   |                             | 10.35     | %      |                           |   | 11.26 | % |   |   | 11.01 | % |   |   | 11.09 | % |
| Return on Average Assets1                  |   |                             | 0.88      | %      |                           |   | 0.90 | % |   |   | 0.93 | % |   |   | 0.89 | % |
| Average Equity to Average Assets           |   |                             | 10.84     | %      |                           |   | 10.78 | % |   |   | 10.73 | % |   |   | 10.80 | % |
| Average Tangible Equity to Average Assets2 |   |                             | 8.89      | %      |                           |   | 8.84 | % |   |   | 8.81 | % |   |   | 8.88 | % |
| Net Interest Margin Tax-Equivalent1,2      |   |                             | 3.19      | %      |                           |   | 3.31 | % |   |   | 3.16 | % |   |   | 3.22 | % |
| Dividend Payout Ratio                      |   |                             | 65.00     | %      |                           |   | 67.24 | % |   |   | 60.94 | % |   |   | 67.24 | % |
| Allowance for Loan Losses/Total Loans      |   |                             | 1.63      | %      |                           |   | 1.70 | % |   |   | 1.63 | % |   |   | 1.70 | % |
| Non-Performing Loans to Total Loans        |   |                             | 2.49      | %      |                           |   | 2.49 | % |   |   | 2.49 | % |   |   | 2.49 | % |
| Non-Performing Assets to Total Assets      |   |                             | 1.91      | %      |                           |   | 2.10 | % |   |   | 1.91 | % |   |   | 2.10 | % |
| Efficiency Ratio2                          |   |                             | 50.74     | %      |                           |   | 48.29 | % |   |   | 51.06 | % |   |   | 48.30 | % |
| At Period End                              |   |                             |      |   |                           |   |   |   |   |   |   |   |   |   |   |   |
| Total Assets                               |   | $                                | 1,424,757 |   |                           | $      | 1,417,690 |   |   | $ | 1,424,757 |   |   | $ | 1,417,690 |   |
| Total Loans                                |   |                             | 881,814   |   |                           |   | 886,929 |   |   |   | 881,814 |   |   |   | 886,929 |   |
| Total Investment Securities                |   |                             | 457,570   |   |                           |   | 442,691 |   |   |   | 457,570 |   |   |   | 442,691 |   |
| Total Deposits                             |   |                             | 1,005,274 |   |                           |   | 998,838 |   |   |   | 1,005,274 |   |   |   | 998,838 |   |
| Total Shareholders' Equity                 |   |                             | 153,405   |   |                           |   | 156,210 |   |   |   | 153,405 |   |   |   | 156,210 |   |

----

----

|                                                                                                                                                 |  | June 30, 2012 |               |   | December 31, 2011 |   |               | June 30,2011 |  |
|------------------------------------------------------------------------------------------------------------------------------------------------------|--|---------------|---------------|---|-------------------|---|---------------|--------------|--|
| Assets                                                                                                                                               |  |               |               |   |                   |   |               |              |  |
| Cash and cash equivalents                                                                                                                            |  | $             | 14,192,000    |   |                   | $ | 14,115,000    |              |  | $ | 14,322,000 |  |
| Interest bearing deposits in other banks                                                                                                             |  |               | -             |   |                   |   | -             |              |  |  | 100,000 |  |
| Securities available for sale                                                                                                                        |  |               | 307,347,000   |   |                   |   | 286,202,000   |              |  |  | 304,278,000 |  |
| Securities to be held to maturity (fair value of $143,628,000 at June 30, 2012, $130,677,000 at December 31, 2011 and $128,426,000 at June 30, 2011) |  |               | 135,775,000   |   |                   |   | 122,661,000   |              |  |  | 122,970,000 |  |
| Restricted equity securities, at cost                                                                                                                |  |               | 14,448,000    |   |                   |   | 15,443,000    |              |  |  | 15,443,000 |  |
| Loans held for sale                                                                                                                                  |  |               | 378,000       |   |                   |   | -             |              |  |  | 419,000 |  |
| Loans                                                                                                                                                |  |               | 881,814,000   |   |                   |   | 864,988,000   |              |  |  | 886,929,000 |  |
| Less allowance for loan losses                                                                                                                       |  |               | 14,384,000    |   |                   |   | 13,000,000    |              |  |  | 15,034,000 |  |
| Net loans                                                                                                                                            |  |               | 867,430,000   |   |                   |   | 851,988,000   |              |  |  | 871,895,000 |  |
| Accrued interest receivable                                                                                                                          |  |               | 6,024,000     |   |                   |   | 4,835,000     |              |  |  | 6,511,000 |  |
| Premises and equipment, net                                                                                                                          |  |               | 18,500,000    |   |                   |   | 18,842,000    |              |  |  | 18,351,000 |  |
| Other real estate owned                                                                                                                              |  |               | 5,188,000     |   |                   |   | 4,094,000     |              |  |  | 7,723,000 |  |
| Goodwill                                                                                                                                             |  |               | 27,684,000    |   |                   |   | 27,684,000    |              |  |  | 27,684,000 |  |
| Other assets                                                                                                                                         |  |               | 27,791,000    |   |                   |   | 27,003,000    |              |  |  | 27,994,000 |  |
| Total assets                                                                                                                                         |  | $             | 1,424,757,000 |   |                   | $ | 1,372,867,000 |              |  | $ | 1,417,690,000 |  |
| Liabilities                                                                                                                                          |  |               |               |   |                   |   |               |              |  |  |  |  |
| Demand deposits                                                                                                                                      |  | $             | 77,019,000    |   |                   | $ | 75,750,000    |              |  | $ | 71,517,000 |  |
| NOW deposits                                                                                                                                         |  |               | 123,897,000   |   |                   |   | 122,775,000   |              |  |  | 117,064,000 |  |
| Money market deposits                                                                                                                                |  |               | 71,009,000    |   |                   |   | 79,015,000    |              |  |  | 69,681,000 |  |
| Savings deposits                                                                                                                                     |  |               | 119,471,000   |   |                   |   | 114,617,000   |              |  |  | 107,278,000 |  |
| Certificates of deposit                                                                                                                              |  |               | 613,878,000   |   |                   |   | 549,176,000   |              |  |  | 633,298,000 |  |
| Total deposits                                                                                                                                       |  |               | 1,005,274,000 |   |                   |   | 941,333,000   |              |  |  | 998,838,000 |  |
| Borrowed funds - short term                                                                                                                          |  |               | 118,767,000   |   |                   |   | 135,500,000   |              |  |  | 119,170,000 |  |
| Borrowed funds - long term                                                                                                                           |  |               | 130,159,000   |   |                   |   | 130,163,000   |              |  |  | 130,166,000 |  |
| Other liabilities                                                                                                                                    |  |               | 17,152,000    |   |                   |   | 15,013,000    |              |  |  | 13,306,000 |  |
| Total liabilities                                                                                                                                    |  |               | 1,271,352,000 |   |                   |   | 1,222,009,000 |              |  |  | 1,261,480,000 |  |
| Shareholders' equity                                                                                                                                 |  |               |               |   |                   |   |               |              |  |  |  |  |
| Preferred stock, $1,000 preference value per share                                                                                                   |  |               | 12,352,000    |   |                   |   | 12,303,000    |              |  |  | 24,754,000 |  |
| Common stock, one cent par value per share                                                                                                           |  |               | 98,000        |   |                   |   | 98,000        |              |  |  | 98,000 |  |
| Additional paid-in capital                                                                                                                           |  |               | 46,110,000    |   |                   |   | 45,829,000    |              |  |  | 45,629,000 |  |
| Retained earnings                                                                                                                                    |  |               | 87,396,000    |   |                   |   | 85,314,000    |              |  |  | 83,594,000 |  |
| Accumulated other comprehensive income (loss)                                                                                                        |  |               |               |   |                   |   |               |              |  |  |  |  |
|   Net unrealized gain on securities available-for-sale                                                                                     |  |               | 7,526,000     |   |                   |   | 7,401,000     |              |  |  | 2,198,000 |  |
|   Net unrealized loss on postretirement benefit costs                                                                                      |  |               | (77,000       | ) |                   |   | (87,000       | )            |  |  | (63,000 | ) |
| Total shareholders' equity                                                                                                                           |  |               | 153,405,000   |   |                   |   | 150,858,000   |              |  |  | 156,210,000 |  |
| Total liabilities & shareholders' equity                                                                                                         |  | $             | 1,424,757,000 |   |                   | $ | 1,372,867,000 |              |  | $ | 1,417,690,000 |  |
| Common Stock                                                                                                                                         |  |               |               |   |                   |   |               |              |  |  |  |  |
| Number of shares authorized                                                                                                                          |  |               | 18,000,000    |   |                   |   | 18,000,000    |              |  |  | 18,000,000 |  |
| Number of shares issued and outstanding                                                                                                              |  |               | 9,847,159     |   |                   |   | 9,812,180     |              |  |  | 9,793,706 |  |
| Book value per common share                                                                                                                          |  | $             | 14.32         |   |                   | $ | 14.12         |              |  | $ | 13.42 |  |
| Tangible book value per common share                                                                                                                 |  | $             | 11.51         |   |                   | $ | 11.30         |              |  | $ | 10.60 |  |

----

|                                                           |  | For the six months endedJune 30, |            |  | For the quarters endedJune 30, |   |
|----------------------------------------------------------------|--|----------------------------------|------------|--|--------------------------------|---|
|                                                           |  | 2012                             |            |  | 2011                           |   |  | 2012 |  |  | 2011 |  |
| Interest income                                                |  |                                  |            |  |                                |   |  |  |  |  |  |  |
| Interest and fees on loans                                     |  | $                                | 18,759,000 |  |                                | $ | 20,128,000 |  |  | $ | 9,367,000 |  |  | $ | 9,955,000 |  |
| Interest on deposits with other banks                          |  |                                  | 1,000      |  |                                |   | - |  |  |  | 1,000 |  |  |  | - |  |
| Interest and dividends on investments                          |  |                                  | 7,479,000  |  |                                |   | 8,123,000 |  |  |  | 3,765,000 |  |  |  | 4,042,000 |  |
|      Total interest income            |  |                                  | 26,239,000 |  |                                |   | 28,251,000 |  |  |  | 13,133,000 |  |  |  | 13,997,000 |  |
| Interest expense                                               |  |                                  |            |  |                                |   |  |  |  |  |  |  |  |  |  |  |
| Interest on deposits                                           |  |                                  | 4,297,000  |  |                                |   | 5,081,000 |  |  |  | 2,104,000 |  |  |  | 2,518,000 |  |
| Interest on borrowed funds                                     |  |                                  | 2,218,000  |  |                                |   | 2,442,000 |  |  |  | 1,111,000 |  |  |  | 1,256,000 |  |
|      Total interest expense           |  |                                  | 6,515,000  |  |                                |   | 7,523,000 |  |  |  | 3,215,000 |  |  |  | 3,774,000 |  |
| Net interest income                                            |  |                                  | 19,724,000 |  |                                |   | 20,728,000 |  |  |  | 9,918,000 |  |  |  | 10,223,000 |  |
| Provision for loan losses                                      |  |                                  | 4,900,000  |  |                                |   | 4,100,000 |  |  |  | 2,800,000 |  |  |  | 2,000,000 |  |
| Net interest income after provision for loan losses            |  |                                  | 14,824,000 |  |                                |   | 16,628,000 |  |  |  | 7,118,000 |  |  |  | 8,223,000 |  |
| Non-interest income                                            |  |                                  |            |  |                                |   |  |  |  |  |  |  |  |  |  |  |
| Investment management and fiduciary income                     |  |                                  | 844,000    |  |                                |   | 782,000 |  |  |  | 448,000 |  |  |  | 358,000 |  |
| Service charges on deposit accounts                            |  |                                  | 1,351,000  |  |                                |   | 1,351,000 |  |  |  | 713,000 |  |  |  | 711,000 |  |
| Net securities gains                                           |  |                                  | 1,967,000  |  |                                |   | 229,000 |  |  |  | 1,444,000 |  |  |  | 229,000 |  |
| Mortgage origination and servicing income                      |  |                                  | 304,000    |  |                                |   | 652,000 |  |  |  | 460,000 |  |  |  | 193,000 |  |
| Other operating income                                         |  |                                  | 1,598,000  |  |                                |   | 1,497,000 |  |  |  | 831,000 |  |  |  | 743,000 |  |
|      Total non-interest income        |  |                                  | 6,064,000  |  |                                |   | 4,511,000 |  |  |  | 3,896,000 |  |  |  | 2,234,000 |  |
| Non-interest expense                                           |  |                                  |            |  |                                |   |  |  |  |  |  |  |  |  |  |  |
| Salaries and employee benefits                                 |  |                                  | 6,202,000  |  |                                |   | 6,005,000 |  |  |  | 3,118,000 |  |  |  | 2,928,000 |  |
| Occupancy expense                                              |  |                                  | 819,000    |  |                                |   | 827,000 |  |  |  | 405,000 |  |  |  | 378,000 |  |
| Furniture and equipment expense                                |  |                                  | 1,123,000  |  |                                |   | 1,111,000 |  |  |  | 550,000 |  |  |  | 561,000 |  |
| FDIC insurance premiums                                        |  |                                  | 606,000    |  |                                |   | 806,000 |  |  |  | 305,000 |  |  |  | 405,000 |  |
| Amortization of identified intangibles                         |  |                                  | 141,000    |  |                                |   | 141,000 |  |  |  | 70,000 |  |  |  | 70,000 |  |
| Other operating expense                                        |  |                                  | 4,017,000  |  |                                |   | 3,848,000 |  |  |  | 2,282,000 |  |  |  | 1,908,000 |  |
|      Total non-interest expense       |  |                                  | 12,908,000 |  |                                |   | 12,738,000 |  |  |  | 6,730,000 |  |  |  | 6,250,000 |  |
| Income before income taxes                                     |  |                                  | 7,980,000  |  |                                |   | 8,401,000 |  |  |  | 4,284,000 |  |  |  | 4,207,000 |  |
| Applicable income taxes                                        |  |                                  | 1,744,000  |  |                                |   | 2,065,000 |  |  |  | 961,000 |  |  |  | 1,014,000 |  |
| NET INCOME                                                     |  | $                                | 6,236,000  |  |                                | $ | 6,336,000 |  |  | $ | 3,323,000 |  |  | $ | 3,193,000 |  |
| Basic earnings per common share                                |  | $                                | 0.60       |  |                                | $ | 0.58 |  |  | $ | 0.32 |  |  | $ | 0.29 |  |
| Diluted earnings per common share                              |  | $                                | 0.60       |  |                                | $ | 0.58 |  |  | $ | 0.32 |  |  | $ | 0.29 |  |
| Other comprehensive income, net of tax                         |  |                                  |            |  |                                |   |  |  |  |  |  |  |  |  |  |  |
| Net unrealized gain on securities available for sale           |  | $                                | 125,000    |  |                                | $ | 4,255,000 |  |  | $ | 438,000 |  |  | $ | 3,587,000 |  |
| Unrecognized postretirement benefits transition obligation     |  |                                  | 10,000     |  |                                |   | 10,000 |  |  |  | 5,000 |  |  |  | 5,000 |  |
|       Other comprehensive income |  | $                                | 135,000    |  |                                | $ | 4,265,000 |  |  | $ | 443,000 |  |  | $ | 3,592,000 |  |
| Comprehensive income                                           |  | $                                | 6,371,000  |  |                                | $ | 10,601,000 |  |  | $ | 3,766,000 |  |  | $ | 6,785,000 |  |

----

|                                                                                   |   |           |       |   |                            |   |      |          |   |   |               |   |   | 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, 2010                                                           |   | $         | 24,705,000 |   |                       |   | 9,773,025 |     |   | $      | 45,572,000    |   |   | $             | 81,701,000 |   |   | $      | (2,130,000 | ) |   | $ | 149,848,000 |   |
| Net income                                                                             |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 6,336,000  |   |   |   | - |   |   |   | 6,336,000 |   |
| Net unrealized gain on securities available for sale, net of taxes of $2,291,000       |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 4,255,000 |   |   |   | 4,255,000 |   |
| Unrecognized transition obligation for postretirement benefits, net of taxes of $4,000 |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 10,000 |   |   |   | 10,000 |   |
| Comprehensive income                                                                   |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 6,336,000  |   |   |   | 4,265,000 |   |   |   | 10,601,000 |   |
| Cash dividends declared                                                                |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | (4,443,000 | )      |   |   | - |   |   |   | (4,443,000 | ) |
| Equity compensation expense                                                            |   |      | -          |   |                       |   | -         |     |   |   | 11,000        |   |   |          | -          |   |   |   | - |   |   |   | 11,000 |   |
| Amortization of premium for preferred stock issuance                                   |   |      | 49,000     |   |                       |   | -         |     |   |   | (49,000       | )      |   |          | -          |   |   |   | - |   |   |   | - |   |
| Proceeds from sale of common stock                                                     |   |      | -          |   |                       |   | 20,681    |     |   |   | 193,000       |   |   |          | -          |   |   |   | - |   |   |   | 193,000 |   |
| Balance at June 30, 2011                                                               |   | $         | 24,754,000 |   |                       |   | 9,793,706 |     |   | $      | 45,727,000    |   |   | $             | 83,594,000 |   |   | $      | 2,135,000 |   |   | $ | 156,210,000 |   |
|                                                                                   |   |      |       |   |                       |   |      |     |   |   |          |   |   |          |       |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2011                                                           |   | $         | 12,303,000 |   |                       |   | 9,812,180 |     |   | $      | 45,927,000    |   |   | $             | 85,314,000 |   |   | $      | 7,314,000 |   |   | $ | 150,858,000 |   |
| Net income                                                                             |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 6,236,000  |   |   |   | - |   |   |   | 6,236,000 |   |
| Net unrealized gain on securities available for sale, net of taxes of $67,000          |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 125,000 |   |   |   | 125,000 |   |
| Unrecognized transition obligation for postretirement benefits, net of taxes of $4,000 |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | -          |   |   |   | 10,000 |   |   |   | 10,000 |   |
| Comprehensive income                                                                   |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | 6,236,000  |   |   |   | 135,000 |   |   |   | 6,371,000 |   |
| Cash dividends declared                                                                |   |      | -          |   |                       |   | -         |     |   |   | -             |   |   |          | (4,154,000 | )      |   |   | - |   |   |   | (4,154,000 | ) |
| Equity compensation expense                                                            |   |      | -          |   |                       |   | -         |     |   |   | 40,000        |   |   |          | -          |   |   |   | - |   |   |   | 40,000 |   |
| Amortization of premium for preferred stock issuance                                   |   |      | 49,000     |   |                       |   | -         |     |   |   | (49,000       | )      |   |          | -          |   |   |   | - |   |   |   | - |   |
| Proceeds from sale of common stock                                                     |   |      | -          |   |                       |   | 34,979    |     |   |   | 290,000       |   |   |          | -          |   |   |   | - |   |   |   | 290,000 |   |
| Balance at June 30, 2012                                                               |   | $         | 12,352,000 |   |                       |   | 9,847,159 |     |   | $      | 46,208,000    |   |   | $             | 87,396,000 |   |   | $      | 7,449,000 |   |   | $ | 153,405,000 |   |

----

|                                                                              |   | For the six months ended |        |
|-----------------------------------------------------------------------------------|--------|--------------------------|-------------|
|                                                                              |   | June 30, 2012            |        |   | June 30, 2011 |   |
| Cash flows from operating activities                                              |   |                          |        |   |  |   |
|      Net income                                          |   | $                        | 6,236,000   |   |   | $ | 6,336,000 |   |
| Adjustments to reconcile net income to net cash provided by operating activities  |   |                     |        |   |   |
| Depreciation                                                                      |   |                     | 663,000     |   |   |   | 681,000 |   |
| Change in deferred taxes                                                          |   |                     | (688,000    | ) |   |   | (374,000 | ) |
| Provision for loan losses                                                         |   |                     | 4,900,000   |   |   |   | 4,100,000 |   |
| Loans originated for resale                                                       |   |                     | (13,273,000 | ) |   |   | (20,502,000 | ) |
| Proceeds from sales and transfers of loans                                        |   |                     | 13,089,000  |   |   |   | 22,889,000 |   |
| Net gain on sale or call of securities                                            |   |                     | (1,967,000  | ) |   |   | (229,000 | ) |
| Net loss on sale of other real estate owned                                       |   |                     | 39,000      |   |   |   | 47,000 |   |
| Provision for losses on other real estate owned                                   |   |                     | 198,000     |   |   |   | 145,000 |   |
| Equity compensation expense                                                       |   |                     | 40,000      |   |   |   | 11,000 |   |
| Net increase in other assets and accrued interest                                 |   |                     | (1,831,000  | ) |   |   | (482,000 | ) |
| Net increase in other liabilities                                                 |   |                     | 2,243,000   |   |   |   | 66,000 |   |
| Net loss on disposal of premises and equipment                                    |   |                     | -           |   |   |   | 5,000 |   |
| Net amortization of premiums on investments                                       |   |                     | 1,482,000   |   |   |   | 2,048,000 |   |
| Amortization of investment in limited partnership                                 |   |                     | 238,000     |   |   |   | 195,000 |   |
| Net acquisition amortization                                                      |   |                     | 103,000     |   |   |   | 103,000 |   |
|      Net cash provided by operating activities           |   |                     | 11,472,000  |   |   |   | 15,039,000 |   |
| Cash flows from investing activities                                              |   |                     |        |   |   |   |   |   |
| Proceeds from maturities, payments and calls of securities available for sale     |   |                     | 26,024,000  |   |   |   | 26,723,000 |   |
| Proceeds from sales of securities available for sale                              |   |                     | 25,137,000  |   |   |   | 75,176,000 |   |
| Proceeds from maturities, payments and calls of securities to be held to maturity |   |                     | 21,871,000  |   |   |   | 10,441,000 |   |
| Proceeds from sales of other real estate owned                                    |   |                     | 667,000     |   |   |   | 992,000 |   |
| Purchases of securities available for sale                                        |   |                     | (71,706,000 | ) |   |   | (107,910,000 | ) |
| Purchases of securities to be held to maturity                                    |   |                     | (35,101,000 | ) |   |   | (26,342,000 | ) |
| Redemption of restricted equity securities                                        |   |                     | 995,000     |   |   |   | - |   |
| Net increase in loans                                                             |   |                     | (22,340,000 | ) |   |   | (5,693,000 | ) |
| Capital expenditures                                                              |   |                     | (321,000    | ) |   |   | (57,000 | ) |
|      Net cash used in investing activities               |   |                     | (54,774,000 | ) |   |   | (26,670,000 | ) |
| Cash flows from financing activities                                              |   |                     |        |   |   |   |   |   |
| Net decrease in demand, savings, and money market accounts                        |   |                     | (761,000    | ) |   |   | (789,000 | ) |
| Net increase in certificates of deposit                                           |   |                     | 64,734,000  |   |   |   | 25,141,000 |   |
| Net decrease in short-term borrowings                                             |   |                     | (16,730,000 | ) |   |   | (7,987,000 | ) |
| Proceeds from sale of common stock                                                |   |                     | 290,000     |   |   |   | 193,000 |   |
| Dividends paid                                                                    |   |                     | (4,154,000  | ) |   |   | (4,443,000 | ) |
|      Net cash provided by financing activities           |   |                     | 43,379,000  |   |   |   | 12,115,000 |   |
| Net increase in cash and cash equivalents                                         |   |                     | 77,000      |   |   |   | 484,000 |   |
| Cash and cash equivalents at beginning of period                                  |   |                     | 14,115,000  |   |   |   | 13,838,000 |   |
|      Cash and cash equivalents at end of period          |   | $                        | 14,192,000  |   |   | $ | 14,322,000 |   |
| Interest paid                                                                     |   | $                        | 6,640,000   |   |   | $ | 7,594,000 |   |
| Income taxes paid                                                                 |   |                     | 869,000     |   |   |   | 1,297,000 |   |
| Non-cash transactions                                                             |   |                     |        |   |   |   |   |   |
| Net transfer from loans to other real estate owned                                |   |                     | 1,998,000   |   |   |   | 3,978,000 |   |

----

|                              |   | Amortized |        |   | Unrealized |   |       | Unrealized |   |   | Fair Value  |   |
|-----------------------------------|--------|-----------|-------------|--------|------------|--------|------------|------------|--------|--------|-------------|--------|
|                              |   | Cost      |        |   | Gains      |   |       | Losses     |   |   | (Estimated) |   |
| Securities available for sale     |   |           |        |   |            |   |       |            |   |   |             |   |
| U.S. Treasury and agency          |   | $         | -           |   |       | $      | -          |       |   | $      | -           |   |   | $ | - |   |
| Mortgage-backed securities        |   |      | 201,552,000 |   |       |   | 5,677,000  |       |   |   | (250,000    | )      |   |   | 206,979,000 |   |
| State and political subdivisions  |   |      | 92,353,000  |   |       |   | 6,291,000  |       |   |   | (51,000     | )      |   |   | 98,593,000 |   |
| Corporate securities              |   |      | -           |   |       |   | -          |       |   |   | -           |   |   |   | - |   |
| Other equity securities           |   |      | 1,863,000   |   |       |   | 47,000     |       |   |   | (135,000    | )      |   |   | 1,775,000 |   |
|                              |   | $         | 295,768,000 |   |       | $      | 12,015,000 |       |   | $      | (436,000    | )      |   | $ | 307,347,000 |   |
| Securities to be held to maturity |   |      |        |   |       |   |       |       |   |   |        |   |   |   |   |   |
| U.S. Treasury and agency          |   | $         | 41,197,000  |   |       | $      | 282,000    |       |   | $      | (33,000     | )      |   | $ | 41,446,000 |   |
| Mortgage-backed securities        |   |      | 49,992,000  |   |       |   | 3,524,000  |       |   |   | (8,000      | )      |   |   | 53,508,000 |   |
| State and political subdivisions  |   |      | 44,286,000  |   |       |   | 4,088,000  |       |   |   | -           |   |   |   | 48,374,000 |   |
| Corporate securities              |   |      | 300,000     |   |       |   | -          |       |   |   | -           |   |   |   | 300,000 |   |
|                              |   | $         | 135,775,000 |   |       | $      | 7,894,000  |       |   | $      | (41,000     | )      |   | $ | 143,628,000 |   |
| Restricted equity securities      |   |      |        |   |       |   |       |       |   |   |        |   |   |   |   |   |
| Federal Home Loan Bank Stock      |   | $         | 13,412,000  |   |       | $      | -          |       |   | $      | -           |   |   | $ | 13,412,000 |   |
| Federal Reserve Bank Stock        |   |      | 1,036,000   |   |       |   | -          |       |   |   | -           |   |   |   | 1,036,000 |   |
|                              |   | $         | 14,448,000  |   |       | $      | -          |       |   | $      | -           |   |   | $ | 14,448,000 |   |

----

|                              |   | Amortized |        |   | Unrealized |   |       | Unrealized |   |   | Fair Value  |   |
|-----------------------------------|--------|-----------|-------------|--------|------------|--------|------------|------------|--------|--------|-------------|--------|
|                              |   | Cost      |        |   | Gains      |   |       | Losses     |   |   | (Estimated) |   |
| Securities available for sale     |   |           |        |   |            |   |       |            |   |   |             |   |
| U.S. Treasury and agency          |   | $         | -           |   |       | $      | -          |       |   | $      | -           |   |   | $ | - |   |
| Mortgage-backed securities        |   |      | 191,924,000 |   |       |   | 6,486,000  |       |   |   | (178,000    | )      |   |   | 198,232,000 |   |
| State and political subdivisions  |   |      | 80,259,000  |   |       |   | 5,484,000  |       |   |   | (17,000     | )      |   |   | 85,726,000 |   |
| Corporate securities              |   |      | 1,098,000   |   |       |   | -          |       |   |   | (287,000    | )      |   |   | 811,000 |   |
| Other equity securities           |   |      | 1,535,000   |   |       |   | 37,000     |       |   |   | (139,000    | )      |   |   | 1,433,000 |   |
|                              |   | $         | 274,816,000 |   |       | $      | 12,007,000 |       |   | $      | (621,000    | )      |   | $ | 286,202,000 |   |
| Securities to be held to maturity |   |      |        |   |       |   |       |       |   |   |        |   |   |   |   |   |
| U.S. Treasury and agency          |   | $         | 19,390,000  |   |       | $      | 132,000    |       |   | $      | -           |   |   | $ | 19,522,000 |   |
| Mortgage-backed securities        |   |      | 56,800,000  |   |       |   | 3,900,000  |       |   |   | (3,000      | )      |   |   | 60,697,000 |   |
| State and political subdivisions  |   |      | 46,171,000  |   |       |   | 4,159,000  |       |   |   | (172,000    | )      |   |   | 50,158,000 |   |
| Corporate securities              |   |      | 300,000     |   |       |   | -          |       |   |   | -           |   |   |   | 300,000 |   |
|                              |   | $         | 122,661,000 |   |       | $      | 8,191,000  |       |   | $      | (175,000    | )      |   | $ | 130,677,000 |   |
| Restricted equity 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          |   | $         | 15,324,000  |   |       | $      | 799,000   |       |   | $      | -           |   |   | $ | 16,123,000 |   |
| Mortgage-backed securities        |   |      | 220,245,000 |   |       |   | 2,548,000 |       |   |   | (1,269,000  | )      |   |   | 221,524,000 |   |
| State and political subdivisions  |   |      | 63,696,000  |   |       |   | 1,573,000 |       |   |   | (107,000    | )      |   |   | 65,162,000 |   |
| Corporate securities              |   |      | 1,105,000   |   |       |   | -         |       |   |   | (169,000    | )      |   |   | 936,000 |   |
| Other equity securities           |   |      | 527,000     |   |       |   | 26,000    |       |   |   | (20,000     | )      |   |   | 533,000 |   |
|                              |   | $         | 300,897,000 |   |       | $      | 4,946,000 |       |   | $      | (1,565,000  | )      |   | $ | 304,278,000 |   |
| Securities to be held to maturity |   |      |        |   |       |   |      |       |   |   |        |   |   |   |   |   |
| U.S. Treasury and agency          |   | $         | 12,970,000  |   |       | $      | -         |       |   | $      | (186,000    | )      |   | $ | 12,784,000 |   |
| Mortgage-backed securities        |   |      | 60,836,000  |   |       |   | 3,626,000 |       |   |   | (37,000     | )      |   |   | 64,425,000 |   |
| State and political subdivisions  |   |      | 48,864,000  |   |       |   | 2,399,000 |       |   |   | (346,000    | )      |   |   | 50,917,000 |   |
| Corporate securities              |   |      | 300,000     |   |       |   | -         |       |   |   | -           |   |   |   | 300,000 |   |
|                              |   | $         | 122,970,000 |   |       | $      | 6,025,000 |       |   | $      | (569,000    | )      |   | $ | 128,426,000 |   |
| Restricted equity 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 |   | $                             | 4,296,000   |   |                              | $      | 4,328,000 |   |   | $ | 1,382,000 |   |   | $ | 1,399,000 |   |
| Due in 1 to 5 years   |   |                          | 55,317,000  |   |                              |   | 56,358,000 |   |   |   | 13,556,000 |   |   |   | 14,134,000 |   |
| Due in 5 to 10 years  |   |                          | 23,143,000  |   |                              |   | 24,034,000 |   |   |   | 21,137,000 |   |   |   | 22,958,000 |   |
| Due after 10 years    |   |                          | 211,149,000 |   |                              |   | 220,852,000 |   |   |   | 99,700,000 |   |   |   | 105,137,000 |   |
| Equity securities     |   |                          | 1,863,000   |   |                              |   | 1,775,000 |   |   |   | - |   |   |   | - |   |
|                  |   | $                             | 295,768,000 |   |                              | $      | 307,347,000 |   |   | $ | 135,775,000 |   |   | $ | 143,628,000 |   |
|                  |   | Securities available for sale |        |   | Securities to be held to maturity |   |
|-----------------------|--------|-------------------------------|-------------|--------|-----------------------------------|--------|
|                  |   | AmortizedCost                 |        |   | Fair Value (Estimated)            |   |   | AmortizedCost |   |   | Fair Value (Estimated) |   |
| Due in 1 year or less |   | $                        | 6,617,000   |   |                              | $      | 6,773,000 |   |   | $ | 5,179,000 |   |   | $ | 5,227,000 |   |
| Due in 1 to 5 years   |   |                          | 18,792,000  |   |                              |   | 19,473,000 |   |   |   | 10,085,000 |   |   |   | 10,654,000 |   |
| Due in 5 to 10 years  |   |                          | 23,219,000  |   |                              |   | 24,065,000 |   |   |   | 23,027,000 |   |   |   | 24,694,000 |   |
| Due after 10 years    |   |                          | 224,653,000 |   |                              |   | 234,458,000 |   |   |   | 84,370,000 |   |   |   | 90,102,000 |   |
| Equity securities     |   |                          | 1,535,000   |   |                              |   | 1,433,000 |   |   |   | - |   |   |   | - |   |
|                  |   | $                             | 274,816,000 |   |                              | $      | 286,202,000 |   |   | $ | 122,661,000 |   |   | $ | 130,677,000 |   |
|                  |   | Securities available for sale |        |   | Securities to be held to maturity |   |
|-----------------------|--------|-------------------------------|-------------|--------|-----------------------------------|--------|
|                  |   | AmortizedCost                 |        |   | Fair Value (Estimated)            |   |   | AmortizedCost |   |   | Fair Value (Estimated) |   |
| Due in 1 year or less |   | $                             | 5,032,000   |   |                              | $      | 4,941,000 |   |   | $ | 227,000 |   |   | $ | 227,000 |   |
| Due in 1 to 5 years   |   |                          | 7,623,000   |   |                              |   | 7,904,000 |   |   |   | 10,633,000 |   |   |   | 11,147,000 |   |
| Due in 5 to 10 years  |   |                          | 25,845,000  |   |                              |   | 26,099,000 |   |   |   | 23,562,000 |   |   |   | 24,623,000 |   |
| Due after 10 years    |   |                          | 261,870,000 |   |                              |   | 264,801,000 |   |   |   | 88,548,000 |   |   |   | 92,429,000 |   |
| Equity securities     |   |                          | 527,000     |   |                              |   | 533,000 |   |   |   | - |   |   |   | - |   |
|                  |   | $                             | 300,897,000 |   |                              | $      | 304,278,000 |   |   | $ | 122,970,000 |   |   | $ | 128,426,000 |   |
|                              |   | For the six months ended June 30, |       |   | For the quarters ended June 30, |   |
|-----------------------------------|--------|-----------------------------------|------------|--------|---------------------------------|--------|
|                              |   | 2012                              |       |   | 2011                            |   |   | 2012 |   |   | 2011 |   |
| Proceeds from sales of securities |   | $                                 | 25,137,000 |   |                            | $      | 75,176,000 |   |   | $ | 14,194,000 |   |   | $ | 75,176,000 |   |
| Gross realized gains              |   |                              | 2,256,000  |   |                            |   | 957,000 |   |   |   | 1,444,000 |   |   |   | 957,000 |   |
| Gross realized losses             |   |                              | (289,000   | )      |                            |   | (728,000 | ) |   |   | - |   |   |   | (728,000 | ) |
| Net gain                          |   | $                                 | 1,967,000  |   |                            | $      | 229,000 |   |   | $ | 1,444,000 |   |   | $ | 229,000 |   |
| Related income taxes              |   | $                                 | 688,000    |   |                            | $      | 80,000 |   |   | $ | 505,000 |   |   | $ | 80,000 |   |

----

|                                       |   | For the six months ended June 30, |       |   | For the quarters ended June 30, |   |
|--------------------------------------------|--------|-----------------------------------|------------|--------|---------------------------------|--------|
|                                       |   | 2012                              |       |   | 2011                            |   |   | 2012 |   |   | 2011 |   |
| Balance at beginning of period             |   | $                                 | 7,401,000  |   |                            | $      | (2,057,000 | ) |   | $ | 7,088,000 |   |   | $ | (1,389,000 | ) |
| Unrealized gains arising during the period |   |                              | 2,159,000  |   |                            |   | 6,775,000 |   |   |   | 2,118,000 |   |   |   | 5,747,000 |   |
| Realized gains during the period           |   |                              | (1,967,000 | )      |                            |   | (229,000 | ) |   |   | (1,444,000 | ) |   |   | (229,000 | ) |
| Related deferred taxes                     |   |                              | (67,000    | )      |                            |   | (2,291,000 | ) |   |   | (236,000 | ) |   |   | (1,931,000 | ) |
| Net change                                 |   |                              | 125,000    |   |                            |   | 4,255,000 |   |   |   | 438,000 |   |   |   | 3,587,000 |   |
| Balance at end of period                   |   | $                                 | 7,526,000  |   |                            | $      | 2,198,000 |   |   | $ | 7,526,000 |   |   | $ | 2,198,000 |   |
|                             |   | 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         |   | $                   | 7,942,000  |   |              | $      | (33,000  | )      |   | $ | - |   |   | $ | - |   |   | $ | 7,942,000 |   |   | $ | (33,000 | ) |
| Mortgage-backed securities       |   |                | 9,822,000  |   |              |   | (110,000 | )      |   |   | 5,137,000 |   |   |   | (148,000 | ) |   |   | 14,959,000 |   |   |   | (258,000 | ) |
| State and political subdivisions |   |                | 3,719,000  |   |              |   | (51,000  | )      |   |   | - |   |   |   | - |   |   |   | 3,719,000 |   |   |   | (51,000 | ) |
| Corporate securities             |   |                | -          |   |              |   | -        |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other equity securities          |   |                | -          |   |              |   | -        |   |   |   | 191,000 |   |   |   | (135,000 | ) |   |   | 191,000 |   |   |   | (135,000 | ) |
|                             |   | $                   | 21,483,000 |   |              | $      | (194,000 | )      |   | $ | 5,328,000 |   |   | $ | (283,000 | ) |   | $ | 26,811,000 |   |   | $ | (477,000 | ) |
|                             |  | 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       |  |                     | 12,489,000 |  |                   |   | (25,000  | )     |  |  | 6,780,000 |  |  |  | (156,000 | ) |  |  | 19,269,000 |  |  |  | (181,000 | ) |
| State and political subdivisions |  |                     | 1,984,000  |  |                   |   | (17,000  | )     |  |  | 1,667,000 |  |  |  | (172,000 | ) |  |  | 3,651,000 |  |  |  | (189,000 | ) |
| Corporate securities             |  |                     | -          |  |                   |   | -        |       |  |  | 811,000 |  |  |  | (287,000 | ) |  |  | 811,000 |  |  |  | (287,000 | ) |
| Other equity securities          |  |                     | 154,000    |  |                   |   | (120,000 | )     |  |  | 34,000 |  |  |  | (19,000 | ) |  |  | 188,000 |  |  |  | (139,000 | ) |
|                             |  | $                   | 14,627,000 |  |                   | $ | (162,000 | )     |  | $ | 9,292,000 |  |  | $ | (634,000 | ) |  | $ | 23,919,000 |  |  | $ | (796,000 | ) |

----

|                             |   | 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         |   | $                   | 12,784,000 |   |              | $      | (186,000   | )      |   | $ | - |   |   | $ | - |   |   | $ | 12,784,000 |   |   | $ | (186,000 | ) |
| Mortgage-backed securities       |   |                | 71,157,000 |   |              |   | (1,044,000 | )      |   |   | 3,681,000 |   |   |   | (262,000 | ) |   |   | 74,838,000 |   |   |   | (1,306,000 | ) |
| State and political subdivisions |   |                | 12,050,000 |   |              |   | (142,000   | )      |   |   | 1,489,000 |   |   |   | (311,000 | ) |   |   | 13,539,000 |   |   |   | (453,000 | ) |
| Corporate securities             |   |                | -          |   |              |   | -          |   |   |   | 936,000 |   |   |   | (169,000 | ) |   |   | 936,000 |   |   |   | (169,000 | ) |
| Other equity securities          |   |                | 247,000    |   |              |   | (15,000    | )      |   |   | 48,000 |   |   |   | (5,000 | ) |   |   | 295,000 |   |   |   | (20,000 | ) |
|                             |   | $                   | 96,238,000 |   |              | $      | (1,387,000 | )      |   | $ | 6,154,000 |   |   | $ | (747,000 | ) |   | $ | 102,392,000 |   |   | $ | (2,134,000 | ) |
|                           |   | June 30, 2012 |        |   | December 31, 2011 |   |   | June 30, 2011 |   |
|--------------------------------|--------|---------------|-------------|--------|-------------------|--------|--------|---------------|--------|
| Commercial                     |   |               |        |   |                   |   |   |               |   |   |  |   |   |  |   |   |  |   |
|    Real estate  |   | $             | 253,193,000 |   |              |   | 28.7   | %             |   | $ | 255,424,000 |   |   |   | 29.5 | % |   | $ | 263,337,000 |   |   |   | 29.7 | % |
|    Construction |   |          | 33,072,000  |   |              |   | 3.8    | %             |   |   | 32,574,000 |   |   |   | 3.8 | % |   |   | 29,386,000 |   |   |   | 3.3 | % |
|    Other        |   |          | 87,833,000  |   |              |   | 10.0   | %             |   |   | 86,982,000 |   |   |   | 10.1 | % |   |   | 102,499,000 |   |   |   | 11.6 | % |
| Municipal                      |   |          | 16,089,000  |   |              |   | 1.8    | %             |   |   | 16,221,000 |   |   |   | 1.9 | % |   |   | 19,974,000 |   |   |   | 2.3 | % |
| Residential                    |   |          |        |   |              |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |          | 368,876,000 |   |              |   | 41.8   | %             |   |   | 341,286,000 |   |   |   | 39.5 | % |   |   | 335,807,000 |   |   |   | 37.9 | % |
|    Construction |   |          | 6,449,000   |   |              |   | 0.7    | %             |   |   | 10,469,000 |   |   |   | 1.2 | % |   |   | 11,063,000 |   |   |   | 1.2 | % |
| Home equity line of credit     |   |          | 100,689,000 |   |              |   | 11.4   | %             |   |   | 105,244,000 |   |   |   | 12.1 | % |   |   | 107,224,000 |   |   |   | 12.0 | % |
| Consumer                       |   |          | 15,613,000  |   |              |   | 1.8    | %             |   |   | 16,788,000 |   |   |   | 1.9 | % |   |   | 17,639,000 |   |   |   | 2.0 | % |
| Total                          |   | $             | 881,814,000 |   |              |   | 100.0  | %             |   | $ | 864,988,000 |   |   |   | 100.0 | % |   | $ | 886,929,000 |   |   |   | 100.0 | % |

----

|                           |   | 30-89 DaysPast Due |      |   | 90+ DaysPast Due |   |       | AllPast Due |   |   | Current    |   |   | Total  |        |   | 90+ Days & Accruing |   |
|--------------------------------|--------|--------------------|-----------|--------|------------------|--------|------------|-------------|--------|--------|------------|--------|--------|--------|-------------|--------|-------------------------|--------|
| Commercial                     |   |                    |      |   |                  |   |       |             |   |   |            |   |   |        |        |   |                         |   |
|    Real estate  |   | $                  | 13,000    |   |             | $      | 1,858,000  |        |   | $      | 1,871,000  |   |   | $      | 251,322,000 |   |                    | $      | 253,193,000 |   |   | $ | - |   |
|    Construction |   |               | 119,000   |   |             |   | 34,000     |        |   |   | 153,000    |   |   |   | 32,919,000  |   |                    |   | 33,072,000 |   |   |   | - |   |
|    Other        |   |               | 443,000   |   |             |   | 1,398,000  |        |   |   | 1,841,000  |   |   |   | 85,992,000  |   |                    |   | 87,833,000 |   |   |   | - |   |
| Municipal                      |   |               | 1,560,000 |   |             |   | -          |        |   |   | 1,560,000  |   |   |   | 14,529,000  |   |                    |   | 16,089,000 |   |   |   | - |   |
| Residential                    |   |               |      |   |             |   |       |        |   |   |       |   |   |   |        |   |                    |   |   |   |   |   |   |   |
|    Term         |   |               | 3,191,000 |   |             |   | 7,878,000  |        |   |   | 11,069,000 |   |   |   | 357,807,000 |   |                    |   | 368,876,000 |   |   |   | - |   |
|    Construction |   |               | -         |   |             |   | 1,336,000  |        |   |   | 1,336,000  |   |   |   | 5,113,000   |   |                    |   | 6,449,000 |   |   |   | - |   |
| Home equity line of credit     |   |               | 530,000   |   |             |   | 1,311,000  |        |   |   | 1,841,000  |   |   |   | 98,848,000  |   |                    |   | 100,689,000 |   |   |   | - |   |
| Consumer                       |   |               | 189,000   |   |             |   | 180,000    |        |   |   | 369,000    |   |   |   | 15,244,000  |   |                    |   | 15,613,000 |   |   |   | 164,000 |   |
| Total                          |   | $                  | 6,045,000 |   |             | $      | 13,995,000 |        |   | $      | 20,040,000 |   |   | $      | 861,774,000 |   |                    | $      | 881,814,000 |   |   | $ | 164,000 |   |
|                           |   | 30-89 DaysPast Due |      |   | 90+ DaysPast Due |   |       | AllPast Due |   |   | Current    |   |   | Total  |        |   | 90+ Days& Accruing |   |
|--------------------------------|--------|--------------------|-----------|--------|------------------|--------|------------|-------------|--------|--------|------------|--------|--------|--------|-------------|--------|------------------------|--------|
| Commercial                     |   |                    |      |   |                  |   |       |             |   |   |            |   |   |        |        |   |                        |   |
|    Real estate  |   | $                  | 2,872,000 |   |             | $      | 3,992,000  |        |   | $      | 6,864,000  |   |   | $      | 248,560,000 |   |                   | $      | 255,424,000 |   |   | $ | - |   |
|    Construction |   |               | 174,000   |   |             |   | 1,603,000  |        |   |   | 1,777,000  |   |   |   | 30,797,000  |   |                   |   | 32,574,000 |   |   |   | - |   |
|    Other        |   |               | 1,431,000 |   |             |   | 1,192,000  |        |   |   | 2,623,000  |   |   |   | 84,359,000  |   |                   |   | 86,982,000 |   |   |   | 52,000 |   |
| Municipal                      |   |               | -         |   |             |   | -          |        |   |   | -          |   |   |   | 16,221,000  |   |                   |   | 16,221,000 |   |   |   | - |   |
| Residential                    |   |               |      |   |             |   |       |        |   |   |       |   |   |   |        |   |                   |   |   |   |   |   |   |   |
|    Term         |   |               | 3,331,000 |   |             |   | 8,843,000  |        |   |   | 12,174,000 |   |   |   | 329,112,000 |   |                   |   | 341,286,000 |   |   |   | 1,118,000 |   |
|    Construction |   |               | -         |   |             |   | 1,198,000  |        |   |   | 1,198,000  |   |   |   | 9,271,000   |   |                   |   | 10,469,000 |   |   |   | - |   |
| Home equity line of credit     |   |               | 480,000   |   |             |   | 1,134,000  |        |   |   | 1,614,000  |   |   |   | 103,630,000 |   |                   |   | 105,244,000 |   |   |   | - |   |
| Consumer                       |   |               | 331,000   |   |             |   | 16,000     |        |   |   | 347,000    |   |   |   | 16,441,000  |   |                   |   | 16,788,000 |   |   |   | - |   |
| Total                          |   | $                  | 8,619,000 |   |             | $      | 17,978,000 |        |   | $      | 26,597,000 |   |   | $      | 838,391,000 |   |                   | $      | 864,988,000 |   |   | $ | 1,170,000 |   |
|                           |   | 30-89 DaysPast Due |       |   | 90+ DaysPast Due |   |       | AllPast Due |   |   | Current    |   |   | Total  |        |   | 90+ Days & Accruing |   |
|--------------------------------|--------|--------------------|------------|--------|------------------|--------|------------|-------------|--------|--------|------------|--------|--------|--------|-------------|--------|-------------------------|--------|
| Commercial                     |   |                    |       |   |                  |   |       |             |   |   |            |   |   |        |        |   |                         |   |
|    Real estate  |   | $                  | 2,227,000  |   |             | $      | 4,051,000  |        |   | $      | 6,278,000  |   |   | $      | 257,059,000 |   |                    | $      | 263,337,000 |   |   | $ | - |   |
|    Construction |   |               | 117,000    |   |             |   | -          |        |   |   | 117,000    |   |   |   | 29,269,000  |   |                    |   | 29,386,000 |   |   |   | - |   |
|    Other        |   |               | 544,000    |   |             |   | 997,000    |        |   |   | 1,541,000  |   |   |   | 100,958,000 |   |                    |   | 102,499,000 |   |   |   | 38,000 |   |
| Municipal                      |   |               | -          |   |             |   | -          |        |   |   | -          |   |   |   | 19,974,000  |   |                    |   | 19,974,000 |   |   |   | - |   |
| Residential                    |   |               |       |   |             |   |       |        |   |   |       |   |   |   |        |   |                    |   |   |   |   |   |   |   |
|    Term         |   |               | 6,093,000  |   |             |   | 9,916,000  |        |   |   | 16,009,000 |   |   |   | 319,798,000 |   |                    |   | 335,807,000 |   |   |   | 309,000 |   |
|    Construction |   |               | -          |   |             |   | 334,000    |        |   |   | 334,000    |   |   |   | 10,729,000  |   |                    |   | 11,063,000 |   |   |   | - |   |
| Home equity line of credit     |   |               | 868,000    |   |             |   | 740,000    |        |   |   | 1,608,000  |   |   |   | 105,616,000 |   |                    |   | 107,224,000 |   |   |   | - |   |
| Consumer                       |   |               | 258,000    |   |             |   | 8,000      |        |   |   | 266,000    |   |   |   | 17,373,000  |   |                    |   | 17,639,000 |   |   |   | 8,000 |   |
| Total                          |   | $                  | 10,107,000 |   |             | $      | 16,046,000 |        |   | $      | 26,153,000 |   |   | $      | 860,776,000 |   |                    | $      | 886,929,000 |   |   | $ | 355,000 |   |

----

|                           |   | June 30, 2012 |       |   | December 31, 2011 |   |       | June 30, 2011 |   |
|--------------------------------|--------|---------------|------------|--------|-------------------|--------|------------|---------------|--------|
| Commercial                     |   |               |       |   |                   |   |       |               |   |
|    Real estate  |   | $             | 5,545,000  |   |              | $      | 7,064,000  |          |   | $ | 6,746,000 |   |
|    Construction |   |          | 521,000    |   |              |   | 2,350,000  |          |   |   | 771,000 |   |
|    Other        |   |          | 2,361,000  |   |              |   | 5,784,000  |          |   |   | 2,095,000 |   |
| Municipal                      |   |          | -          |   |              |   | -          |          |   |   | - |   |
| Residential                    |   |          |       |   |              |   |       |          |   |   |   |   |
|    Term         |   |          | 10,723,000 |   |              |   | 10,194,000 |          |   |   | 11,260,000 |   |
|    Construction |   |          | 1,336,000  |   |              |   | 1,198,000  |          |   |   | 334,000 |   |
| Home equity line of credit     |   |          | 1,456,000  |   |              |   | 1,163,000  |          |   |   | 740,000 |   |
| Consumer                       |   |          | 16,000     |   |              |   | 53,000     |          |   |   | 103,000 |   |
| Total                          |   | $             | 21,958,000 |   |              | $      | 27,806,000 |          |   | $ | 22,049,000 |   |

----

|                       |   |                     |       |   |                          |   |       |                   |   |   | For six months endedJune 30, 2012 |   |   | For the quarter endedJune 30, 2012 |       |
|----------------------------|--------|---------------------|------------|--------|--------------------------|--------|------------|-------------------|--------|--------|-----------------------------------|--------|--------|------------------------------------|------------|
|                       |   | Recorded Investment |       |   | Unpaid Principal Balance |   |       | Related Allowance |   |   | Average Recorded Investment       |   |   | Recognized Interest Income         |       |   | Average Recorded Investment |   |   | Recognized Interest Income |   |
| With No Related Allowance  |   |
| Commercial                 |   |                     |       |   |                          |   |       |                   |   |   |                                   |   |   |                                    |       |   |  |   |   |  |   |
|   Real estate    |   | $                   | 10,313,000 |   |                     | $      | 10,313,000 |              |   | $      | -                                 |   |   | $                                  | 9,729,000  |   |   | $ | 111,000 |   |   | $ | 11,013,000 |   |   | $ | 71,000 |   |
|   Construction   |   |                | 1,464,000  |   |                     |   | 1,464,000  |              |   |   | -                                 |   |   |                               | 2,189,000  |   |   |   | 26,000 |   |   |   | 1,395,000 |   |   |   | 13,000 |   |
|   Other          |   |                | 2,249,000  |   |                     |   | 2,249,000  |              |   |   | -                                 |   |   |                               | 2,710,000  |   |   |   | 16,000 |   |   |   | 2,439,000 |   |   |   | 21,000 |   |
| Municipal                  |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential                |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   | - |   |   |   |   |   |   |   |   |   |
|   Term           |   |                | 8,695,000  |   |                     |   | 8,695,000  |              |   |   | -                                 |   |   |                               | 9,662,000  |   |   |   | 71,000 |   |   |   | 9,322,000 |   |   |   | 41,000 |   |
|   Construction   |   |                | 1,002,000  |   |                     |   | 1,002,000  |              |   |   | -                                 |   |   |                               | 880,000    |   |   |   | - |   |   |   | 1,042,000 |   |   |   | - |   |
| Home equity line of credit |   |                | 740,000    |   |                     |   | 740,000    |              |   |   | -                                 |   |   |                               | 758,000    |   |   |   | - |   |   |   | 740,000 |   |   |   | - |   |
| Consumer                   |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | 6,000      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                       |   | $                   | 24,463,000 |   |                     | $      | 24,463,000 |              |   | $      | -                                 |   |   | $                                  | 25,934,000 |   |   | $ | 224,000 |   |   | $ | 25,951,000 |   |   | $ | 146,000 |   |
| With an Allowance Recorded |   |
| Commercial                 |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Real estate    |   | $                   | 3,482,000  |   |                     | $      | 3,482,000  |              |   | $      | 1,133,000                         |   |   | $                                  | 4,026,000  |   |   | $ | 16,000 |   |   | $ | 3,775,000 |   |   | $ | 6,000 |   |
|   Construction   |   |                | 2,155,000  |   |                     |   | 2,155,000  |              |   |   | 787,000                           |   |   |                               | 1,376,000  |   |   |   | 37,000 |   |   |   | 2,155,000 |   |   |   | 37,000 |   |
|   Other          |   |                | 1,851,000  |   |                     |   | 1,851,000  |              |   |   | 932,000                           |   |   |                               | 2,013,000  |   |   |   | 18,000 |   |   |   | 1,802,000 |   |   |   | 13,000 |   |
| Municipal                  |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential                |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Term           |   |                | 10,357,000 |   |                     |   | 10,357,000 |              |   |   | 966,000                           |   |   |                               | 8,487,000  |   |   |   | 127,000 |   |   |   | 9,525,000 |   |   |   | 68,000 |   |
|   Construction   |   |                | 334,000    |   |                     |   | 334,000    |              |   |   | 48,000                            |   |   |                               | 466,000    |   |   |   | - |   |   |   | 334,000 |   |   |   | - |   |
| Home equity line of credit |   |                | 716,000    |   |                     |   | 716,000    |              |   |   | 300,000                           |   |   |                               | 566,000    |   |   |   | - |   |   |   | 613,000 |   |   |   | - |   |
| Consumer                   |   |                | 16,000     |   |                     |   | 16,000     |              |   |   | 11,000                            |   |   |                               | 15,000     |   |   |   | - |   |   |   | 15,000 |   |   |   | - |   |
|                       |   | $                   | 18,911,000 |   |                     | $      | 18,911,000 |              |   | $      | 4,177,000                         |   |   | $                                  | 16,949,000 |   |   | $ | 198,000 |   |   | $ | 18,219,000 |   |   | $ | 124,000 |   |
| Total                      |   |
| Commercial                 |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Real estate    |   | $                   | 13,795,000 |   |                     | $      | 13,795,000 |              |   | $      | 1,133,000                         |   |   | $                                  | 13,755,000 |   |   | $ | 127,000 |   |   | $ | 14,788,000 |   |   | $ | 77,000 |   |
|   Construction   |   |                | 3,619,000  |   |                     |   | 3,619,000  |              |   |   | 787,000                           |   |   |                               | 3,565,000  |   |   |   | 63,000 |   |   |   | 3,550,000 |   |   |   | 50,000 |   |
|   Other          |   |                | 4,100,000  |   |                     |   | 4,100,000  |              |   |   | 932,000                           |   |   |                               | 4,723,000  |   |   |   | 34,000 |   |   |   | 4,241,000 |   |   |   | 34,000 |   |
| Municipal                  |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential                |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Term           |   |                | 19,052,000 |   |                     |   | 19,052,000 |              |   |   | 966,000                           |   |   |                               | 18,149,000 |   |   |   | 198,000 |   |   |   | 18,847,000 |   |   |   | 109,000 |   |
|   Construction   |   |                | 1,336,000  |   |                     |   | 1,336,000  |              |   |   | 48,000                            |   |   |                               | 1,346,000  |   |   |   | - |   |   |   | 1,376,000 |   |   |   | - |   |
| Home equity line of credit |   |                | 1,456,000  |   |                     |   | 1,456,000  |              |   |   | 300,000                           |   |   |                               | 1,324,000  |   |   |   | - |   |   |   | 1,353,000 |   |   |   | - |   |
| Consumer                   |   |                | 16,000     |   |                     |   | 16,000     |              |   |   | 11,000                            |   |   |                               | 21,000     |   |   |   | - |   |   |   | 15,000 |   |   |   | - |   |
|                       |   | $                   | 43,374,000 |   |                     | $      | 43,374,000 |              |   | $      | 4,177,000                         |   |   | $                                  | 42,883,000 |   |   | $ | 422,000 |   |   | $ | 44,170,000 |   |   | $ | 270,000 |   |

----

|                           |   | Recorded Investment |       |   | UnpaidPrincipal Balance |   |       | Related Allowance |   |   | AverageRecorded Investment |   |   | Recognized InterestIncome |       |
|--------------------------------|--------|---------------------|------------|--------|-------------------------|--------|------------|-------------------|--------|--------|----------------------------|--------|--------|---------------------------|------------|
| With No Related Allowance      |   |
| Commercial                     |   |                     |       |   |                         |   |       |                   |   |   |                            |   |   |                           |       |
|    Real estate  |   | $                   | 5,584,000  |   |                    | $      | 5,584,000  |              |   | $      | -                          |   |   | $                         | 5,212,000  |   |   | $ | 23,000 |   |
|    Construction |   |                | 5,172,000  |   |                    |   | 5,172,000  |              |   |   | -                          |   |   |                      | 1,072,000  |   |   |   | 143,000 |   |
|    Other        |   |                | 6,022,000  |   |                    |   | 6,022,000  |              |   |   | -                          |   |   |                      | 1,918,000  |   |   |   | 28,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                      | -          |   |   |   | - |   |
| Residential                    |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                      |       |   |   |   |   |   |
|    Term         |   |                | 9,875,000  |   |                    |   | 9,875,000  |              |   |   | -                          |   |   |                      | 9,493,000  |   |   |   | 54,000 |   |
|    Construction |   |                | 468,000    |   |                    |   | 468,000    |              |   |   | -                          |   |   |                      | 961,000    |   |   |   | - |   |
| Home equity line of credit     |   |                | 739,000    |   |                    |   | 739,000    |              |   |   | -                          |   |   |                      | 646,000    |   |   |   | - |   |
| Consumer                       |   |                | 37,000     |   |                    |   | 37,000     |              |   |   | -                          |   |   |                      | 39,000     |   |   |   | - |   |
|                           |   | $                   | 27,897,000 |   |                    | $      | 27,897,000 |              |   | $      | -                          |   |   | $                         | 19,341,000 |   |   | $ | 248,000 |   |
| With an Allowance Recorded     |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                      |       |   |   |   |   |   |
|    Real estate  |   | $                   | 4,557,000  |   |                    | $      | 4,557,000  |              |   | $      | 808,000                    |   |   | $                         | 2,307,000  |   |   | $ | 103,000 |   |
|    Construction |   |                | 530,000    |   |                    |   | 530,000    |              |   |   | 33,000                     |   |   |                      | 247,000    |   |   |   | - |   |
|    Other        |   |                | 1,020,000  |   |                    |   | 1,020,000  |              |   |   | 402,000                    |   |   |                      | 681,000    |   |   |   | 19,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                      | -          |   |   |   | - |   |
| Residential                    |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                      |       |   |   |   |   |   |
|    Term         |   |                | 6,946,000  |   |                    |   | 6,946,000  |              |   |   | 478,000                    |   |   |                      | 5,628,000  |   |   |   | 228,000 |   |
|    Construction |   |                | 730,000    |   |                    |   | 730,000    |              |   |   | 235,000                    |   |   |                      | 244,000    |   |   |   | - |   |
| Home equity line of credit     |   |                | 424,000    |   |                    |   | 424,000    |              |   |   | 91,000                     |   |   |                      | 272,000    |   |   |   | - |   |
| Consumer                       |   |                | 16,000     |   |                    |   | 16,000     |              |   |   | 11,000                     |   |   |                      | 57,000     |   |   |   | - |   |
|                           |   | $                   | 14,223,000 |   |                    | $      | 14,223,000 |              |   | $      | 2,058,000                  |   |   | $                         | 9,436,000  |   |   | $ | 350,000 |   |
| Total                          |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                      |       |   |   |   |   |   |
| Commercial                     |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                      |       |   |   |   |   |   |
|    Real estate  |   | $                   | 10,141,000 |   |                    | $      | 10,141,000 |              |   | $      | 808,000                    |   |   | $                         | 7,519,000  |   |   | $ | 126,000 |   |
|    Construction |   |                | 5,702,000  |   |                    |   | 5,702,000  |              |   |   | 33,000                     |   |   |                      | 1,318,000  |   |   |   | 143,000 |   |
|    Other        |   |                | 7,042,000  |   |                    |   | 7,042,000  |              |   |   | 402,000                    |   |   |                      | 2,600,000  |   |   |   | 47,000 |   |
| Municipal                      |   |                | -          |   |                    |   | -          |              |   |   | -                          |   |   |                      | -          |   |   |   | - |   |
| Residential                    |   |                |       |   |                    |   |       |              |   |   |                       |   |   |                      |       |   |   |   |   |   |
|    Term         |   |                | 16,821,000 |   |                    |   | 16,821,000 |              |   |   | 478,000                    |   |   |                      | 15,121,000 |   |   |   | 282,000 |   |
|    Construction |   |                | 1,198,000  |   |                    |   | 1,198,000  |              |   |   | 235,000                    |   |   |                      | 1,205,000  |   |   |   | - |   |
| Home equity line of credit     |   |                | 1,163,000  |   |                    |   | 1,163,000  |              |   |   | 91,000                     |   |   |                      | 918,000    |   |   |   | - |   |
| Consumer                       |   |                | 53,000     |   |                    |   | 53,000     |              |   |   | 11,000                     |   |   |                      | 96,000     |   |   |   | - |   |
|                           |   | $                   | 42,120,000 |   |                    | $      | 42,120,000 |              |   | $      | 2,058,000                  |   |   | $                         | 28,777,000 |   |   | $ | 598,000 |   |

----

|                       |   |                     |       |   |                          |   |       |                   |   |   | For six months endedJune 30, 2011 |   |   | For the quarter endedJune 30, 2011 |       |
|----------------------------|--------|---------------------|------------|--------|--------------------------|--------|------------|-------------------|--------|--------|-----------------------------------|--------|--------|------------------------------------|------------|
|                       |   | Recorded Investment |       |   | Unpaid Principal Balance |   |       | Related Allowance |   |   | Average Recorded Investment       |   |   | Recognized Interest Income         |       |   | Average Recorded Investment |   |   | Recognized Interest Income |   |
| With No Related Allowance  |   |
| Commercial                 |   |                     |       |   |                          |   |       |                   |   |   |                                   |   |   |                                    |       |   |  |   |   |  |   |
|   Real estate    |   | $                   | 5,841,000  |   |                     | $      | 5,841,000  |              |   | $      | -                                 |   |   | $                                  | 5,151,000  |   |   | $ | 12,000 |   |   | $ | 5,738,000 |   |   | $ | 6,000 |   |
|   Construction   |   |                | 772,000    |   |                     |   | 772,000    |              |   |   | -                                 |   |   |                               | 617,000    |   |   |   | 72,000 |   |   |   | 790,000 |   |   |   | 36,000 |   |
|   Other          |   |                | 1,056,000  |   |                     |   | 1,056,000  |              |   |   | -                                 |   |   |                               | 1,118,000  |   |   |   | 14,000 |   |   |   | 1,064,000 |   |   |   | 7,000 |   |
| Municipal                  |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential                |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   | - |   |
|   Term           |   |                | 10,818,000 |   |                     |   | 10,818,000 |              |   |   | -                                 |   |   |                               | 8,957,000  |   |   |   | 27,000 |   |   |   | 9,785,000 |   |   |   | 13,000 |   |
|   Construction   |   |                | 334,000    |   |                     |   | 334,000    |              |   |   | -                                 |   |   |                               | 1,641,000  |   |   |   | - |   |   |   | 348,000 |   |   |   | - |   |
| Home equity line of credit |   |                | 509,000    |   |                     |   | 509,000    |              |   |   | -                                 |   |   |                               | 417,000    |   |   |   | - |   |   |   | 516,000 |   |   |   | - |   |
| Consumer                   |   |                | 38,000     |   |                     |   | 38,000     |              |   |   | -                                 |   |   |                               | 40,000     |   |   |   | - |   |   |   | 38,000 |   |   |   | - |   |
|                       |   | $                   | 19,368,000 |   |                     | $      | 19,368,000 |              |   | $      | -                                 |   |   | $                                  | 17,941,000 |   |   | $ | 125,000 |   |   | $ | 18,279,000 |   |   | $ | 62,000 |   |
| With an Allowance Recorded |   |
| Commercial                 |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Real estate    |   | $                   | 905,000    |   |                     | $      | 905,000    |              |   | $      | 613,000                           |   |   | $                                  | 2,021,000  |   |   | $ | 52,000 |   |   | $ | 1,785,000 |   |   | $ | 26,000 |   |
|   Construction   |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | 227,000    |   |   |   | - |   |   |   | 3,000 |   |   |   | - |   |
|   Other          |   |                | 1,039,000  |   |                     |   | 1,039,000  |              |   |   | 857,000                           |   |   |                               | 652,000    |   |   |   | 10,000 |   |   |   | 754,000 |   |   |   | 5,000 |   |
| Municipal                  |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential                |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   | - |   |
|   Term           |   |                | 5,373,000  |   |                     |   | 5,373,000  |              |   |   | 265,000                           |   |   |                               | 5,254,000  |   |   |   | 114,000 |   |   |   | 4,978,000 |   |   |   | 57,000 |   |
|   Construction   |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | 192,000    |   |   |   | - |   |   |   | 192,000 |   |   |   | - |   |
| Home equity line of credit |   |                | 231,000    |   |                     |   | 231,000    |              |   |   | 165,000                           |   |   |                               | 256,000    |   |   |   | - |   |   |   | 281,000 |   |   |   | - |   |
| Consumer                   |   |                | 65,000     |   |                     |   | 65,000     |              |   |   | 65,000                            |   |   |                               | 69,000     |   |   |   | - |   |   |   | 65,000 |   |   |   | - |   |
|                       |   | $                   | 7,613,000  |   |                     | $      | 7,613,000  |              |   | $      | 1,965,000                         |   |   | $                                  | 8,671,000  |   |   | $ | 176,000 |   |   | $ | 8,058,000 |   |   | $ | 88,000 |   |
| Total                      |   |
| Commercial                 |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Real estate    |   | $                   | 6,746,000  |   |                     | $      | 6,746,000  |              |   | $      | 613,000                           |   |   | $                                  | 7,172,000  |   |   | $ | 64,000 |   |   | $ | 7,521,000 |   |   | $ | 32,000 |   |
|   Construction   |   |                | 772,000    |   |                     |   | 772,000    |              |   |   | -                                 |   |   |                               | 844,000    |   |   |   | 72,000 |   |   |   | 793,000 |   |   |   | 36,000 |   |
|   Other          |   |                | 2,095,000  |   |                     |   | 2,095,000  |              |   |   | 857,000                           |   |   |                               | 1,770,000  |   |   |   | 24,000 |   |   |   | 1,816,000 |   |   |   | 12,000 |   |
| Municipal                  |   |                | -          |   |                     |   | -          |              |   |   | -                                 |   |   |                               | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential                |   |                |       |   |                     |   |       |              |   |   |                              |   |   |                               |       |   |   |   | - |   |   |   |   |   |   |   | - |   |
|   Term           |   |                | 16,191,000 |   |                     |   | 16,191,000 |              |   |   | 265,000                           |   |   |                               | 14,211,000 |   |   |   | 141,000 |   |   |   | 14,761,000 |   |   |   | 70,000 |   |
|   Construction   |   |                | 334,000    |   |                     |   | 334,000    |              |   |   | -                                 |   |   |                               | 1,833,000  |   |   |   | - |   |   |   | 539,000 |   |   |   | - |   |
| Home equity line of credit |   |                | 740,000    |   |                     |   | 740,000    |              |   |   | 165,000                           |   |   |                               | 673,000    |   |   |   | - |   |   |   | 797,000 |   |   |   | - |   |
| Consumer                   |   |                | 103,000    |   |                     |   | 103,000    |              |   |   | 65,000                            |   |   |                               | 109,000    |   |   |   | - |   |   |   | 103,000 |   |   |   | - |   |
|                       |   | $                   | 26,981,000 |   |                     | $      | 26,981,000 |              |   | $      | 1,965,000                         |   |   | $                                  | 26,612,000 |   |   | $ | 301,000 |   |   | $ | 26,330,000 |   |   | $ | 150,000 |   |

----

|  As of June 30, 2012      |   | Specific Reserves on Loans Evaluated Individually for Impairment |      |   | General Reserves on Loans Based on Historical Loss Experience |   |      | Reserves for Qualitative Factors |   |   | UnallocatedReserves |   |   | Total Reserves |      |
|--------------------------------|--------|------------------------------------------------------------------|-----------|--------|---------------------------------------------------------------|--------|-----------|----------------------------------|--------|--------|---------------------|--------|--------|----------------|-----------|
| Commercial                     |   |                                                                  |      |   |                                                               |   |      |                                  |   |   |                     |   |   |                |      |
|    Real estate  |   | $                                                                | 1,133,000 |   |                                                          | $      | 2,685,000 |                             |   | $      | 1,746,000           |   |   | $              | -         |   |   | $ | 5,564,000 |   |
|    Construction |   |                                                             | 787,000   |   |                                                          |   | 355,000   |                             |   |   | 231,000             |   |   |           | -         |   |   |   | 1,373,000 |   |
|    Other        |   |                                                             | 932,000   |   |                                                          |   | 935,000   |                             |   |   | 609,000             |   |   |           | -         |   |   |   | 2,476,000 |   |
| Municipal                      |   |                                                             | -         |   |                                                          |   | -         |                             |   |   | 19,000              |   |   |           | -         |   |   |   | 19,000 |   |
| Residential                    |   |                                                             |      |   |                                                          |   |      |                             |   |   |                |   |   |           |      |   |   |   |   |   |
|    Term         |   |                                                             | 966,000   |   |                                                          |   | 165,000   |                             |   |   | 456,000             |   |   |           | -         |   |   |   | 1,587,000 |   |
|    Construction |   |                                                             | 48,000    |   |                                                          |   | 2,000     |                             |   |   | 8,000               |   |   |           | -         |   |   |   | 58,000 |   |
| Home equity line of credit     |   |                                                             | 300,000   |   |                                                          |   | 155,000   |                             |   |   | 354,000             |   |   |           | -         |   |   |   | 809,000 |   |
| Consumer                       |   |                                                             | 11,000    |   |                                                          |   | 351,000   |                             |   |   | 241,000             |   |   |           | -         |   |   |   | 603,000 |   |
| Unallocated                    |   |                                                             | -         |   |                                                          |   | -         |                             |   |   | -                   |   |   |           | 1,895,000 |   |   |   | 1,895,000 |   |
|                           |   | $                                                                | 4,177,000 |   |                                                          | $      | 4,648,000 |                             |   | $      | 3,664,000           |   |   | $              | 1,895,000 |   |   | $ | 14,384,000 |   |
|  As of December 31, 2011  |   | Specific Reserves on Loans Evaluated Individually for Impairment |      |   | General Reserves on Loans Based on Historical Loss Experience |   |      | Reserves for Qualitative Factors |   |   | Unallocated Reserves |   |   | Total Reserves |      |
|--------------------------------|--------|------------------------------------------------------------------|-----------|--------|---------------------------------------------------------------|--------|-----------|----------------------------------|--------|--------|----------------------|--------|--------|----------------|-----------|
| Commercial                     |   |                                                                  |      |   |                                                               |   |      |                                  |   |   |                      |   |   |                |      |
|    Real estate  |   | $                                                                | 808,000   |   |                                                          | $      | 2,578,000 |                             |   | $      | 2,273,000            |   |   | $              | -         |   |   | $ | 5,659,000 |   |
|    Construction |   |                                                             | 33,000    |   |                                                          |   | 332,000   |                             |   |   | 293,000              |   |   |           | -         |   |   |   | 658,000 |   |
|    Other        |   |                                                             | 402,000   |   |                                                          |   | 883,000   |                             |   |   | 778,000              |   |   |           | -         |   |   |   | 2,063,000 |   |
| Municipal                      |   |                                                             | -         |   |                                                          |   | -         |                             |   |   | 19,000               |   |   |           | -         |   |   |   | 19,000 |   |
| Residential                    |   |                                                             |      |   |                                                          |   |      |                             |   |   |                 |   |   |           |      |   |   |   |   |   |
|    Term         |   |                                                             | 478,000   |   |                                                          |   | 222,000   |                             |   |   | 459,000              |   |   |           | -         |   |   |   | 1,159,000 |   |
|    Construction |   |                                                             | 235,000   |   |                                                          |   | 6,000     |                             |   |   | 14,000               |   |   |           | -         |   |   |   | 255,000 |   |
| Home equity line of credit     |   |                                                             | 91,000    |   |                                                          |   | 149,000   |                             |   |   | 355,000              |   |   |           | -         |   |   |   | 595,000 |   |
| Consumer                       |   |                                                             | 11,000    |   |                                                          |   | 331,000   |                             |   |   | 242,000              |   |   |           | -         |   |   |   | 584,000 |   |
| Unallocated                    |   |                                                             | -         |   |                                                          |   | -         |                             |   |   | -                    |   |   |           | 2,008,000 |   |   |   | 2,008,000 |   |
|                           |   | $                                                                | 2,058,000 |   |                                                          | $      | 4,501,000 |                             |   | $      | 4,433,000            |   |   | $              | 2,008,000 |   |   | $ | 13,000,000 |   |

----

|  As of June 30, 2011      |   | Specific Reserves on Loans Evaluated Individually for Impairment |      |   | General Reserves on Loans Based on Historical Loss Experience |   |      | Reserves for Qualitative Factors |   |   | UnallocatedReserves |   |   | Total Reserves |      |
|--------------------------------|--------|------------------------------------------------------------------|-----------|--------|---------------------------------------------------------------|--------|-----------|----------------------------------|--------|--------|---------------------|--------|--------|----------------|-----------|
| Commercial                     |   |                                                                  |      |   |                                                               |   |      |                                  |   |   |                     |   |   |                |      |
|    Real estate  |   | $                                                                | 613,000   |   |                                                          | $      | 2,463,000 |                             |   | $      | 3,851,000           |   |   | $              | -         |   |   | $ | 6,927,000 |   |
|    Construction |   |                                                             | -         |   |                                                          |   | 274,000   |                             |   |   | 428,000             |   |   |           | -         |   |   |   | 702,000 |   |
|    Other        |   |                                                             | 857,000   |   |                                                          |   | 962,000   |                             |   |   | 1,504,000           |   |   |           | -         |   |   |   | 3,323,000 |   |
| Municipal                      |   |                                                             | -         |   |                                                          |   | -         |                             |   |   | 19,000              |   |   |           | -         |   |   |   | 19,000 |   |
| Residential                    |   |                                                             |      |   |                                                          |   |      |                             |   |   |                |   |   |           |      |   |   |   |   |   |
|    Term         |   |                                                             | 265,000   |   |                                                          |   | 505,000   |                             |   |   | 586,000             |   |   |           | -         |   |   |   | 1,356,000 |   |
|    Construction |   |                                                             | -         |   |                                                          |   | 16,000    |                             |   |   | 19,000              |   |   |           | -         |   |   |   | 35,000 |   |
| Home equity line of credit     |   |                                                             | 165,000   |   |                                                          |   | 85,000    |                             |   |   | 402,000             |   |   |           | -         |   |   |   | 652,000 |   |
| Consumer                       |   |                                                             | 65,000    |   |                                                          |   | 264,000   |                             |   |   | 335,000             |   |   |           | -         |   |   |   | 664,000 |   |
| Unallocated                    |   |                                                             | -         |   |                                                          |   | -         |                             |   |   | -                   |   |   |           | 1,356,000 |   |   |   | 1,356,000 |   |
|                           |   | $                                                                | 1,965,000 |   |                                                          | $      | 4,569,000 |                             |   | $      | 7,144,000           |   |   | $              | 1,356,000 |   |   | $ | 15,034,000 |   |

----

|            |   | CommercialReal Estate |        |   | CommercialConstruction |   |       | CommercialOther |   |   | MunicipalLoans |   |   | All Risk-Rated Loans |       |
|-----------------|--------|-----------------------|-------------|--------|------------------------|--------|------------|-----------------|--------|--------|----------------|--------|--------|----------------------|------------|
| 1 Strong        |   | $                     | 21,000      |   |                   | $      | -          |            |   | $      | 284,000        |   |   | $                    | 1,822,000  |   |   | $ | 2,127,000 |   |
| 2 Above Average |   |                  | 19,319,000  |   |                   |   | 170,000    |            |   |   | 4,601,000      |   |   |                 | 7,933,000  |   |   |   | 32,023,000 |   |
| 3 Satisfactory  |   |                  | 36,207,000  |   |                   |   | 1,751,000  |            |   |   | 13,541,000     |   |   |                 | 3,770,000  |   |   |   | 55,269,000 |   |
| 4 Average       |   |                  | 99,855,000  |   |                   |   | 20,932,000 |            |   |   | 32,700,000     |   |   |                 | 2,564,000  |   |   |   | 156,051,000 |   |
| 5 Watch         |   |                  | 41,089,000  |   |                   |   | 1,969,000  |            |   |   | 21,147,000     |   |   |                 | -          |   |   |   | 64,205,000 |   |
| 6 OAEM          |   |                  | 21,135,000  |   |                   |   | 1,649,000  |            |   |   | 4,357,000      |   |   |                 | -          |   |   |   | 27,141,000 |   |
| 7 Substandard   |   |                  | 34,931,000  |   |                   |   | 6,601,000  |            |   |   | 11,111,000     |   |   |                 | -          |   |   |   | 52,643,000 |   |
| 8 Doubtful      |   |                  | 636,000     |   |                   |   | -          |            |   |   | 92,000         |   |   |                 | -          |   |   |   | 728,000 |   |
| Total           |   | $                     | 253,193,000 |   |                   | $      | 33,072,000 |            |   | $      | 87,833,000     |   |   | $                    | 16,089,000 |   |   | $ | 390,187,000 |   |

----

|            |   | CommercialReal Estate |        |   | CommercialConstruction |   |       | CommercialOther |   |   | MunicipalLoans |   |   | All Risk-Rated Loans |       |
|-----------------|--------|-----------------------|-------------|--------|------------------------|--------|------------|-----------------|--------|--------|----------------|--------|--------|----------------------|------------|
| 1 Strong        |   | $                     | 23,000      |   |                   | $      | -          |            |   | $      | 465,000        |   |   | $                    | 2,158,000  |   |   | $ | 2,646,000 |   |
| 2 Above Average |   |                  | 21,334,000  |   |                   |   | -          |            |   |   | 4,229,000      |   |   |                 | 7,509,000  |   |   |   | 33,072,000 |   |
| 3 Satisfactory  |   |                  | 33,119,000  |   |                   |   | 1,365,000  |            |   |   | 10,981,000     |   |   |                 | 3,861,000  |   |   |   | 49,326,000 |   |
| 4 Average       |   |                  | 106,171,000 |   |                   |   | 17,125,000 |            |   |   | 31,600,000     |   |   |                 | 2,693,000  |   |   |   | 157,589,000 |   |
| 5 Watch         |   |                  | 44,215,000  |   |                   |   | 3,287,000  |            |   |   | 17,893,000     |   |   |                 | -          |   |   |   | 65,395,000 |   |
| 6 OAEM          |   |                  | 18,309,000  |   |                   |   | 2,320,000  |            |   |   | 5,303,000      |   |   |                 | -          |   |   |   | 25,932,000 |   |
| 7 Substandard   |   |                  | 31,575,000  |   |                   |   | 7,323,000  |            |   |   | 16,362,000     |   |   |                 | -          |   |   |   | 55,260,000 |   |
| 8 Doubtful      |   |                  | 678,000     |   |                   |   | 1,154,000  |            |   |   | 149,000        |   |   |                 | -          |   |   |   | 1,981,000 |   |
|  Total     |   | $                     | 255,424,000 |   |                   | $      | 32,574,000 |            |   | $      | 86,982,000     |   |   | $                    | 16,221,000 |   |   | $ | 391,201,000 |   |
|            |   | CommercialReal Estate |        |   | CommercialConstruction |   |       | CommercialOther |   |   | MunicipalLoans |   |   | All Risk-Rated Loans |       |
|-----------------|--------|-----------------------|-------------|--------|------------------------|--------|------------|-----------------|--------|--------|----------------|--------|--------|----------------------|------------|
| 1 Strong        |   | $                     | 29,000      |   |                   | $      | -          |            |   | $      | 467,000        |   |   | $                    | 2,341,000  |   |   | $ | 2,837,000 |   |
| 2 Above Average |   |                  | 21,021,000  |   |                   |   | 10,000     |            |   |   | 3,657,000      |   |   |                 | 10,772,000 |   |   |   | 35,460,000 |   |
| 3 Satisfactory  |   |                  | 40,346,000  |   |                   |   | 1,616,000  |            |   |   | 15,714,000     |   |   |                 | 3,985,000  |   |   |   | 61,661,000 |   |
| 4 Average       |   |                  | 114,124,000 |   |                   |   | 12,894,000 |            |   |   | 41,208,000     |   |   |                 | 2,876,000  |   |   |   | 171,102,000 |   |
| 5 Watch         |   |                  | 38,095,000  |   |                   |   | 6,293,000  |            |   |   | 15,042,000     |   |   |                 | -          |   |   |   | 59,430,000 |   |
| 6 OAEM          |   |                  | 19,572,000  |   |                   |   | 4,015,000  |            |   |   | 6,338,000      |   |   |                 | -          |   |   |   | 29,925,000 |   |
| 7 Substandard   |   |                  | 30,150,000  |   |                   |   | 4,558,000  |            |   |   | 20,067,000     |   |   |                 | -          |   |   |   | 54,775,000 |   |
| 8 Doubtful      |   |                  | -           |   |                   |   | -          |            |   |   | 6,000          |   |   |                 | -          |   |   |   | 6,000 |   |
|  Total     |   | $                     | 263,337,000 |   |                   | $      | 29,386,000 |            |   | $      | 102,499,000    |   |   | $                    | 19,974,000 |   |   | $ | 415,196,000 |   |

----

|                                                 |   | Commercial  |        |   | Municipal    |   |       | Residential |   |   | Home Equity |   |   | Consumer |       |   | Unallocated  |   |        | Total          |   |
|------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|------------|-------------|--------|--------|-------------|--------|--------|----------|------------|--------|--------------|--------|-------------|----------------|--------|
|                                                 |   | Real Estate |        |   | Construction |   |       | Other       |   |   |             |   |   | Term     |       |   | Construction |   |        | Line of Credit |   |   |  |   |   |  |   |   |  |   |
| For the six months ended June 30, 2012               |   |
| Beginning balance                                    |   | $           | 5,659,000   |   |         | $      | 658,000    |        |   | $      | 2,063,000   |   |   | $        | 19,000     |   |         | $      | 1,159,000   |           |   | $ | 255,000 |   |   | $ | 595,000 |   |   | $ | 584,000 |   |   | $ | 2,008,000 |   |   | $ | 13,000,000 |   |
| Charge offs                                          |   |        | 915,000     |   |         |   | -          |        |   |   | 2,162,000   |   |   |     | -          |   |         |   | 375,000     |           |   |   | 118,000 |   |   |   | 49,000 |   |   |   | 276,000 |   |   |   | - |   |   |   | 3,895,000 |   |
| Recoveries                                           |   |        | 1,000       |   |         |   | 246,000    |        |   |   | 11,000      |   |   |     | -          |   |         |   | 2,000       |           |   |   | - |   |   |   | - |   |   |   | 119,000 |   |   |   | - |   |   |   | 379,000 |   |
| Provision                                            |   |        | 819,000     |   |         |   | 469,000    |        |   |   | 2,564,000   |   |   |     | -          |   |         |   | 801,000     |           |   |   | (79,000 | ) |   |   | 263,000 |   |   |   | 176,000 |   |   |   | (113,000 | ) |   |   | 4,900,000 |   |
| Ending balance                                       |   | $           | 5,564,000   |   |         | $      | 1,373,000  |        |   | $      | 2,476,000   |   |   | $        | 19,000     |   |         | $      | 1,587,000   |           |   | $ | 58,000 |   |   | $ | 809,000 |   |   | $ | 603,000 |   |   | $ | 1,895,000 |   |   | $ | 14,384,000 |   |
| For the three months ended June 30, 2012             |   |
| Beginning balance                                    |   | $           | 5,862,000   |   |         | $      | 704,000    |        |   | $      | 2,125,000   |   |   | $        | 19,000     |   |         | $      | 1,236,000   |           |   | $ | 59,000 |   |   | $ | 682,000 |   |   | $ | 568,000 |   |   | $ | 1,699,000 |   |   | $ | 12,954,000 |   |
| Charge offs                                          |   |        | 915,000     |   |         |   | -          |        |   |   | 160,000     |   |   |     | -          |   |         |   | 136,000     |           |   |   | 118,000 |   |   |   | - |   |   |   | 96,000 |   |   |   | - |   |   |   | 1,425,000 |   |
| Recoveries                                           |   |        | 1,000       |   |         |   | -          |        |   |   | 9,000       |   |   |     | -          |   |         |   | 1,000       |           |   |   | - |   |   |   | - |   |   |   | 44,000 |   |   |   | - |   |   |   | 55,000 |   |
| Provision                                            |   |        | 616,000     |   |         |   | 669,000    |        |   |   | 502,000     |   |   |     | -          |   |         |   | 486,000     |           |   |   | 117,000 |   |   |   | 127,000 |   |   |   | 87,000 |   |   |   | 196,000 |   |   |   | 2,800,000 |   |
| Ending balance                                       |   | $           | 5,564,000   |   |         | $      | 1,373,000  |        |   | $      | 2,476,000   |   |   | $        | 19,000     |   |         | $      | 1,587,000   |           |   | $ | 58,000 |   |   | $ | 809,000 |   |   | $ | 603,000 |   |   | $ | 1,895,000 |   |   | $ | 14,384,000 |   |
| Allowance for loan losses as of June 30, 2012        |   |
| Ending balance specifically evaluated for impairment |   | $           | 1,133,000   |   |         | $      | 787,000    |        |   | $      | 932,000     |   |   | $        | -          |   |         | $      | 966,000     |           |   | $ | 48,000 |   |   | $ | 300,000 |   |   | $ | 11,000 |   |   | $ | - |   |   | $ | 4,177,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 4,431,000   |   |         | $      | 586,000    |        |   | $      | 1,544,000   |   |   | $        | 19,000     |   |         | $      | 621,000     |           |   | $ | 10,000 |   |   | $ | 509,000 |   |   | $ | 592,000 |   |   | $ | 1,895,000 |   |   | $ | 10,207,000 |   |
| Related loan balances as of June 30, 2012            |   |
| Ending balance                                       |   | $           | 253,193,000 |   |         | $      | 33,072,000 |        |   | $      | 87,833,000  |   |   | $        | 16,089,000 |   |         | $      | 368,876,000 |           |   | $ | 6,449,000 |   |   | $ | 100,689,000 |   |   | $ | 15,613,000 |   |   | $ | - |   |   | $ | 881,814,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 13,795,000  |   |         | $      | 3,619,000  |        |   | $      | 4,100,000   |   |   | $        | -          |   |         | $      | 19,052,000  |           |   | $ | 1,336,000 |   |   | $ | 1,456,000 |   |   | $ | 16,000 |   |   | $ | - |   |   | $ | 43,374,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 239,398,000 |   |         | $      | 29,453,000 |        |   | $      | 83,733,000  |   |   | $        | 16,089,000 |   |         | $      | 349,824,000 |           |   | $ | 5,113,000 |   |   | $ | 99,233,000 |   |   | $ | 15,597,000 |   |   | $ | - |   |   | $ | 838,440,000 |   |
|                                                 |   | Commercial  |        |   | Municipal    |   |       | Residential |   |   | Home Equity |   |   | Consumer |       |   | Unallocated  |   |        | Total          |   |
|------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|------------|-------------|--------|--------|-------------|--------|--------|----------|------------|--------|--------------|--------|-------------|----------------|--------|
|                                                 |   | Real Estate |        |   | Construction |   |       | Other       |   |   |             |   |   | Term     |       |   | Construction |   |        | Line of Credit |   |   |  |   |   |  |   |   |  |   |
| Allowance for loan losses as of December 31, 2011    |   |
| Ending balance specifically evaluated for impairment |   | $           | 808,000     |   |         | $      | 33,000     |        |   | $      | 402,000     |   |   | $        | -          |   |         | $      | 478,000     |           |   | $ | 235,000 |   |   | $ | 91,000 |   |   | $ | 11,000 |   |   | $ | - |   |   | $ | 2,058,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 4,851,000   |   |         | $      | 625,000    |        |   | $      | 1,661,000   |   |   | $        | 19,000     |   |         | $      | 681,000     |           |   | $ | 20,000 |   |   | $ | 504,000 |   |   | $ | 573,000 |   |   | $ | 2,008,000 |   |   | $ | 10,942,000 |   |
| Related loan balances as of December 31, 2011        |   |
| Ending balance                                       |   | $           | 255,424,000 |   |         | $      | 32,574,000 |        |   | $      | 86,982,000  |   |   | $        | 16,221,000 |   |         | $      | 341,286,000 |           |   | $ | 10,469,000 |   |   | $ | 105,244,000 |   |   | $ | 16,788,000 |   |   | $ | - |   |   | $ | 864,988,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 10,141,000  |   |         | $      | 5,702,000  |        |   | $      | 7,042,000   |   |   | $        | -          |   |         | $      | 16,821,000  |           |   | $ | 1,198,000 |   |   | $ | 1,163,000 |   |   | $ | 53,000 |   |   | $ | - |   |   | $ | 42,120,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 245,283,000 |   |         | $      | 26,872,000 |        |   | $      | 79,940,000  |   |   | $        | 16,221,000 |   |         | $      | 324,465,000 |           |   | $ | 9,271,000 |   |   | $ | 104,081,000 |   |   | $ | 16,735,000 |   |   | $ | - |   |   | $ | 822,868,000 |   |

----

|                                                 |   | Commercial  |        |   | Municipal    |   |       | Residential |   |   | Home Equity |   |   | Consumer |       |   | Unallocated  |   |        | Total          |   |
|------------------------------------------------------|--------|-------------|-------------|--------|--------------|--------|------------|-------------|--------|--------|-------------|--------|--------|----------|------------|--------|--------------|--------|-------------|----------------|--------|
|                                                 |   | Real Estate |        |   | Construction |   |       | Other       |   |   |             |   |   | Term     |       |   | Construction |   |        | Line of Credit |   |   |  |   |   |  |   |   |  |   |
| For the six months ended June 30, 2011               |   |
| 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                                          |   |        | 835,000     |   |         |   | -          |        |   |   | 319,000     |   |   |     | -          |   |         |   | 697,000     |           |   |   | 505,000 |   |   |   | 45,000 |   |   |   | 169,000 |   |   |   | - |   |   |   | 2,570,000 |   |
| Recoveries                                           |   |        | 5,000       |   |         |   | -          |        |   |   | 20,000      |   |   |     | -          |   |         |   | 4,000       |           |   |   | - |   |   |   | 1,000 |   |   |   | 158,000 |   |   |   | - |   |   |   | 188,000 |   |
| Provision                                            |   |        | 2,497,000   |   |         |   | (310,000   | )           |   |   | 1,245,000   |   |   |     | -          |   |         |   | 641,000     |           |   |   | 496,000 |   |   |   | 26,000 |   |   |   | 29,000 |   |   |   | (524,000 | ) |   |   | 4,100,000 |   |
| Ending balance                                       |   | $           | 6,927,000   |   |         | $      | 702,000    |        |   | $      | 3,323,000   |   |   | $        | 19,000     |   |         | $      | 1,356,000   |           |   | $ | 35,000 |   |   | $ | 652,000 |   |   | $ | 664,000 |   |   | $ | 1,356,000 |   |   | $ | 15,034,000 |   |
| For the three months ended June 30, 2011             |   |
| Beginning 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 |   |
| Charge offs                                          |   |        | 546,000     |   |         |   | -          |        |   |   | 158,000     |   |   |     | -          |   |         |   | 240,000     |           |   |   | - |   |   |   | 44,000 |   |   |   | 69,000 |   |   |   | - |   |   |   | 1,057,000 |   |
| Recoveries                                           |   |        | -           |   |         |   | -          |        |   |   | 3,000       |   |   |     | -          |   |         |   | 1,000       |           |   |   | - |   |   |   | 1,000 |   |   |   | 86,000 |   |   |   | - |   |   |   | 91,000 |   |
| Provision                                            |   |        | 1,163,000   |   |         |   | 63,000     |        |   |   | 943,000     |   |   |     | -          |   |         |   | 190,000     |           |   |   | (111,000 | ) |   |   | 17,000 |   |   |   | (66,000 | ) |   |   | (199,000 | ) |   |   | 2,000,000 |   |
| Ending balance                                       |   | $           | 6,927,000   |   |         | $      | 702,000    |        |   | $      | 3,323,000   |   |   | $        | 19,000     |   |         | $      | 1,356,000   |           |   | $ | 35,000 |   |   | $ | 652,000 |   |   | $ | 664,000 |   |   | $ | 1,356,000 |   |   | $ | 15,034,000 |   |
| Allowance for loan losses as of June 30, 2011        |   |
| Ending balance specifically evaluated for impairment |   | $           | 613,000     |   |         | $      | -          |        |   | $      | 857,000     |   |   | $        | -          |   |         | $      | 265,000     |           |   | $ | - |   |   | $ | 165,000 |   |   | $ | 65,000 |   |   | $ | - |   |   | $ | 1,965,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 6,314,000   |   |         | $      | 702,000    |        |   | $      | 2,466,000   |   |   | $        | 19,000     |   |         | $      | 1,091,000   |           |   | $ | 35,000 |   |   | $ | 487,000 |   |   | $ | 599,000 |   |   | $ | 1,356,000 |   |   | $ | 13,069,000 |   |
| Related loan balances as of June 30, 2011            |   |
| Ending balance                                       |   | $           | 263,337,000 |   |         | $      | 29,386,000 |        |   | $      | 102,499,000 |   |   | $        | 19,974,000 |   |         | $      | 335,807,000 |           |   | $ | 11,063,000 |   |   | $ | 107,224,000 |   |   | $ | 17,639,000 |   |   | $ | - |   |   | $ | 886,929,000 |   |
| Ending balance specifically evaluated for impairment |   | $           | 6,746,000   |   |         | $      | 772,000    |        |   | $      | 2,095,000   |   |   | $        | -          |   |         | $      | 16,191,000  |           |   | $ | 334,000 |   |   | $ | 740,000 |   |   | $ | 103,000 |   |   | $ | - |   |   | $ | 26,981,000 |   |
| Ending balance collectively evaluated for impairment |   | $           | 256,591,000 |   |         | $      | 28,614,000 |        |   | $      | 100,404,000 |   |   | $        | 19,974,000 |   |         | $      | 319,616,000 |           |   | $ | 10,729,000 |   |   | $ | 106,484,000 |   |   | $ | 17,536,000 |   |   | $ | - |   |   | $ | 859,948,000 |   |

----

| · | 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 Company has granted a concession; common concession types include maturity date extension, interest rate adjustments to below market pricing, and deferment of payments. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                           |   | Number of Loans |   |   | Balance |   |       | Specific Reserves |   |
|--------------------------------|--------|-----------------|--------|--------|---------|--------|------------|-------------------|--------|
| Commercial                     |   |                 |   |   |         |   |       |                   |   |
|    Real estate  |   |            | 17     |   |    | $      | 9,216,000  |              |   | $ | 496,000 |   |
|    Construction |   |            | 2      |   |    |   | 3,099,000  |              |   |   | 696,000 |   |
|    Other        |   |            | 15     |   |    |   | 1,984,000  |              |   |   | 590,000 |   |
| Municipal                      |   |            | -      |   |    |   | -          |              |   |   | - |   |
| Residential                    |   |            |   |   |    |   |       |              |   |   |   |   |
|    Term         |   |            | 48     |   |    |   | 10,681,000 |              |   |   | 327,000 |   |
|    Construction |   |            | -      |   |    |   | -          |              |   |   | - |   |
| Home equity line of credit     |   |            | -      |   |    |   | -          |              |   |   | - |   |
| Consumer                       |   |            | -      |   |    |   | -          |              |   |   | - |   |
|                           |   |            | 82     |   |    | $      | 24,980,000 |              |   | $ | 2,109,000 |   |
|                           |   | Number of Loans |   |   | Balance |   |      | Specific Reserves |   |
|--------------------------------|--------|-----------------|--------|--------|---------|--------|-----------|-------------------|--------|
| Commercial                     |   |                 |   |   |         |   |      |                   |   |
|    Real estate  |   |            | 1      |   |    | $      | 269,000   |              |   | $ | 111,000 |   |
|    Construction |   |            | -      |   |    |   | -         |              |   |   | - |   |
|    Other        |   |            | 3      |   |    |   | 180,000   |              |   |   | - |   |
| Municipal                      |   |            | -      |   |    |   | -         |              |   |   | - |   |
| Residential                    |   |            |   |   |    |   |      |              |   |   |   |   |
|    Term         |   |            | 9      |   |    |   | 2,038,000 |              |   |   | 92,000 |   |
|    Construction |   |            | -      |   |    |   | -         |              |   |   | - |   |
| Home equity line of credit     |   |            | -      |   |    |   | -         |              |   |   | - |   |
| Consumer                       |   |            | -      |   |    |   | -         |              |   |   | - |   |
|                           |   |            | 13     |   |    | $      | 2,487,000 |              |   | $ | 203,000 |   |

----

|                           |   | Number of Loans |   |   | Pre-ModificationOutstandingRecorded Investment |   |      | Post-Modification OutstandingRecordedInvestment |   |   | Specific Reserves |   |
|--------------------------------|--------|-----------------|--------|--------|------------------------------------------------|--------|-----------|-------------------------------------------------|--------|--------|-------------------|--------|
| Commercial                     |   |                 |   |   |                                                |   |      |                                                 |   |   |                   |   |
|    Real estate  |   |            | 12     |   |                                           | $      | 3,845,000 |                                            |   | $      | 4,032,000         |   |   | $ | 152,000 |   |
|    Construction |   |            | 1      |   |                                           |   | 1,951,000 |                                            |   |   | 1,951,000         |   |   |   | 696,000 |   |
|    Other        |   |            | 9      |   |                                           |   | 712,000   |                                            |   |   | 713,000           |   |   |   | 544,000 |   |
| Municipal                      |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
| Residential                    |   |            |   |   |                                           |   |      |                                            |   |   |              |   |   |   |   |   |
|    Term         |   |            | 7      |   |                                           |   | 1,411,000 |                                            |   |   | 1,411,000         |   |   |   | 76,000 |   |
|    Construction |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
| Home equity line of credit     |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
| Consumer                       |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
|                           |   |            | 29     |   |                                           | $      | 7,919,000 |                                            |   | $      | 8,107,000         |   |   | $ | 1,468,000 |   |
|                           |   | Number of Loans |   |   | Pre-ModificationOutstandingRecorded Investment |   |      | Post-Modification OutstandingRecordedInvestment |   |   | Specific Reserves |   |
|--------------------------------|--------|-----------------|--------|--------|------------------------------------------------|--------|-----------|-------------------------------------------------|--------|--------|-------------------|--------|
| Commercial                     |   |                 |   |   |                                                |   |      |                                                 |   |   |                   |   |
|    Real estate  |   |            | 5      |   |                                           | $      | 1,449,000 |                                            |   | $      | 1,598,000         |   |   | $ | 152,000 |   |
|    Construction |   |            | 1      |   |                                           |   | 1,951,000 |                                            |   |   | 1,951,000         |   |   |   | 696,000 |   |
|    Other        |   |            | 6      |   |                                           |   | 700,000   |                                            |   |   | 701,000           |   |   |   | 545,000 |   |
| Municipal                      |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
| Residential                    |   |            |   |   |                                           |   |      |                                            |   |   |              |   |   |   |   |   |
|    Term         |   |            | 3      |   |                                           |   | 855,000   |                                            |   |   | 855,000           |   |   |   | 61,000 |   |
|    Construction |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
| Home equity line of credit     |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
| Consumer                       |   |            | -      |   |                                           |   | -         |                                            |   |   | -                 |   |   |   | - |   |
|                           |   |            | 15     |   |                                           | $      | 4,955,000 |                                            |   | $      | 5,105,000         |   |   | $ | 1,454,000 |   |

----

| YearGranted | Vesting Term(In Years) | Shares | Remaining Term(In Years) |
|-------------|------------------------|--------|--------------------------|
| 2011        | 4.0                    | 1,500  | 2.6                      |
| 2011        | 5.0                    | 5,500  | 3.6                      |
| 2012        | 3.0                    | 2,027  | 2.7                      |
| 2012        | 4.0                    | 2,704  | 3.7                      |
| 2012        | 5.0                    | 7,996  | 4.7                      |
|        |                   | 19,727 | 3.9                      |
|                                            |   | Number of Shares |   |   | Weighted Average Exercise Price |   |   | Weighted Average Remaining Contractual Term (In years) |   |   | Aggregate Intrinsic Value(In thousands) |   |
|-------------------------------------------------|--------|------------------|--------|--------|---------------------------------|--------|--------|--------------------------------------------------------|--------|--------|-----------------------------------------|--------|
| Outstanding at December 31, 2011                |   |             | 51,000 |   |                            | $      | 16.47  |                                                   |   |        |                                    |   |  |   |
|      Granted in 2012   |   |             | -      |   |                            |   | -      |                                                   |   |        |                                    |   |  |   |
|      Exercised in 2012 |   |             | (9,000 | )      |                            | $      | 9.33   |                                                   |   |        |                                    |   | $ | 59,000 |   |
|      Forfeited in 2012 |   |             | -      |   |                            |   | -      |                                                   |   |        |                                    |   |   |   |   |
| Outstanding at June 30, 2012                    |   |             | 42,000 |   |                            | $      | 18.00  |                                                   |   |   | 2.6                                     |   |   |   | - |   |
| Exercisable at June 30, 2012                    |   |             | 42,000 |   |                            | $      | 18.00  |                                                   |   |   | 2.6                                     |   |   |   | - |   |

----

----

|                                                                          |   | Income      |      |   | Shares        |   |      | Per-Share |   |
|-------------------------------------------------------------------------------|--------|-------------|-----------|--------|---------------|--------|-----------|-----------|--------|
|                                                                          |   | (Numerator) |      |   | (Denominator) |   |      | Amount    |   |
| For the six months ended June 30, 2012                                        |   |             |      |   |               |   |      |           |   |
| Net income as reported                                                        |   | $           | 6,236,000 |   |          |        |      |      |        |   |
| Less dividends and amortization of premium on preferred stock                 |   |        | 362,000   |   |          |        |      |      |        |   |
| Basic EPS: Income available to common shareholders                            |   |        | 5,874,000 |   |          |   | 9,822,437 |      |   | $ | 0.60 |   |
| Effect of dilutive securities: restricted stock                               |   |        |      |   |          |   | 15,461    |      |   |   |   |   |
| Diluted EPS: Income available to common shareholders plus assumed conversions |   | $           | 5,874,000 |   |          |   | 9,837,898 |      |   | $ | 0.60 |   |
| For the six months ended June 30, 2011                                        |   |        |      |   |          |   |      |      |   |   |   |   |
| Net income as reported                                                        |   | $           | 6,336,000 |   |          |   |      |      |   |   |   |   |
| Less dividends and amortization of premium on preferred stock                 |   |        | 674,000   |   |          |   |      |      |   |   |   |   |
| Basic EPS: Income available to common shareholders                            |   |        | 5,662,000 |   |          |   | 9,781,766 |      |   | $ | 0.58 |   |
| Effect of dilutive securities:incentive stock options and restricted stock    |   |        |      |   |          |   | 10,399    |      |   |   |   |   |
| Diluted EPS: Income available to common shareholders plus assumed conversions |   | $           | 5,662,000 |   |          |   | 9,792,165 |      |   | $ | 0.58 |   |
|                                                                          |   | Income      |      |   | Shares        |   |      | Per-Share |   |
|-------------------------------------------------------------------------------|--------|-------------|-----------|--------|---------------|--------|-----------|-----------|--------|
|                                                                          |   | (Numerator) |      |   | (Denominator) |   |      | Amount    |   |
| For the quarter ended June 30, 2012                                           |   |             |      |   |               |   |      |           |   |
| Net income as reported                                                        |   | $           | 3,323,000 |   |          |        |      |      |        |   |
| Less dividends and amortization of premium on preferred stock                 |   |        | 181,000   |   |          |        |      |      |        |   |
| Basic EPS: Income available to common shareholders                            |   |        | 3,142,000 |   |          |   | 9,824,568 |      |   | $ | 0.32 |   |
| Effect of dilutive securities: restricted stock                               |   |        |      |   |          |   | 19,727    |      |   |   |   |   |
| Diluted EPS: Income available to common shareholders plus assumed conversions |   | $           | 3,142,000 |   |          |   | 9,844,295 |      |   | $ | 0.32 |   |
| For the quarter ended June 30, 2011                                           |   |        |      |   |          |   |      |      |   |   |   |   |
| Net income as reported                                                        |   | $           | 3,193,000 |   |          |   |      |      |   |   |   |   |
| Less dividends and amortization of premium on preferred stock                 |   |        | 337,000   |   |          |   |      |      |   |   |   |   |
| Basic EPS: Income available to common shareholders                            |   |        | 2,856,000 |   |          |   | 9,784,743 |      |   | $ | 0.29 |   |
| Effect of dilutive securities: incentive stock options and restricted stock   |   |        |      |   |          |   | 12,238    |      |   |   |   |   |
| Diluted EPS: Income available to common shareholders plus assumed conversions |   | $           | 2,856,000 |   |          |   | 9,796,981 |      |   | $ | 0.29 |   |

----

|                             | Outstanding | In-the-Money | Out-of-the-Money |
|----------------------------------|-------------|--------------|------------------|
| As of June 30, 2012              |        |         |             |
| Incentive stock options          | 42,000      | -            | 42,000           |
| Warrants issued to U.S. Treasury | 225,904     | -            | 225,904          |
| Total                            | 267,904     | -            | 267,904          |
| As of June 30, 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          |

----

|                                    |   | At or for the six months ended June 30, |       |
|-----------------------------------------|--------|-----------------------------------------|------------|
|                                    |   |                                    | 2012       |   |   |   | 2011 |   |
| Change in benefit obligation            |   |                                    |       |   |   |   |   |   |
| Benefit obligation at beginning of year |   | $                                       | 1,848,000  |   |   | $ | 1,796,000 |   |
| Service cost                            |   |                                    | 34,000     |   |   |   | 8,000 |   |
| Interest cost                           |   |                                    | 56,000     |   |   |   | 58,000 |   |
| Benefits paid                           |   |                                    | (68,000    | ) |   |   | (78,000 | ) |
| Benefit obligation at end of period     |   |                                    | 1,870,000  |   |   |   | 1,784,000 |   |
| Funded status                           |   |                                    |       |   |   |   |   |   |
| Benefit obligation at end of period     |   |                                    | (1,870,000 | ) |   |   | (1,784,000 | ) |
| Accrued benefit cost at end of period   |   | $                                       | (1,870,000 | ) |   | $ | (1,784,000 | ) |
|                                               |   | For six months endedJune 30, |    |   | For quarters ended June 30, |   |
|----------------------------------------------------|--------|------------------------------|---------|--------|-----------------------------|--------|
|                                               |   |                         | 2012    |   |                        |   | 2011 |   |   |   | 2012 |   |   |   | 2011 |   |
| Components of net periodic benefit cost            |   |                         |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                       |   | $                            | 34,000  |   |                        | $      | 8,000 |   |   | $ | 17,000 |   |   | $ | 4,000 |   |
| Interest cost                                      |   |                         | 56,000  |   |                        |   | 58,000 |   |   |   | 28,000 |   |   |   | 29,000 |   |
| Amortization of unrecognized transition obligation |   |                         | 14,000  |   |                        |   | 14,000 |   |   |   | 7,000 |   |   |   | 7,000 |   |
| Amortization of accumulated losses                 |   |                         | 6,000   |   |                        |   | 10,000 |   |   |   | 3,000 |   |   |   | 5,000 |   |
| Net periodic benefit cost                          |   | $                            | 110,000 |   |                        | $      | 90,000 |   |   | $ | 55,000 |   |   | $ | 45,000 |   |
|                                                                                               |   | June 30,2012 |     |   | December 31,2011 |   |     | June 30,2011 |   |
|----------------------------------------------------------------------------------------------------|--------|--------------|----------|--------|------------------|--------|----------|--------------|--------|
| Unamortized net actuarial loss                                                                     |   | $            | (100,000 | )      |             | $      | (100,000 | )            |   | $ | (49,000 | ) |
| Unrecognized transition obligation                                                                 |   |         | (20,000  | )      |             |   | (34,000  | )            |   |   | (49,000 | ) |
|                                                                                               |   |         | (120,000 | )      |             |   | (134,000 | )            |   |   | (98,000 | ) |
| Deferred tax benefit at 35%                                                                        |   |         | 43,000   |   |             |   | 47,000   |         |   |   | 35,000 |   |
| Net unrecognized postretirement benefits included in accumulated other comprehensive income (loss) |   | $            | (77,000  | )      |             | $      | (87,000  | )            |   | $ | (63,000 | ) |
|                                                      |  For six months endedJune 30, |  For the quarters endedJune 30, |
|-----------------------------------------------------------|------------------------------------|--------------------------------------|
|                                                      | 2012                               | 2011                                 | 2012 | 2011 |
| Unrecognized transition obligation at beginning of period | (87,000)                           | (73,000)                             | (82,000) | (68,000) |
| Amortization of unrecognized transition obligation        | 14,000                             | 14,000                               | 7,000 | 7,000 |
| Related deferred taxes                                    | (4,000)                            | (4,000)                              | (2,000) | (2,000) |
| Unrecognized transition obligation at end of period       | (77,000)                           | (63,000)                             | (77,000) | (63,000) |

----

|                      |   | June 30,2012 |       |   | December 31,2011 |   |       | June 30,2011 |   |
|---------------------------|--------|--------------|------------|--------|------------------|--------|------------|--------------|--------|
| Mortgage servicing rights |   | $            | 6,177,000  |   |             | $      | 6,099,000  |         |   | $ | 5,987,000 |   |
| Accumulated amortization  |   |         | (5,170,000 | )      |             |   | (4,837,000 | )            |   |   | (4,537,000 | ) |
| Impairment reserve        |   |         | (177,000   | )      |             |   | (61,000    | )            |   |   | (58,000 | ) |
|                      |   | $            | 830,000    |   |             | $      | 1,201,000  |         |   | $ | 1,392,000 |   |

----

|                                  |   | June 30, 2012 |        |   | December 31, 2011 |   |        | June 30, 2011 |   |
|---------------------------------------|--------|---------------|-------------|--------|-------------------|--------|-------------|---------------|--------|
| Certificates of deposit < $100,000 |   | $             | 239,635,000 |   |              | $      | 216,836,000 |          |   | $ | 279,567,000 |   |
| Certificates $100,000 to $250,000     |   |          | 313,742,000 |   |              |   | 309,841,000 |          |   |   | 319,122,000 |   |
| Certificates $250,000 and over        |   |          | 60,501,000  |   |              |   | 22,499,000  |          |   |   | 34,609,000 |   |
|                                  |   | $             | 613,878,000 |   |              | $      | 549,176,000 |          |   | $ | 633,298,000 |   |

----

|                                               |   | At June 30, 2012 |   |
|----------------------------------------------------|--------|------------------|--------|
|                                               |   | Level 1          |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Securities available for sale                      |   |                  |   |   |  |   |   |  |   |   |  |   |
|    U.S. Treasury and agency         |   | $                | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|    Mortgage-backed securities       |   |             | -      |   |   |   | 206,979,000 |   |   |   | - |   |   |   | 206,979,000 |   |
|    State and political subdivisions |   |             | -      |   |   |   | 98,593,000 |   |   |   | - |   |   |   | 98,593,000 |   |
|    Corporate Securities             |   |             | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Other equity securities          |   |             | -      |   |   |   | 1,775,000 |   |   |   | - |   |   |   | 1,775,000 |   |
| Total assets                                       |   | $                | -      |   |   | $ | 307,347,000 |   |   | $ | - |   |   | $ | 307,347,000 |   |
|                                               |   | At December 31, 2011 |   |
|----------------------------------------------------|--------|----------------------|--------|
|                                               |   | Level 1              |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Securities available for sale                      |   |                      |   |   |  |   |   |  |   |   |  |   |
|    U.S. Treasury and agency         |   | $                    | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|    Mortgage-backed securities       |   |                 | -      |   |   |   | 198,232,000 |   |   |   | - |   |   |   | 198,232,000 |   |
|    State and political subdivisions |   |                 | -      |   |   |   | 85,726,000 |   |   |   | - |   |   |   | 85,726,000 |   |
|    Corporate securities             |   |                 | -      |   |   |   | 811,000 |   |   |   | - |   |   |   | 811,000 |   |
|    Other equity securities          |   |                 | -      |   |   |   | 1,433,000 |   |   |   | - |   |   |   | 1,433,000 |   |
| Total assets                                       |   | $                    | -      |   |   | $ | 286,202,000 |   |   | $ | - |   |   | $ | 286,202,000 |   |
|                                               |   | At June 30, 2011 |   |
|----------------------------------------------------|--------|------------------|--------|
|                                               |   | Level 1          |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Securities available for sale                      |   |                  |   |   |  |   |   |  |   |   |  |   |
|    U.S. Treasury and agency         |   | $                | -      |   |   | $ | 16,123,000 |   |   | $ | - |   |   | $ | 16,123,000 |   |
|    Mortgage-backed securities       |   |             | -      |   |   |   | 221,524,000 |   |   |   | - |   |   |   | 221,524,000 |   |
|    State and political subdivisions |   |             | -      |   |   |   | 65,162,000 |   |   |   | - |   |   |   | 65,162,000 |   |
|    Corporate securities             |   |             | -      |   |   |   | 936,000 |   |   |   | - |   |   |   | 936,000 |   |
|    Other equity securities          |   |             | -      |   |   |   | 533,000 |   |   |   | - |   |   |   | 533,000 |   |
| Total assets                                       |   | $                | -      |   |   | $ | 304,278,000 |   |   | $ | - |   |   | $ | 304,278,000 |   |

----

|                      |   | At June 30, 2012 |   |
|---------------------------|--------|------------------|--------|
|                      |   | Level 1          |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Mortgage servicing rights |   | $                | -      |   |   | $ | 1,075,000 |   |   | $ | - |   |   | $ | 1,075,000 |   |
| Loans held for sale       |   |             | -      |   |   |   | 378,000 |   |   |   | - |   |   |   | 378,000 |   |
| Other real estate owned   |   |             | -      |   |   |   | 5,188,000 |   |   |   | - |   |   |   | 5,188,000 |   |
| Impaired loans            |   |             | -      |   |   |   | 14,734,000 |   |   |   | - |   |   |   | 14,734,000 |   |
| Total assets              |   | $                | -      |   |   | $ | 21,375,000 |   |   | $ | - |   |   | $ | 21,375,000 |   |
|                      |   | At December 31, 2011 |   |
|---------------------------|--------|----------------------|--------|
|                      |   | Level 1              |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Mortgage servicing rights |   | $                    | -      |   |   | $ | 1,581,000 |   |   | $ | - |   |   | $ | 1,581,000 |   |
| Loans held for sale       |   |                 | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other real estate owned   |   |                 | -      |   |   |   | 4,094,000 |   |   |   | - |   |   |   | 4,094,000 |   |
| Impaired loans            |   |                 | -      |   |   |   | 12,165,000 |   |   |   | - |   |   |   | 12,165,000 |   |
| Total assets              |   | $                    | -      |   |   | $ | 17,840,000 |   |   | $ | - |   |   | $ | 17,840,000 |   |
|                      |   | At June 30, 2011 |   |
|---------------------------|--------|------------------|--------|
|                      |   | Level 1          |   |   | Level 2 |   |   | Level 3 |   |   | Total |   |
| Mortgage servicing rights |   | $                | -      |   |   | $ | 1,962,000 |   |   | $ | - |   |   | $ | 1,962,000 |   |
| Loans held for sale       |   |             | -      |   |   |   | 419,000 |   |   |   | - |   |   |   | 419,000 |   |
| Other real estate owned   |   |             | -      |   |   |   | 7,723,000 |   |   |   | - |   |   |   | 7,723,000 |   |
| Impaired loans            |   |             | -      |   |   |   | 5,648,000 |   |   |   | - |   |   |   | 5,648,000 |   |
| Total assets              |   | $                | -      |   |   | $ | 15,752,000 |   |   | $ | - |   |   | $ | 15,752,000 |   |

----

|                                     |   | Carrying |          |   | Estimated  |   |        |         |   |   |            |   |   |         |        |
|------------------------------------------|--------|----------|---------------|--------|------------|--------|-------------|---------|--------|--------|------------|--------|--------|---------|-------------|
|                                     |   | value    |          |   | fair value |   |        | Level 1 |   |   | Level 2    |   |   | Level 3 |        |
| Financial assets                         |   |          |          |   |            |   |        |         |   |   |            |   |   |         |        |
| Cash and cash equivalents                |   | $        | 14,192,000    |   |       | $      | 14,192,000  |    |   | $      | 14,192,000 |   |   | $       | -           |   |   | $ | - |   |
| Interest bearing deposits in other banks |   |     | -             |   |       |   | -           |    |   |   | -          |   |   |    | -           |   |   |   | - |   |
| Securities available for sale            |   |     | 307,347,000   |   |       |   | 307,347,000 |    |   |   | -          |   |   |    | 307,347,000 |   |   |   | - |   |
| Securities to be held to maturity        |   |     | 135,775,000   |   |       |   | 143,628,000 |    |   |   | -          |   |   |    | 143,628,000 |   |   |   | - |   |
| Restricted equity securities             |   |     | 14,448,000    |   |       |   | 14,448,000  |    |   |   | -          |   |   |    | 14,448,000  |   |   |   | - |   |
| Loans held for sale                      |   |     | 378,000       |   |       |   | 378,000     |    |   |   | -          |   |   |    | 378,000     |   |   |   | - |   |
| Loans (net of allowance for loan losses) |   |     |          |   |       |   |        |    |   |   |       |   |   |    |        |   |   |   |   |   |
| Commercial                               |   |     |          |   |       |   |        |    |   |   |       |   |   |    |        |   |   |   |   |   |
|    Real estate            |   |     | 246,597,000   |   |       |   | 247,044,000 |    |   |   | -          |   |   |    | 2,349,000   |   |   |   | 244,695,000 |   |
|    Construction           |   |     | 31,507,000    |   |       |   | 31,564,000  |    |   |   | -          |   |   |    | 1,368,000   |   |   |   | 30,196,000 |   |
|    Other                  |   |     | 84,952,000    |   |       |   | 85,322,000  |    |   |   | -          |   |   |    | 919,000     |   |   |   | 84,403,000 |   |
| Municipal                                |   |     | 16,068,000    |   |       |   | 17,640,000  |    |   |   | -          |   |   |    | -           |   |   |   | 17,640,000 |   |
| Residential                              |   |     |          |   |       |   |        |    |   |   |       |   |   |    |        |   |   |   |   |   |
|    Term                   |   |     | 367,152,000   |   |       |   | 380,115,000 |    |   |   | -          |   |   |    | 9,391,000   |   |   |   | 370,724,000 |   |
|    Construction           |   |     | 6,386,000     |   |       |   | 6,380,000   |    |   |   | -          |   |   |    | 286,000     |   |   |   | 6,094,000 |   |
| Home equity line of credit               |   |     | 99,810,000    |   |       |   | 100,546,000 |    |   |   | -          |   |   |    | 416,000     |   |   |   | 100,130,000 |   |
| Consumer                                 |   |     | 14,958,000    |   |       |   | 15,868,000  |    |   |   | -          |   |   |    | 5,000       |   |   |   | 15,863,000 |   |
| Total loans                              |   |     | 867,430,000   |   |       |   | 884,479,000 |    |   |   | -          |   |   |    | 14,734,000  |   |   |   | 869,745,000 |   |
| Mortgage servicing rights                |   |     | 830,000       |   |       |   | 1,075,000   |    |   |   | -          |   |   |    | 1,075,000   |   |   |   | - |   |
| Accrued interest receivable              |   |     | 6,024,000     |   |       |   | 6,024,000   |    |   |   | -          |   |   |    | 6,024,000   |   |   |   | - |   |
| Financial liabilities                    |   |     |          |   |       |   |        |    |   |   |       |   |   |    |        |   |   |   |   |   |
| Demand deposits                          |   | $        | 77,019,000    |   |       | $      | 77,250,000  |    |   | $      | -          |   |   | $       | 77,250,000  |   |   | $ | - |   |
| NOW deposits                             |   |     | 123,897,000   |   |       |   | 117,571,000 |    |   |   | -          |   |   |    | 117,571,000 |   |   |   | - |   |
| Money market deposits                    |   |     | 71,009,000    |   |       |   | 62,251,000  |    |   |   | -          |   |   |    | 62,251,000  |   |   |   | - |   |
| Savings deposits                         |   |     | 119,471,000   |   |       |   | 110,169,000 |    |   |   | -          |   |   |    | 110,169,000 |   |   |   | - |   |
| Local certificates of deposit            |   |     | 212,845,000   |   |       |   | 218,300,000 |    |   |   | -          |   |   |    | 218,300,000 |   |   |   | - |   |
| National certificates of deposit         |   |     | 401,033,000   |   |       |   | 405,539,000 |    |   |   | -          |   |   |    | 405,539,000 |   |   |   | - |   |
| Total deposits                           |   |     | 1,005,274,000 |   |       |   | 991,080,000 |    |   |   | -          |   |   |    | 991,080,000 |   |   |   | - |   |
| Repurchase agreements                    |   |     | 90,537,000    |   |       |   | 90,537,000  |    |   |   | -          |   |   |    | 90,537,000  |   |   |   | - |   |
| Federal Home Loan Bank advances          |   |     | 158,389,000   |   |       |   | 166,535,000 |    |   |   | -          |   |   |    | 166,535,000 |   |   |   | - |   |
| Total borrowed funds                     |   |     | 248,926,000   |   |       |   | 257,072,000 |    |   |   | -          |   |   |    | 257,072,000 |   |   |   | - |   |
| Accrued interest payable                 |   |     | 608,000       |   |       |   | 608,000     |    |   |   | -          |   |   |    | 608,000     |   |   |   | - |   |

----

|                                     |   | December 31, 2011 |        |   | June 30, 2011 |   |
|------------------------------------------|--------|-------------------|-------------|--------|---------------|--------|
|                                     |   | Carrying          |        |   | Estimated     |   |   | Carrying |   |   | Estimated |   |
|                                     |   | amount            |        |   | fair value    |   |   | amount |   |   | fair value |   |
| Financial assets                         |   |                   |        |   |               |   |   |  |   |   |  |   |
| Cash and cash equivalents                |   | $                 | 14,115,000  |   |          | $      | 14,115,000 |   |   | $ | 14,322,000 |   |   | $ | 14,322,000 |   |
| Interest-bearing deposits in other banks |   |              | -           |   |          |   | - |   |   |   | 100,000 |   |   |   | 100,000 |   |
| Securities available for sale            |   |              | 286,202,000 |   |          |   | 286,202,000 |   |   |   | 304,278,000 |   |   |   | 304,278,000 |   |
| Securities to be held to maturity        |   |              | 122,661,000 |   |          |   | 130,677,000 |   |   |   | 122,970,000 |   |   |   | 128,426,000 |   |
| Restricted equity securities             |   |              | 15,443,000  |   |          |   | 15,443,000 |   |   |   | 15,443,000 |   |   |   | 15,443,000 |   |
| Loans held for sale                      |   |              | -           |   |          |   | - |   |   |   | 419,000 |   |   |   | 419,000 |   |
| Loans (net of allowance for loan losses) |   |              | 851,988,000 |   |          |   | 866,442,000 |   |   |   | 871,895,000 |   |   |   | 875,988,000 |   |
| Mortgage servicing rights                |   |              | 1,201,000   |   |          |   | 1,581,000 |   |   |   | 1,392,000 |   |   |   | 1,962,000 |   |
| Accrued interest receivable              |   |              | 4,835,000   |   |          |   | 4,835,000 |   |   |   | 6,511,000 |   |   |   | 6,511,000 |   |
| Financial liabilities                    |   |              |        |   |          |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                 |   | $                 | 941,333,000 |   |          | $      | 921,388,000 |   |   | $ | 998,838,000 |   |   | $ | 953,240,000 |   |
| Borrowed funds                           |   |              | 265,663,000 |   |          |   | 273,568,000 |   |   |   | 249,336,000 |   |   |   | 256,037,000 |   |
| Accrued interest payable                 |   |              | 734,000     |   |          |   | 734,000 |   |   |   | 855,000 |   |   |   | 855,000 |   |

----

----

----

----

----

|                                |   | For the six months endedJune 30, |   |   | For the quarters endedJune 30, |   |
|-------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
| Dollars in thousands                |   |                             | 2012   |   |                           |   | 2011 |   |   |   | 2012 |   |   |   | 2011 |   |
| Net interest income as presented    |   | $                                | 19,724 |   |                           | $      | 20,728 |   |   | $ | 9,918 |   |   | $ | 10,223 |   |
| Effect of tax-exempt income         |   |                             | 1,527  |   |                           |   | 1,272 |   |   |   | 763 |   |   |   | 663 |   |
| Net interest income, tax equivalent |   | $                                | 21,251 |   |                           | $      | 22,000 |   |   | $ | 10,681 |   |   | $ | 10,886 |   |
|                                                  |   | For the six months endedJune 30, |   |   | For the quarters endedJune 30, |   |
|-------------------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
| Dollars in thousands                                  |   |                             | 2012   |   |                           |   | 2011 |   |   |   | 2012 |   |   |   | 2011 |   |
| Non-interest expense, as presented                    |   | $                                | 12,908 |   |                           | $      | 12,738 |   |   | $ | 6,730 |   |   | $ | 6,250 |   |
| Net interest income, as presented                     |   | $                                | 19,724 |   |                           | $      | 20,728 |   |   | $ | 9,918 |   |   | $ | 10,223 |   |
| Effect of tax-exempt income                           |   |                             | 1,527  |   |                           |   | 1,272 |   |   |   | 763 |   |   |   | 663 |   |
| Non-interest income, as presented                     |   |                             | 6,064  |   |                           |   | 4,511 |   |   |   | 3,896 |   |   |   | 2,234 |   |
| Effect of non-interest tax-exempt income              |   |                             | 91     |   |                           |   | 94 |   |   |   | 48 |   |   |   | 47 |   |
| Net securities gains                                  |   |                             | (1,967 | )      |                           |   | (229 | ) |   |   | (1,444 | ) |   |   | (229 | ) |
| Adjusted net interest income plus non-interest income |   | $                                | 25,439 |   |                           | $      | 26,376 |   |   | $ | 13,181 |   |   | $ | 12,938 |   |
| Non-GAAP efficiency ratio                             |   |                             | 50.74  | %      |                           |   | 48.29 | % |   |   | 51.06 | % |   |   | 48.30 | % |
| GAAP efficiency ratio                                 |   |                             | 50.05  | %      |                           |   | 50.47 | % |   |   | 48.72 | % |   |   | 50.17 | % |

----

|                                      |   | For the six months endedJune 30, |    |   | For the quarters endedJune 30, |   |
|-------------------------------------------|--------|----------------------------------|---------|--------|--------------------------------|--------|
|  Dollars in thousands                |   |                             | 2012    |   |                           |   | 2011 |   |   |   | 2012 |   |   |   | 2011 |   |
| Average shareholders' equity as presented |   | $                                | 154,187 |   |                           | $      | 153,747 |   |   | $ | 154,831 |   |   | $ | 155,678 |   |
|   Less preferred stock          |   |                             | (12,317 | )      |                           |   | (24,705 | ) |   |   | (12,329 | ) |   |   | (24,730 | ) |
|   Less intangible assets        |   |                             | (27,684 | )      |                           |   | (27,684 | ) |   |   | (27,684 | ) |   |   | (27,684 | ) |
| Tangible average shareholders' equity     |   | $                                | 114,186 |   |                           | $      | 101,358 |   |   | $ | 114,818 |   |   | $ | 103,264 |   |

----

----

|                                                 |   | For the six months ended |   |
|------------------------------------------------------|--------|--------------------------|--------|
|                                                 |   | June 30, 2012            |   |   | June 30, 2011 |   |
| Dollars in thousands                                 |   | Amount of interest       |   |   | Average Yield/Rate |   |   | Amount of interest |   |   | Average Yield/Rate |   |
| Interest on earning assets                           |   |                          |   |   |  |   |   |  |   |   |  |   |
| Interest-bearing deposits                            |   | $                        | 1      |   |   |   | 0.16 | % |   | $ | - |   |   |   | 0.20 | % |
| Investments                                          |   |                     | 8,829  |   |   |   | 3.83 | % |   |   | 9,205 |   |   |   | 4.17 | % |
| Loans held for sale                                  |   |                     | 4      |   |   |   | 3.41 | % |   |   | 22 |   |   |   | 4.21 | % |
| Loans                                                |   |                     | 18,932 |   |   |   | 4.35 | % |   |   | 20,296 |   |   |   | 4.58 | % |
|    Total interest-earning assets      |   |                     | 27,766 |   |   |   | 4.17 | % |   |   | 29,523 |   |   |   | 4.44 | % |
| Interest-bearing liabilities                         |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                             |   |                     | 4,297  |   |   |   | 0.93 | % |   |   | 5,081 |   |   |   | 1.07 | % |
| Other borrowings                                     |   |                     | 2,218  |   |   |   | 1.77 | % |   |   | 2,442 |   |   |   | 2.11 | % |
|    Total interest-bearing liabilities |   |                     | 6,515  |   |   |   | 1.11 | % |   |   | 7,523 |   |   |   | 1.27 | % |
| Net interest income                                  |   | $                        | 21,251 |   |   |   |   |   |   | $ | 22,000 |   |   |   |   |   |
| Interest rate spread                                 |   |                     |   |   |   |   | 3.06 | % |   |   |   |   |   |   | 3.17 | % |
| Net interest margin                                  |   |                     |   |   |   |   | 3.19 | % |   |   |   |   |   |   | 3.31 | % |
|                                                 |   | For the quarters ended |   |
|------------------------------------------------------|--------|------------------------|--------|
|                                                 |   | June 30, 2012          |   |   | June 30, 2011 |   |
| Dollars in thousands                                 |   | Amount of interest     |   |   | Average Yield/Rate |   |   | Amount of interest |   |   | Average Yield/Rate |   |
| Interest on earning assets                           |   |                        |   |   |  |   |   |  |   |   |  |   |
| Interest-bearing deposits                            |   | $                      | 1      |   |   |   | 0.68 | % |   | $ | - |   |   |   | 0.40 | % |
| Investments                                          |   |                   | 4,444  |   |   |   | 3.74 | % |   |   | 4,609 |   |   |   | 4.01 | % |
| Loans held for sale                                  |   |                   | 4      |   |   |   | 3.97 | % |   |   | 6 |   |   |   | 4.24 | % |
| Loans                                                |   |                   | 9,447  |   |   |   | 4.31 | % |   |   | 10,045 |   |   |   | 4.51 | % |
|    Total interest-earning assets      |   |                   | 13,896 |   |   |   | 4.11 | % |   |   | 14,660 |   |   |   | 4.34 | % |
| Interest-bearing liabilities                         |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                             |   |                   | 2,104  |   |   |   | 0.90 | % |   |   | 2,518 |   |   |   | 1.05 | % |
| Other borrowings                                     |   |                   | 1,111  |   |   |   | 1.71 | % |   |   | 1,256 |   |   |   | 2.10 | % |
|    Total interest-bearing liabilities |   |                   | 3,215  |   |   |   | 1.08 | % |   |   | 3,774 |   |   |   | 1.26 | % |
| Net interest income                                  |   | $                      | 10,681 |   |   |   |   |   |   | $ | 10,886 |   |   |   |   |   |
| Interest rate spread                                 |   |                   |   |   |   |   | 3.03 | % |   |   |   |   |   |   | 3.08 | % |
| Net interest margin                                  |   |                   |   |   |   |   | 3.16 | % |   |   |   |   |   |   | 3.22 | % |

----

| For the six months ended June 30, 2012 compared to 2011 |   |   |        |   |   |        |   |
|---------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Dollars in thousands                                    |   | Volume |   |   | Rate   |   |   | Rate/Volume1 |   |   | Total |   |
| Interest on earning assets                              |   |        |   |   |        |   |   |  |   |   |  |   |
| Interest-bearing deposits                               |   | $      | 1      |   |   | $      | -      |   |   | $ | - |   |   | $ | 1 |   |
| Investment securities                                   |   |   | 373    |   |   |   | (720   | ) |   |   | (29 | ) |   |   | (376 | ) |
| Loans held for sale                                     |   |   | (17    | )      |   |   | (4     | ) |   |   | 3 |   |   |   | (18 | ) |
| Loans                                                   |   |   | (415   | )      |   |   | (968   | ) |   |   | 19 |   |   |   | (1,364 | ) |
|    Total interest income                 |   |   | (58    | )      |   |   | (1,692 | ) |   |   | (7 | ) |   |   | (1,757 | ) |
| Interest expense                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                |   |   | (159   | )      |   |   | (645   | ) |   |   | 20 |   |   |   | (784 | ) |
| Other borrowings                                        |   |   | 204    |   |   |   | (395   | ) |   |   | (33 | ) |   |   | (224 | ) |
|    Total interest expense                |   |   | 45     |   |   |   | (1,040 | ) |   |   | (13 | ) |   |   | (1,008 | ) |
|    Change in net interest income         |   | $      | (103   | )      |   | $      | (652   | ) |   | $ | 6 |   |   | $ | (749 | ) |
| For the quarters ended June 30, 2012 compared to 2011 |   |   |        |   |   |        |   |
|-------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
| Dollars in thousands                                  |   | Volume |   |   | Rate   |   |   | Rate/Volume1 |   |   | Total |   |
| Interest on earning assets                            |   |        |   |   |        |   |   |  |   |   |  |   |
| Interest-bearing deposits                             |   | $      | 1      |   |   | $      | -      |   |   | $ | - |   |   | $ | 1 |   |
| Investment securities                                 |   |   | 164    |   |   |   | (318   | ) |   |   | (11 | ) |   |   | (165 | ) |
| Loans held for sale                                   |   |   | (1     | )      |   |   | -      |   |   |   | (1 | ) |   |   | (2 | ) |
| Loans                                                 |   |   | (133   | )      |   |   | (472   | ) |   |   | 7 |   |   |   | (598 | ) |
|    Total interest income               |   |   | 31     |   |   |   | (790   | ) |   |   | (5 | ) |   |   | (764 | ) |
| Interest expense                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                              |   |   | (65    | )      |   |   | (358   | ) |   |   | 9 |   |   |   | (414 | ) |
| Other borrowings                                      |   |   | 111    |   |   |   | (235   | ) |   |   | (21 | ) |   |   | (145 | ) |
| Total interest expense                                |   |   | 46     |   |   |   | (593   | ) |   |   | (12 | ) |   |   | (559 | ) |
|    Change in net interest income       |   | $      | (15    | )      |   | $      | (197   | ) |   | $ | 7 |   |   | $ | (205 | ) |

----

|                                                                                   |   | For thesix months ended |      |   | For thequarters ended |   |
|----------------------------------------------------------------------------------------|--------|-------------------------|-----------|--------|-----------------------|--------|
|  Dollars in thousands                                                             |   | June 30, 2012           |      |   | June 30, 2011         |   |   | June 30,2012 |   |   | June 30, 2011 |   |
| Assets                                                                                 |   |                         |      |   |                       |   |   |  |   |   |  |   |
| Cash and cash equivalents                                                              |   | $                       | 12,725    |   |                  | $      | 15,339 |   |   | $ | 13,103 |   |   | $ | 14,479 |   |
| Time deposits in other banks                                                           |   |                    | 1,219     |   |                  |   | 100 |   |   |   | 590 |   |   |   | 100 |   |
| Securities available for sale                                                          |   |                    | 312,113   |   |                  |   | 321,200 |   |   |   | 319,358 |   |   |   | 333,275 |   |
| Securities to be held to maturity                                                      |   |                    | 136,169   |   |                  |   | 108,525 |   |   |   | 143,686 |   |   |   | 112,513 |   |
| Restricted equity securities, at cost                                                  |   |                    | 14,948    |   |                  |   | 15,443 |   |   |   | 14,609 |   |   |   | 15,443 |   |
| Loans held for sale (fair value approximates cost)                                     |   |                    | 236       |   |                  |   | 1,054 |   |   |   | 405 |   |   |   | 568 |   |
| Loans                                                                                  |   |                    | 875,496   |   |                  |   | 893,787 |   |   |   | 881,767 |   |   |   | 893,508 |   |
| Allowance for loan losses                                                              |   |                    | (13,154   | )      |                  |   | (14,180 | ) |   |   | (13,399 | ) |   |   | (14,505 | ) |
|      Net loans                                                |   |                    | 862,342   |   |                  |   | 879,607 |   |   |   | 868,368 |   |   |   | 879,003 |   |
| Accrued interest receivable                                                            |   |                    | 5,220     |   |                  |   | 5,491 |   |   |   | 5,549 |   |   |   | 5,698 |   |
| Premises and equipment                                                                 |   |                    | 18,760    |   |                  |   | 18,725 |   |   |   | 18,650 |   |   |   | 18,565 |   |
| Other real estate owned                                                                |   |                    | 4,429     |   |                  |   | 5,401 |   |   |   | 4,640 |   |   |   | 5,797 |   |
| Goodwill                                                                               |   |                    | 27,684    |   |                  |   | 27,684 |   |   |   | 27,684 |   |   |   | 27,684 |   |
| Other assets                                                                           |   |                    | 26,493    |   |                  |   | 28,244 |   |   |   | 26,210 |   |   |   | 27,966 |   |
|         Total Assets                           |   | $                       | 1,422,338 |   |                  | $      | 1,426,813 |   |   | $ | 1,442,852 |   |   | $ | 1,441,091 |   |
|                                                                                   |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities & Shareholders' Equity                                                 |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                                        |   | $                       | 71,140    |   |                  | $      | 69,488 |   |   | $ | 70,739 |   |   | $ | 68,674 |   |
| NOW deposits                                                                           |   |                    | 121,356   |   |                  |   | 120,930 |   |   |   | 122,165 |   |   |   | 119,625 |   |
| Money market deposits                                                                  |   |                    | 76,178    |   |                  |   | 72,436 |   |   |   | 73,880 |   |   |   | 69,388 |   |
| Savings deposits                                                                       |   |                    | 117,716   |   |                  |   | 105,472 |   |   |   | 119,085 |   |   |   | 107,162 |   |
| Certificates of deposit                                                                |   |                    | 614,538   |   |                  |   | 661,072 |   |   |   | 625,593 |   |   |   | 669,455 |   |
|      Total deposits                                           |   |                    | 1,000,928 |   |                  |   | 1,029,398 |   |   |   | 1,011,462 |   |   |   | 1,034,304 |   |
| Borrowed funds - short term                                                            |   |                    | 118,767   |   |                  |   | 102,738 |   |   |   | 118,767 |   |   |   | 109,896 |   |
| Borrowed funds - long term                                                             |   |                    | 133,556   |   |                  |   | 130,166 |   |   |   | 142,436 |   |   |   | 130,166 |   |
| Dividends payable                                                                      |   |                    | 948       |   |                  |   | 980 |   |   |   | 871 |   |   |   | 984 |   |
| Other liabilities                                                                      |   |                    | 13,952    |   |                  |   | 9,784 |   |   |   | 14,485 |   |   |   | 10,063 |   |
|      Total Liabilities                                        |   |                    | 1,268,151 |   |                  |   | 1,273,066 |   |   |   | 1,288,021 |   |   |   | 1,285,413 |   |
| Shareholders' Equity:                                                                  |   |                    |      |   |                  |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock                                                                        |   |                    | 12,317    |   |                  |   | 24,705 |   |   |   | 12,329 |   |   |   | 24,730 |   |
| Common stock                                                                           |   |                    | 98        |   |                  |   | 98 |   |   |   | 98 |   |   |   | 98 |   |
| Additional paid-in capital                                                             |   |                    | 46,023    |   |                  |   | 45,536 |   |   |   | 46,077 |   |   |   | 45,609 |   |
| Retained earnings                                                                      |   |                    | 87,403    |   |                  |   | 83,755 |   |   |   | 88,149 |   |   |   | 84,324 |   |
| Net unrealized gain/(loss) on securities available-for-sale                            |   |                    | 8,428     |   |                  |   | (280 | ) |   |   | 8,257 |   |   |   | 982 |   |
| Net unrealized loss on postretirement benefit costs                                    |   |                    | (82       | )      |                  |   | (67 | ) |   |   | (79 | ) |   |   | (65 | ) |
|     Total Shareholders' Equity                                     |   |                    | 154,187   |   |                  |   | 153,747 |   |   |   | 154,831 |   |   |   | 155,678 |   |
|        Total Liabilities & Shareholders' Equity |   | $                       | 1,422,338 |   |                  | $      | 1,426,813 |   |   | $ | 1,442,852 |   |   | $ | 1,441,091 |   |

----

----

| Dollars in thousands              |   | June 30, 2012 |    |   | December 31, 2011 |    |    | June 30, 2011 |   |
|-----------------------------------|--------|---------------|---------|--------|-------------------|---------|---------|---------------|--------|
| Securities available for sale     |   |               |    |   |                   |    |    |               |   |
| U.S. Treasury and agency          |   | $             | -       |   |              | $       | -       |          |   | $ | 16,123 |   |
| Mortgage-backed securities        |   |          | 206,979 |   |              |    | 198,232 |          |   |   | 221,524 |   |
| State and political subdivisions  |   |          | 98,593  |   |              |    | 85,726  |          |   |   | 65,162 |   |
| Corporate securities              |   |          | -       |   |              |    | 811     |          |   |   | 936 |   |
| Other equity securities           |   |          | 1,775   |   |              |    | 1,433   |          |   |   | 533 |   |
|                              |   | $             | 307,347 |   |              | $  | 286,202 |          |   | $ | 304,278 |   |
| Securities to be held to maturity |   |          |    |   |              |    |    |          |   |   |   |   |
| U.S. Treasury and agency          |   | $             | 41,197  |   |              | $       | 19,390  |          |   | $ | 12,970 |   |
| Mortgage-backed securities        |   |          | 49,992  |   |              |    | 56,800  |          |   |   | 60,836 |   |
| State and political subdivisions  |   |          | 44,286  |   |              |    | 46,171  |          |   |   | 48,864 |   |
| Corporate securities              |   |          | 300     |   |              |    | 300     |          |   |   | 300 |   |
|                              |   | $             | 135,775 |   |              | $       | 122,661 |          |   | $ | 122,970 |   |
| Restricted equity securities      |   |          |    |   |              |    |    |          |   |   |   |   |
| Federal Home Loan Bank Stock      |   | $             | 13,412  |   |              | $       | 14,031  |          |   | $ | 14,031 |   |
| Federal Reserve Bank Stock        |   |          | 1,036   |   |              |    | 1,412   |          |   |   | 1,412 |   |
|                              |   | $             | 14,448  |   |              | $       | 15,443  |          |   | $ | 15,443 |   |
| Total securities                  |   | $             | 457,570 |   |              | $       | 424,306 |          |   | $ | 442,691 |   |

----

|                                     |   | 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                 |   |               | -       |   |              |   | 0.00 | % |   |   | 41,197 |   |   |   | 3.38 | % |
|   Total                        |   |               | -       |   |              |   |   |   |   |   | 41,197 |   |   |   | 3.38 | % |
|  Mortgage-Backed Securities         |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  Due in 1 year or less              |   |               | 3,312   |   |              |   | 3.67 | % |   |   | 12 |   |   |   | 0.07 | % |
|  Due in 1 to 5 years                |   |               | 54,572  |   |              |   | 3.26 | % |   |   | 8,344 |   |   |   | 3.61 | % |
|  Due in 5 to 10 years               |   |               | 22,898  |   |              |   | 2.77 | % |   |   | 5,599 |   |   |   | 3.92 | % |
|  Due after 10 years                 |   |               | 126,197 |   |              |   | 2.21 | % |   |   | 36,037 |   |   |   | 4.49 | % |
|   Total                        |   |               | 206,979 |   |              |   | 2.57 | % |   |   | 49,992 |   |   |   | 4.28 | % |
|  State & Political Subdivisions |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  Due in 1 year or less              |   |               | 1,016   |   |              |   | 6.90 | % |   |   | 1,370 |   |   |   | 5.96 | % |
|  Due in 1 to 5 years                |   |               | 1,786   |   |              |   | 6.90 | % |   |   | 4,912 |   |   |   | 6.54 | % |
|  Due in 5 to 10 years               |   |               | 1,136   |   |              |   | 6.17 | % |   |   | 15,538 |   |   |   | 6.30 | % |
|  Due after 10 years                 |   |               | 94,655  |   |              |   | 5.96 | % |   |   | 22,466 |   |   |   | 6.27 | % |
|   Total                        |   |               | 98,593  |   |              |   | 5.99 | % |   |   | 44,286 |   |   |   | 6.30 | % |
|  Corporate Securities               |   |               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|  Due in 1 year or less              |   |               | -       |   |              |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
|  Due in 1 to 5 years                |   |               | -       |   |              |   | 0.00 | % |   |   | 300 |   |   |   | 1.25 | % |
|  Due in 5 to 10 years               |   |               | -       |   |              |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
|  Due after 10 years                 |   |               | -       |   |              |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |
|   Total                        |   |               | -       |   |              |   |   |   |   |   | 300 |   |   |   | 1.25 | % |
|  Equity Securities                  |   |               | 1,775   |   |              |   | 1.33 | % |   |   |   |   |   |   |   |   |
|                                     |   | $                  | 307,347 |   |              |   | 3.66 | % |   | $ | 135,775 |   |   |   | 4.66 | % |

----

|                             |   | Less than 12 months |   |   | 12 months or more |   |   | Total  |   |
|----------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|--------|--------|
|                             |   | Fair                |   |   | Unrealized        |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
| Dollars in thousands             |   | Value               |   |   | Losses            |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| U.S. Treasury and agency         |   | $                   | 7,942  |   |              | $      | (33    | )      |   | $ | - |   |   | $ | - |   |   | $ | 7,942 |   |   | $ | (33 | ) |
| Mortgage-backed securities       |   |                | 9,822  |   |              |   | (110   | )      |   |   | 5,137 |   |   |   | (148 | ) |   |   | 14,959 |   |   |   | (258 | ) |
| State and political subdivisions |   |                | 3,719  |   |              |   | (51    | )      |   |   | - |   |   |   | - |   |   |   | 3,719 |   |   |   | (51 | ) |
| Corporate securities             |   |                | -      |   |              |   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other equity securities          |   |                | -      |   |              |   | -      |   |   |   | 191 |   |   |   | (135 | ) |   |   | 191 |   |   |   | (135 | ) |
|                             |   | $                   | 21,483 |   |              | $      | (194   | )      |   | $ | 5,328 |   |   | $ | (283 | ) |   | $ | 26,811 |   |   | $ | (477 | ) |

----

----

| Dollars in thousands           |   | June 30, 2012 |    |   | December 31, 2011 |   |   | June 30, 2011 |   |
|--------------------------------|--------|---------------|---------|--------|-------------------|--------|--------|---------------|--------|
| Commercial                     |   |               |    |   |                   |   |   |               |   |   |  |   |   |  |   |   |  |   |
|    Real estate  |   | $             | 253,193 |   |              |   | 28.7   | %             |   | $ | 255,424 |   |   |   | 29.5 | % |   | $ | 263,337 |   |   |   | 29.7 | % |
|    Construction |   |          | 33,072  |   |              |   | 3.8    | %             |   |   | 32,574 |   |   |   | 3.8 | % |   |   | 29,386 |   |   |   | 3.3 | % |
|    Other        |   |          | 87,833  |   |              |   | 10.0   | %             |   |   | 86,982 |   |   |   | 10.1 | % |   |   | 102,499 |   |   |   | 11.6 | % |
| Municipal                      |   |          | 16,089  |   |              |   | 1.8    | %             |   |   | 16,221 |   |   |   | 1.9 | % |   |   | 19,974 |   |   |   | 2.3 | % |
| Residential                    |   |          |    |   |              |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |          | 368,876 |   |              |   | 41.8   | %             |   |   | 341,286 |   |   |   | 39.5 | % |   |   | 335,807 |   |   |   | 37.9 | % |
|    Construction |   |          | 6,449   |   |              |   | 0.7    | %             |   |   | 10,469 |   |   |   | 1.2 | % |   |   | 11,063 |   |   |   | 1.2 | % |
| Home equity line of credit     |   |          | 100,689 |   |              |   | 11.4   | %             |   |   | 105,244 |   |   |   | 12.1 | % |   |   | 107,224 |   |   |   | 12.0 | % |
| Consumer                       |   |          | 15,613  |   |              |   | 1.8    | %             |   |   | 16,788 |   |   |   | 1.9 | % |   |   | 17,639 |   |   |   | 2.0 | % |
| Total loans                    |   | $             | 881,814 |   |              |   | 100.0  | %             |   | $ | 864,988 |   |   |   | 100.0 | % |   | $ | 886,929 |   |   |   | 100.0 | % |
| Dollars in thousands           |   | < 1 Year |   |   | 1 - 5 Years |   |   | 5 - 10 Years |   |   | > 10 Years |   |   | Total  |    |
|--------------------------------|--------|-------------|--------|--------|-------------|--------|--------|--------------|--------|--------|---------------|--------|--------|--------|---------|
| Commercial                     |   |             |   |   |             |   |   |              |   |   |               |   |   |        |    |
|    Real estate  |   | $           | 9,695  |   |        | $      | 23,167 |         |   | $      | 17,146        |   |   | $      | 203,185 |   |   | $ | 253,193 |   |
|    Construction |   |        | 7,813  |   |        |   | 3,051  |         |   |   | 296           |   |   |   | 21,912  |   |   |   | 33,072 |   |
|    Other        |   |        | 14,764 |   |        |   | 19,686 |         |   |   | 20,267        |   |   |   | 33,116  |   |   |   | 87,833 |   |
| Municipal                      |   |        | 640    |   |        |   | 3,735  |         |   |   | 5,801         |   |   |   | 5,913   |   |   |   | 16,089 |   |
| Residential                    |   |        |   |   |        |   |   |         |   |   |          |   |   |   |    |   |   |   |   |   |
|    Term         |   |        | 1,148  |   |        |   | 13,045 |         |   |   | 22,924        |   |   |   | 331,759 |   |   |   | 368,876 |   |
|    Construction |   |        | 3,714  |   |        |   | 58     |         |   |   | -             |   |   |   | 2,677   |   |   |   | 6,449 |   |
| Home equity line of credit     |   |        | 1,324  |   |        |   | 344    |         |   |   | 818           |   |   |   | 98,203  |   |   |   | 100,689 |   |
| Consumer                       |   |        | 6,439  |   |        |   | 6,214  |         |   |   | 878           |   |   |   | 2,082   |   |   |   | 15,613 |   |
| Total loans                    |   | $           | 45,537 |   |        | $      | 69,300 |         |   | $      | 68,130        |   |   | $      | 698,847 |   |   | $ | 881,814 |   |
|                           |   | Fixed-Rate |    |   | Adjustable-Rate |   |   | Total  |   |
|--------------------------------|--------|------------|---------|--------|-----------------|--------|--------|--------|--------|
| Dollars in thousands           |   | Amount     |    |   | % of total      |   |   | Amount |   |   | % of total |   |   | Amount |   |   | % of total |   |
| Commercial                     |   |            |    |   |                 |   |   |        |   |   |  |   |   |  |   |   |  |   |
|    Real estate  |   | $          | 44,203  |   |            |   | 5.0    | %      |   | $ | 208,990 |   |   |   | 23.7 | % |   | $ | 253,193 |   |   |   | 28.7 | % |
|    Construction |   |       | 1,087   |   |            |   | 0.1    | %      |   |   | 31,985 |   |   |   | 3.6 | % |   |   | 33,072 |   |   |   | 3.8 | % |
|    Other        |   |       | 31,218  |   |            |   | 3.5    | %      |   |   | 56,615 |   |   |   | 6.4 | % |   |   | 87,833 |   |   |   | 10.0 | % |
| Municipal                      |   |       | 12,998  |   |            |   | 1.5    | %      |   |   | 3,091 |   |   |   | 0.4 | % |   |   | 16,089 |   |   |   | 1.8 | % |
| Residential                    |   |       |    |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |       | 173,885 |   |            |   | 19.7   | %      |   |   | 194,991 |   |   |   | 22.1 | % |   |   | 368,876 |   |   |   | 41.8 | % |
|    Construction |   |       | 2,744   |   |            |   | 0.3    | %      |   |   | 3,705 |   |   |   | 0.4 | % |   |   | 6,449 |   |   |   | 0.7 | % |
| Home equity line of credit     |   |       | 2,053   |   |            |   | 0.2    | %      |   |   | 98,636 |   |   |   | 11.2 | % |   |   | 100,689 |   |   |   | 11.4 | % |
| Consumer                       |   |       | 11,924  |   |            |   | 1.4    | %      |   |   | 3,689 |   |   |   | 0.4 | % |   |   | 15,613 |   |   |   | 1.8 | % |
| Total loans                    |   | $          | 280,112 |   |            |   | 31.7   | %      |   | $ | 601,702 |   |   |   | 68.2 | % |   | $ | 881,814 |   |   |   | 100.0 | % |

----

----

----

| Dollars in thousands           |   | June 30, 2012 |   |   | December 31, 2011 |   |   | June 30, 2011 |   |
|--------------------------------|--------|---------------|--------|--------|-------------------|--------|--------|---------------|--------|
| Commercial                     |   |               |   |   |                   |   |   |               |   |   |  |   |   |  |   |   |  |   |
|    Real estate  |   | $             | 5,564  |   |              |   | 28.7   | %             |   | $ | 5,659 |   |   |   | 29.5 | % |   | $ | 6,927 |   |   |   | 29.7 | % |
|    Construction |   |          | 1,373  |   |              |   | 3.8    | %             |   |   | 658 |   |   |   | 3.8 | % |   |   | 702 |   |   |   | 3.3 | % |
|    Other        |   |          | 2,476  |   |              |   | 10.0   | %             |   |   | 2,063 |   |   |   | 10.1 | % |   |   | 3,323 |   |   |   | 11.6 | % |
| Municipal                      |   |          | 19     |   |              |   | 1.8    | %             |   |   | 19 |   |   |   | 1.9 | % |   |   | 19 |   |   |   | 2.3 | % |
| Residential                    |   |          |   |   |              |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Term         |   |          | 1,587  |   |              |   | 41.8   | %             |   |   | 1,159 |   |   |   | 39.5 | % |   |   | 1,356 |   |   |   | 37.9 | % |
|    Construction |   |          | 58     |   |              |   | 0.7    | %             |   |   | 255 |   |   |   | 1.2 | % |   |   | 35 |   |   |   | 1.2 | % |
| Home equity line of credit     |   |          | 809    |   |              |   | 11.4   | %             |   |   | 595 |   |   |   | 12.1 | % |   |   | 652 |   |   |   | 12.0 | % |
| Consumer                       |   |          | 603    |   |              |   | 1.8    | %             |   |   | 584 |   |   |   | 1.9 | % |   |   | 664 |   |   |   | 2.0 | % |
| Unallocated                    |   |          | 1,895  |   |              |   | 0.0    | %             |   |   | 2,008 |   |   |   | 0.0 | % |   |   | 1,356 |   |   |   | 0.0 | % |
| Total                          |   | $             | 14,384 |   |              |   | 100.0  | %             |   | $ | 13,000 |   |   |   | 100.0 | % |   | $ | 15,034 |   |   |   | 100.0 | % |
|  Dollars in thousands     |   | Specific Reserves on Loans Evaluated Individually for Impairment |   |   | General Reserves Based on Historical Loss Experience |   |   | Reserves for Qualitative Factors |   |   | UnallocatedReserves |   |   | Total Reserves |   |
|--------------------------------|--------|------------------------------------------------------------------|--------|--------|------------------------------------------------------|--------|--------|----------------------------------|--------|--------|---------------------|--------|--------|----------------|--------|
| Commercial                     |   |                                                                  |   |   |                                                      |   |   |                                  |   |   |                     |   |   |                |   |
|    Real estate  |   | $                                                                | 1,133  |   |                                                 | $      | 2,685  |                             |   | $      | 1,746               |   |   | $              | -      |   |   | $ | 5,564 |   |
|    Construction |   |                                                             | 787    |   |                                                 |   | 355    |                             |   |   | 231                 |   |   |           | -      |   |   |   | 1,373 |   |
|    Other        |   |                                                             | 932    |   |                                                 |   | 935    |                             |   |   | 609                 |   |   |           | -      |   |   |   | 2,476 |   |
| Municipal                      |   |                                                             | -      |   |                                                 |   | -      |                             |   |   | 19                  |   |   |           | -      |   |   |   | 19 |   |
| Residential                    |   |                                                             |   |   |                                                 |   |   |                             |   |   |                |   |   |           |   |   |   |   |   |   |
|    Term         |   |                                                             | 966    |   |                                                 |   | 165    |                             |   |   | 456                 |   |   |           | -      |   |   |   | 1,587 |   |
|    Construction |   |                                                             | 48     |   |                                                 |   | 2      |                             |   |   | 8                   |   |   |           | -      |   |   |   | 58 |   |
| Home equity line of credit     |   |                                                             | 300    |   |                                                 |   | 155    |                             |   |   | 354                 |   |   |           | -      |   |   |   | 809 |   |
| Consumer                       |   |                                                             | 11     |   |                                                 |   | 351    |                             |   |   | 241                 |   |   |           | -      |   |   |   | 603 |   |
| Unallocated                    |   |                                                             | -      |   |                                                 |   | -      |                             |   |   | -                   |   |   |           | 1,895  |   |   |   | 1,895 |   |
|                           |   | $                                                                | 4,177  |   |                                                 | $      | 4,648  |                             |   | $      | 3,664               |   |   | $              | 1,895  |   |   | $ | 14,384 |   |

----

| Dollars in thousands                                          |   | June 30,2012 |   |   | December 31,2011 |   |   | June 30,2011 |   |
|---------------------------------------------------------------|--------|--------------|--------|--------|------------------|--------|--------|--------------|--------|
| Balance at beginning of year                                  |   | $            | 13,000 |   |             | $      | 13,316 |         |   | $ | 13,316 |   |
| Loans charged off:                                            |   |         |   |   |             |   |   |         |   |   |   |   |
| Commercial                                                    |   |         |   |   |             |   |   |         |   |   |   |   |
|    Real estate                                 |   |         | 915    |   |             |   | 1,619  |         |   |   | 835 |   |
|    Construction                                |   |         | -      |   |             |   | 346    |         |   |   | - |   |
|    Other                                       |   |         | 2,162  |   |             |   | 6,492  |         |   |   | 319 |   |
| Municipal                                                     |   |         | -      |   |             |   | -      |         |   |   | - |   |
| Residential                                                   |   |         |   |   |             |   |   |         |   |   |   |   |
|    Term                                        |   |         | 375    |   |             |   | 1,421  |         |   |   | 697 |   |
|    Construction                                |   |         | 118    |   |             |   | 505    |         |   |   | 505 |   |
| Home equity line of credit                                    |   |         | 49     |   |             |   | 415    |         |   |   | 45 |   |
| Consumer                                                      |   |         | 276    |   |             |   | 381    |         |   |   | 169 |   |
| Total                                                         |   |         | 3,895  |   |             |   | 11,179 |         |   |   | 2,570 |   |
| Recoveries on loans previously charged off                    |   |         |   |   |             |   |   |         |   |   |   |   |
| Commercial                                                    |   |         |   |   |             |   |   |         |   |   |   |   |
|    Real estate                                 |   |         | 1      |   |             |   | 23     |         |   |   | 5 |   |
|    Construction                                |   |         | 246    |   |             |   | -      |         |   |   | - |   |
|    Other                                       |   |         | 11     |   |             |   | 60     |         |   |   | 20 |   |
| Municipal                                                     |   |         | -      |   |             |   | -      |         |   |   | - |   |
| Residential                                                   |   |         | -      |   |             |   |   |         |   |   |   |   |
|    Term                                        |   |         | 2      |   |             |   | 7      |         |   |   | 4 |   |
|    Construction                                |   |         | -      |   |             |   | -      |         |   |   | - |   |
| Home equity line of credit                                    |   |         | -      |   |             |   | 1      |         |   |   | 1 |   |
| Consumer                                                      |   |         | 119    |   |             |   | 222    |         |   |   | 158 |   |
| Total                                                         |   |         | 379    |   |             |   | 313    |         |   |   | 188 |   |
| Net loans charged off                                         |   |         | 3,516  |   |             |   | 10,866 |         |   |   | 2,382 |   |
| Provision for loan losses                                     |   |         | 4,900  |   |             |   | 10,550 |         |   |   | 4,100 |   |
| Balance at end of period                                      |   | $            | 14,384 |   |             | $      | 13,000 |         |   | $ | 15,034 |   |
| Ratio of net loans charged off to average loans outstanding1  |   |         | 0.81   | %      |             |   | 1.23   | %            |   |   | 0.54 | % |
| Ratio of allowance for loan losses to total loans outstanding |   |         | 1.63   | %      |             |   | 1.50   | %            |   |   | 1.70 | % |

----

| Dollars in thousands                                                                 |   | June 30, 2012 |   |   | December 31, 2011 |   |   | June 30, 2011 |   |
|--------------------------------------------------------------------------------------|--------|---------------|--------|--------|-------------------|--------|--------|---------------|--------|
| Commercial                                                                           |   |               |   |   |                   |   |   |               |   |
|    Real estate                                                        |   | $             | 5,545  |   |              | $      | 7,064  |          |   | $ | 6,746 |   |
|    Construction                                                       |   |          | 521    |   |              |   | 2,350  |          |   |   | 771 |   |
|    Other                                                              |   |          | 2,361  |   |              |   | 5,836  |          |   |   | 2,133 |   |
| Municipal                                                                            |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Residential                                                                          |   |          |   |   |              |   |   |          |   |   |   |   |
|    Term                                                               |   |          | 10,723 |   |              |   | 11,312 |          |   |   | 11,569 |   |
|    Construction                                                       |   |          | 1,336  |   |              |   | 1,198  |          |   |   | 334 |   |
| Home equity line of credit                                                           |   |          | 1,456  |   |              |   | 1,163  |          |   |   | 740 |   |
| Consumer                                                                             |   |          | 180    |   |              |   | 53     |          |   |   | 111 |   |
| Non-performing loans plus loans 90 or more days past due and still accruing interest |   | $             | 22,122 |   |              | $      | 28,976 |          |   | $ | 22,404 |   |
| Non-performing loans included in above total                                         |   | $             | 21,958 |   |              | $      | 27,806 |          |   | $ | 22,049 |   |

----

| · | 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           |   | June 30, 2012 |   |   | December 31, 2011 |   |   | June 30, 2011 |   |
|--------------------------------|--------|---------------|--------|--------|-------------------|--------|--------|---------------|--------|
| Commercial                     |   |               |   |   |                   |   |   |               |   |
|    Real estate  |   | $             | 13,795 |   |              | $      | 10,141 |          |   | $ | 6,746 |   |
|    Construction |   |          | 3,619  |   |              |   | 5,702  |          |   |   | 772 |   |
|    Other        |   |          | 4,100  |   |              |   | 7,042  |          |   |   | 2,095 |   |
| Municipal                      |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Residential                    |   |          |   |   |              |   |   |          |   |   |   |   |
|    Term         |   |          | 19,052 |   |              |   | 16,821 |          |   |   | 16,191 |   |
|    Construction |   |          | 1,336  |   |              |   | 1,198  |          |   |   | 334 |   |
| Home equity line of credit     |   |          | 1,456  |   |              |   | 1,163  |          |   |   | 740 |   |
| Consumer                       |   |          | 16     |   |              |   | 53     |          |   |   | 103 |   |
| Total                          |   | $             | 43,374 |   |              | $      | 42,120 |          |   | $ | 26,981 |   |

----

| Dollars in thousands                                  |   | June 30,2012 |   |   | December 31, 2011 |   |   | June 30,2011 |   |
|-------------------------------------------------------|--------|--------------|--------|--------|-------------------|--------|--------|--------------|--------|
| Commercial                                            |   |              |   |   |                   |   |   |              |   |
|    Real estate                         |   | $            | 1,871  |   |              | $      | 6,864  |         |   | $ | 6,278 |   |
|    Construction                        |   |         | 153    |   |              |   | 1,777  |         |   |   | 117 |   |
|    Other                               |   |         | 1,841  |   |              |   | 2,623  |         |   |   | 1,541 |   |
| Municipal                                             |   |         | 1,560  |   |              |   | -      |         |   |   | - |   |
| Residential                                           |   |         |   |   |              |   |   |         |   |   |   |   |
|    Term                                |   |         | 11,069 |   |              |   | 12,174 |         |   |   | 16,009 |   |
|    Construction                        |   |         | 1,336  |   |              |   | 1,198  |         |   |   | 334 |   |
| Home equity line of credit                            |   |         | 1,841  |   |              |   | 1,614  |         |   |   | 1,608 |   |
| Consumer                                              |   |         | 369    |   |              |   | 347    |         |   |   | 266 |   |
| Total                                                 |   | $            | 20,040 |   |              | $      | 26,597 |         |   | $ | 26,153 |   |
| Loans 30-89 days past due to total loans              |   |         | 0.69   | %      |              |   | 1.00   | %            |   |   | 1.14 | % |
| Loans 90+ days past due and accruing to total loans   |   |         | 0.02   | %      |              |   | 0.14   | %            |   |   | 0.04 | % |
| Loans 90+ days past due on non-accrual to total loans |   |         | 1.56   | %      |              |   | 1.93   | %            |   |   | 1.77 | % |
| Total past due loans to total loans                   |   |         | 2.27   | %      |              |   | 3.07   | %            |   |   | 2.95 | % |

----

| Dollars in thousands           |   | June 30, 2012 |   |   | December 31, 2011 |   |   | June 30, 2011 |   |
|--------------------------------|--------|---------------|--------|--------|-------------------|--------|--------|---------------|--------|
| Carrying Value                 |   |               |   |   |                   |   |   |               |   |
| Commercial                     |   |               |   |   |                   |   |   |               |   |
|    Real estate  |   | $             | -      |   |              | $      | -      |          |   | $ | - |   |
|    Construction |   |          | 112    |   |              |   | 59     |          |   |   | 1,761 |   |
|    Other        |   |          | 2,956  |   |              |   | 1,504  |          |   |   | 2,747 |   |
| Municipal                      |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Residential                    |   |          | -      |   |              |   |   |          |   |   |   |   |
|    Term         |   |          | 2,505  |   |              |   | 2,967  |          |   |   | 3,351 |   |
|    Construction |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Home equity line of credit     |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Consumer                       |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Total                          |   | $             | 5,573  |   |              | $      | 4,530  |          |   | $ | 7,859 |   |
| Related Allowance              |   |          |   |   |              |   |   |          |   |   |   |   |
| Commercial                     |   |          |   |   |              |   |   |          |   |   |   |   |
|    Real estate  |   | $             | -      |   |              | $      | -      |          |   | $ | - |   |
|    Construction |   |          | -      |   |              |   | -      |          |   |   | - |   |
|    Other        |   |          | 215    |   |              |   | 127    |          |   |   | - |   |
| Municipal                      |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Residential                    |   |          | -      |   |              |   |   |          |   |   |   |   |
|    Term         |   |          | 170    |   |              |   | 309    |          |   |   | 136 |   |
|    Construction |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Home equity line of credit     |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Consumer                       |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Total                          |   | $             | 385    |   |              | $      | 436    |          |   | $ | 136 |   |
| Net Value                      |   |          |   |   |              |   |   |          |   |   |   |   |
| Commercial                     |   |          |   |   |              |   |   |          |   |   |   |   |
|    Real estate  |   | $             | -      |   |              | $      | -      |          |   | $ | - |   |
|    Construction |   |          | 112    |   |              |   | 59     |          |   |   | 1,761 |   |
|    Other        |   |          | 2,741  |   |              |   | 1,377  |          |   |   | 2,747 |   |
| Municipal                      |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Residential                    |   |          | -      |   |              |   |   |          |   |   |   |   |
|    Term         |   |          | 2,335  |   |              |   | 2,658  |          |   |   | 3,215 |   |
|    Construction |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Home equity line of credit     |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Consumer                       |   |          | -      |   |              |   | -      |          |   |   | - |   |
| Total                          |   | $             | 5,188  |   |              | $      | 4,094  |          |   | $ | 7,723 |   |

----

----

| Dollars in thousands                              |   | Total  |    |   | Less than1 year |   |    | 1-3 years |   |   | 3-5 years |   |   | More than 5 years |   |
|---------------------------------------------------|--------|--------|---------|--------|-----------------|--------|---------|-----------|--------|--------|-----------|--------|--------|-------------------|--------|
| Borrowed funds                                    |   | $      | 248,926 |   |            | $      | 118,767 |      |   | $      | 25,000    |   |   | $                 | 55,000 |   |   | $ | 50,159 |   |
| Operating leases                                  |   |   | 532     |   |            |   | 70      |      |   |   | 157       |   |   |              | 136    |   |   |   | 169 |   |
| Certificates of deposit                           |   |   | 613,878 |   |            |   | 390,166 |      |   |   | 183,085   |   |   |              | 40,627 |   |   |   | - |   |
| Total                                             |   | $      | 863,336 |   |            | $      | 509,003 |      |   | $      | 208,242   |   |   | $                 | 95,763 |   |   | $ | 50,328 |   |
| Total loan commitments and unused lines of credit |   | $      | 104,483 |   |            | $      | 104,483 |      |   | $      | -         |   |   | $                 | -      |   |   | $ | - |   |

----

|                                                  |   |   | 0-90    |   |   |   | 90-365  |   |   |   | 1-5     |   |   |   | 5        | +      |
|-------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|----------|--------|
| Dollars in thousands                             |   | Days   |    |   | Days   |   |    | Years  |   |   | Years   |   |
| Investment securities at amortized cost               |   | $      | 29,934  |   |   | $      | 85,457  |   |   | $      | 147,716 |   |   | $      | 168,436  |   |
| Federal Home Loan Bank and Federal Reserve Bank Stock |   |   | 13,412  |   |   |   | -       |   |   |   | -       |   |   |   | 1,036    |   |
| Loans held for sale                                   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | 378      |   |
| Loans                                                 |   |   | 454,045 |   |   |   | 152,979 |   |   |   | 219,822 |   |   |   | 54,968   |   |
| Other interest-earning assets                         |   |   | -       |   |   |   | 10,351  |   |   |   | -       |   |   |   | -        |   |
| Non-rate-sensitive assets                             |   |   | 7,841   |   |   |   | -       |   |   |   | -       |   |   |   | 78,382   |   |
|  Total assets                                    |   |   | 505,232 |   |   |   | 248,787 |   |   |   | 367,538 |   |   |   | 303,200  |   |
| Interest-bearing deposits                             |   |   | 317,393 |   |   |   | 144,268 |   |   |   | 223,846 |   |   |   | 242,748  |   |
| Borrowed funds                                        |   |   | 105,537 |   |   |   | 10,000  |   |   |   | 80,000  |   |   |   | 53,389   |   |
| Non-rate-sensitive liabilities and equity             |   |   | 1,900   |   |   |   | 5,700   |   |   |   | 32,350  |   |   |   | 207,626  |   |
|  Total liabilities and equity                    |   |   | 424,830 |   |   |   | 159,968 |   |   |   | 336,196 |   |   |   | 503,763  |   |
| Period gap                                            |   | $      | 80,402  |   |   | $      | 88,819  |   |   | $      | 31,342  |   |   | $      | (200,563 | )      |
| Percent of total assets                               |   |   | 5.64    | %      |   |   | 6.23    | %      |   |   | 2.20    | %      |   |   | -14.08   | %      |
| Cumulative gap (current)                              |   |   | 80,402  |   |   |   | 169,221 |   |   |   | 200,563 |   |   |   | -        |   |
| Percent of total assets                               |   |   | 5.64    | %      |   |   | 11.88   | %      |   |   | 14.08   | %      |   |   | 0.00     | %      |

----

| Changes in Net Interest Income             | June 30, 2012 | December 31, 2011 |
|--------------------------------------------|---------------|-------------------|
| Year 1                                     |          |              |
| Projected change if rates decrease by 1.0% | -1.12%        | -0.80%            |
| Projected change if rates increase by 2.0% | -0.96%        | -0.40%            |
| Year 2                                     |          |              |
| Projected change if rates decrease by 1.0% | -7.84%        | -7.60%            |
| Projected change if rates increase by 2.0% | -3.17%        | -1.00%            |

----

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