<PAGE>

                          CHALLENGES OR OPPORTUNITIES?

Dear Fellow Shareholder:

I am pleased to report that we were able to grow during 2006 in spite of a
challenging interest rate environment. We strengthened our commitment to the
communities we serve by opening the First Bank of Martinsville in Clark County
and the first branch of the First Bank of Rantoul in Champaign County. First
Bank of Martinsville is an economical prototype branch specifically designed to
make our services more convenient for our customers in smaller communities.
Although the new Rantoul branch of the First Bank is currently in a leased
facility, we are developing plans to relocate it to a site we currently own.
This new site will follow the branch prototype of Martinsville. Both of these
new branches, securely position us to compete more effectively for the heart of
our business - household and business deposit accounts and consumer,
residential, and commercial lending. We are excited about the growth potential
at both of our new branches, which are staffed with veteran financial service
providers.

In 2006, our newly renovated and expanded headquarters on the southwest corner
of the Courthouse Square in Paris, Illinois was completed. The completely
redesigned and expanded building provides 30,000 square feet on three levels.
Now all of the banking services of First Bank of Paris are available at one
location. This consolidation not only enhances our operating efficiency, but
also makes it much more convenient for our customers to conduct business at
First Bank of Paris. In addition to the expanded six-lane drive-up facility, we
have also created multiple customer lobby areas and contact areas that allow us
to serve our customers in an inviting and exciting atmosphere.

The challenges we encountered during 2005 continued throughout the year 2006.
The pressure on our interest margin increased as the yield curve changed
slightly becoming somewhat inverted on occasion. However, we were able to
continue developing new markets for our lending products resulting in
significant growth in our lending portfolio. This resulted in increased interest
income. We were able to grow our deposit balances, reducing our dependence on
borrowed funds. However, the cost of these funds was significantly higher than
we had forecast resulting in higher-than-expected interest expenses. In 2007, we
will enhance our profitability through improving our interest-rate margins as we
focus our marketing efforts on our new and enhanced deposit products and
services that should increase core deposit balances, historically a lower cost
source of funds, and continue to increase fee income.

The markets we serve are economically stable and vibrant. Agriculture continues
to thrive; the demand for real estate development, both commercial and
residential, remains strong; and consumer and home mortgage lending remain a
significant source of both interest and fee income. In addition, the general
economy in our area is expected to strengthen during 2007. We will continue to
pursue our strategy of offering lending products that are responsive to the
needs of the communities we serve, continuing the growth in our interest income.
We will continue to seek growth through acquisition when we can identify
opportunities in or adjacent to our current market area that are likely to
enhance our financial performance.

<PAGE>

The physical changes and branch additions we completed in 2006 provide the
foundation for improved operating efficiency. We now have the structure needed
to continue growing without adding significant operating overhead. Improved
operating efficiency, coupled with a growing loan portfolio and an increase in
core deposits will enhance our efforts to improve our fiscal performance in
2007.

Thank you for your confidence and your support of our company. Our management
team remains committed to improving the economic well-being of all of our
stakeholders - shareholders, customers, and employees alike. We will continue to
strive to maximize the value of your investment by providing the best community
banking experience possible for our customers in the communities we serve.

Sincerely,


-------------------------------------
Terry J. Howard
President and Chief Executive Officer

March 9, 2007

<PAGE>

FIRST BANCTRUST CORPORATION
SELECTED FINANCIAL DATA (IN THOUSANDS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
                                           2006       2005       2004       2003       2002
                                         --------   --------   --------   --------   --------
<S>                                      <C>        <C>        <C>        <C>        <C>
SUMMARY OF OPERATIONS
Interest income                          $ 16,292   $ 12,999   $ 11,774   $ 11,899   $ 13,032
Interest expense                            8,385      5,333      4,397      4,621      5,526
                                         --------   --------   --------   --------   --------
Net interest income                         7,907      7,666      7,377      7,278      7,506
Provision for loan losses                     230        510        515        728        718
Noninterest income                          3,462      3,338      3,469      3,819      3,492
Noninterest expense                         9,784      8,933      8,564      7,488      8,355
                                         --------   --------   --------   --------   --------
Income before income tax                    1,355      1,561      1,767      2,881      1,925
Income tax expense                            239        313        539        932        613
Net Income                                  1,116      1,248      1,228      1,949      1,312
PER SHARE (1)
Basic earnings per share                 $   0.51   $   0.56   $   0.54   $   0.85   $   0.51
Diluted earnings per share               $   0.48   $   0.52   $   0.51   $   0.81   $   0.50
Cash dividends paid                      $   0.24   $   0.24   $   0.23   $  0.175   $   0.10
Book value at December 31                $  11.50   $  11.00   $  11.04   $  10.55   $  10.00
Market value at December 31              $  11.80   $  12.19   $  11.58   $  11.62   $   7.86
RATIOS BASED ON NET INCOME
Return on average stockholders' equity       4.26%      4.66%      4.58%      7.38%      4.77%
Return on average assets                     0.40%      0.52%      0.54%      0.90%      0.64%
Net interest margin on average earning
   assets                                    3.06%      3.46%      3.56%      3.68%      4.02%
Dividend payout ratio                       48.62%     46.64%     46.82%     23.05%     21.57%
YEAR-END BALANCE SHEET DATA
Total assets                              311,058    273,865    230,924    226,194    202,725
Net loans (2)                             186,279    157,527    117,586    106,864    105,778
Securities                                 69,295     79,862     88,723     93,742     72,748
Deposits                                  242,603    193,975    159,471    163,028    147,335
Other borrowings                           38,986     51,886     42,500     35,500     26,501
Total stockholders' equity                 26,656     26,046     27,547     26,392     27,306
Average equity to average assets             9.27%     11.08%     11.84%     12.19%     13.52%
</TABLE>

(1)  Per share data reflects two for one stock split on May 21, 2004

(2)  Includes loans held for sale


                                        1

<PAGE>

                           FIRST BANCTRUST CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
             (TABLE DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

First BancTrust Corporation (Company) is a financial holding company whose
principal activity is the ownership and management of its wholly-owned
subsidiaries, First Bank & Trust, s.b. (Bank), ECS Service Corporation, and
First Charter Service Corporation. FBTC Statutory Trust I is an unconsolidated
wholly-owned subsidiary of the Company.

The Company conducts traditional banking activities through the Bank, including
originating and servicing residential, commercial, and consumer loans and
providing a broad range of depository services; but, otherwise, conducts no
significant business, except through the Company's other subsidiaries, First
Charter Service Corporation and ECS Service Corporation. The Community Finance
Center, Incorporated, which originally operated as a subsidiary of the Bank,
provided retail consumer lending to the Bank's market area. In May, 2005,
Community Finance Center, Incorporated was dissolved, and those activities were
merged into the Bank. Beginning in October, 2004, activities formerly provided
through First Charter Service Corporation were conducted under a third-party
agreement between First Advisors Financial Group and the Bank. First Advisors
provides securities brokerage, asset management services, and other investment
services and also engages in the sale of tax deferred annuities, and other
insurance products. First Charter is currently in inactive status. ECS Service
Corporation, doing business as Edgar County Title, provides abstracting services
and title insurance for the Bank's market area.

On October 1, 2005, the Company acquired all of the outstanding common stock of
Rantoul First Bank, SB located in Rantoul, Illinois. The transaction was
accounted for as a purchase, and the results of operations for Rantoul since the
acquisition have been included in the consolidated financial statements. The
Company also acquired a subsidiary, Rantoul First Financial, as part of the
acquisition of Rantoul First Bank in October, 2005. Rantoul First Financial was
a subsidiary of Rantoul First Bank, which provided brokerage and investment
services, and was dissolved in early 2006. All references to the Company include
the Bank and subsidiaries, unless otherwise indicated.

"SAFE HARBOR" STATEMENT

In addition to historical information, forward-looking statements are contained
herein that are subject to risks and uncertainties that could cause actual
results to differ materially from those reflected in the forward-looking
statements. The forward-looking statements are identifiable by the use of the
terms "believes," "expects," "anticipates," "estimates," or similar expressions.
Factors that could cause future results to vary from current expectations,
include, but are not limited to, the impact of economic conditions (both
generally and more specifically in the markets in which the Company operates);
the impact of competition for the Company's customers from other providers of
financial services; the impact of government legislation and regulation (which
changes from time to time and over which the Company has no control); and other
risks detailed in this Annual Report and in the Company's other Securities and
Exchange Commission filings. Readers are cautioned not to place undue reliance
on these forward-looking statements, which reflect management's analysis only as
of


                                        2

<PAGE>

the date hereof. The Company undertakes no obligation to publicly revise these
forward-looking statements to reflect events or circumstances that arise after
the date hereof. Readers should carefully review the risk factors described in
other documents the Company files from time to time with the Securities and
Exchange Commission.

FINANCIAL OVERVIEW

First BancTrust Corporation is a publicly held, Illinois-chartered stock savings
bank holding company. Our business activities are focused on community banking
in east-central Illinois through a subsidiary, First Bank & Trust, s.b., which
currently operates offices in Paris, Marshall, Savoy, Rantoul, and Martinsville,
Illinois. The Bank's activities are supplemented by the activities of our other
subsidiary, Edgar County Title Company. Currently, the Company's subsidiary,
First Charter Financial Services, is inactive. In October 2004, a strategic
alliance was established with First Advisor Financial Group to provide brokerage
and investment services, insurance products and asset management to our
customers.

During 2006, the Company completed the construction of the physical foundation
needed to support growth for the foreseeable future. Both customers and
employees of First Bank of Paris now enjoy the convenience and efficiency of
having all of our financial services provided at one location. In addition all
of our staff and support services are now housed in this same location,
facilitating delivery of services and enhancing responsiveness to the need of
our customer contact personnel. We also opened a new bank in Clark County (First
Bank of Martinsville) and acquired a new branch for the First Bank of Rantoul in
Champaign County without adding any significant administrative or support
expense. Both of these locations enhance convenience for our customers and boost
awareness of our presence in those respective communities. These new banking
offices join the four First Banks in Paris, Marshall, Savoy, and Rantoul
creating an effective service network throughout our market area. We continued
to develop new deposit products and expand our loan product line while fully
implementing more efficient processing and delivery systems. The expenses
associated with these enhancements and the interest rate yield curve that
changed little from the relatively flat yield curve of 2005 did negatively
impact our financial performance in 2006. Net income in 2006 was $1.1 million or
48 cents per diluted share. Net income in 2005 of $1.2 million or 52 cents per
diluted share approximated 2004 net income of $1.2 million or 51 cents per
diluted share. These results reflect the 2-for-1 stock split that took effect
May 21, 2004. Total assets increased to $311.1 million at December 31, 2006 from
$273.9 million at December 31, 2005. Loans, net of allowance for loan losses,
increased by $28.8 million to $186.3 million at December 31, 2006 compared to
$157.5 million at December 31, 2005. Total deposits increased to $242.6 million
at December 31, 2006, an increase of $48.6 million compared to total deposits of
$194.0 million at December 31, 2005.

The number of households we serve grew nearly seven percent during the year.
Twenty-five percent of that growth was at existing banking offices indicating
that our product offerings and services are attractive in very competitive
markets. Another twenty-five percent of the growth in households was achieved in
eight months of operation at the First Bank of Martinsville. The remaining fifty
percent came through the acquisition of the first branch of the First Bank of
Rantoul. The growth in the number of households we serve provides the
opportunity for increasing both deposit and loan balances while generating more
noninterest


                                        3

<PAGE>

income. Noninterest income from deposit customer service fees and consumer loan
insurance commissions continues to grow steadily. These sources of income have
grown to levels that this year nearly offset traditional noninterest income
sources that have declined over the past few years.

The establishment of two additional facilities to supplement our customer
service capabilities demonstrates our commitment to the communities we serve.
The management and staff of each First Bank are committed to improving the
economic environment of the communities where they work and live. Each Bank has
and will continue to enhance its array of deposit account offerings to assure
that our customers receive competitive products along with great service. During
2007 we will highlight our deposit products and services for households and
small businesses to increase our core deposit base. Our commitment to household
and small business lending is demonstrated by the increase in our loan
portfolio. Over half of the growth we experienced in 2006 was from 1-4 Family
and Multifamily lending. Agricultural lending and commercial real estate lending
accounted for about one third of the growth with the remaining portion coming
from consumer lending. Growth in our core deposit base and a continued increase
in the lending portfolio will help us increase both fee income and interest
income in 2007. We will also work during the upcoming year to increase our net
interest margin by raising the ratio of interest-earning assets to
interest-bearing liabilities. The result of achieving our specific goals of
increasing core deposits as a percent of interest-bearing liabilities and
increasing loans as a percent of interest-earning assets will be a significant
factor in the reversal of the decline in our net interest margin we experienced
in 2006.

The expenses associated with the construction and renovation of the headquarters
building in 2006 will reduce future operating and administrative expenses
inherent to continued growth and expansion. We will continue our efforts to
increase the number of households served by existing and newly-established
banking facilities since this will positively impact income. Our marketing
efforts will also concentrate on building core deposits and increasing the
balance of the loan portfolio which will enhance net interest income. Our growth
in noninterest income is generated almost entirely from relatively new products
and services, not historical fee income sources. The rate of increase in our
operating overhead has declined and should continue to improve. All of these
efforts will result in an increase in net earnings over future years. We are
confident in our ability to continue these efforts and to grow in the markets we
now serve. The Company will also continue to review opportunities for
acquisitions in new, contingent market areas, to assure that both our economic
value and future income will be enhanced by those acquisitions. We believe that
we will be able to do more than survive the challenge of the existing interest
rate environment. We will take advantage of this opportunity to improve our
performance during the next several years.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED
DECEMBER 31, 2006, DECEMBER 31, 2005, AND DECEMBER 31, 2004

General

Net income for 2006 decreased by $132,000, or 10.57% from $1.25 million for the
year ended December 31, 2005 to $1.12 million for the year ended December 31,
2006. The


                                        4

<PAGE>

decrease in net income is primarily due to an increase in noninterest expense,
partially offset by increases in net interest income and noninterest income, and
decreases in the provision for loan losses and income tax expense. Net income
for the year ended December 31, 2005 increased by $20,000, to $1.25 million or
1.63% from $1.23 million for the year ended December 31, 2004. The primary
reasons for the slight increase were an increase in net interest income and a
decrease in income tax expense, which were mostly offset by an increase in
noninterest expense combined with a reduction of noninterest income. Return on
average assets decreased to 0.40% for the year ended December 31, 2006 from
0.52% for the year ended December 31, 2005, which had decreased slightly from
0.54% for the year ended December 31, 2004. Return on average equity decreased
to 4.26% for the year ended December 31, 2006 from 4.66% for the year ended
December 31, 2005, which had increased slightly from 4.58% for the year ended
December 31, 2004.

Net Interest Income

Net interest income increased by $241,000 or 3.1% from $7.7 million for the year
ended December 31, 2005 to $7.9 million for the year ended December 31, 2006.
The primary reason for the increase in net interest income is an increase in
interest and dividend income of $3.3 million, partially offset by a $3.1 million
increase in total interest expense. For the year ended December 31, 2006, net
interest margin decreased by 40 basis points from 3.46% for the year ended
December 31, 2005 to 3.06% for the year ended December 31, 2006.

Net interest income increased by $289,000 or 3.9% from $7.4 million for the year
ended December 31, 2004 to $7.7 million for the year ended December 31, 2005.
The primary reason for the increase in net interest income is an increase in
interest income of $1.2 million, partially offset by an increase in interest
expense of $935,000. The Company's net interest margin was 3.46% for the year
ended December 31, 2005, compared to 3.56% for the year ended December 31, 2004.

For the year ended December 31, 2006, the net interest margin primarily
decreased as a result of a decrease in the ratio of average interest-earning
assets to average interest-bearing liabilities from 113.06% for the year ended
December 31, 2005 to 110.46% for the year ended December 31, 2006. The average
rate of interest bearing liabilities increased by 86 basis points from 2005 to
2006, while the average rate earned on interest bearing assets only increased by
44 basis points. The average rate earned on interest-bearing assets increased
from 5.86% in 2005 to 6.30% for 2006, while the average balances of
interest-bearing assets increased by $36.7 million, primarily due to 2006 loan
growth. The average 2006 loan portfolio balance of $174.4 increased by $43.0
million from the average loan portfolio balance in 2005 of $131.4 million. The
2006 loan growth was primarily funded by a decrease in the average balance of
the investment portfolio, and by an increase in the average deposit balances.
The average balance of interest bearing liabilities increased by $37.9 million
from $196.2 million average in 2005 to a 2006 average balance of interest
bearing liabilities of $234.1 million. The average rate paid on interest bearing
liabilities increased from 2.72% for the year ended December 31, 2005 to 3.58%
for the year ended December 31, 2006.


                                        5

<PAGE>

For the year ended December 31, 2005, the net interest margin decreased as a
result of a decrease in the ratio of average interest-earning assets to average
interest-bearing liabilities from 114.22% for the year ended December 31, 2004,
to 113.06% for the year ended December 31, 2005. The average interest rate
earned on interest-earning assets increased from 5.68% in 2004 to 5.86% in 2005,
while the average balances increased from $207.4 million in 2004 to $221.9
million in 2005. The increase in earning assets was primarily due to the
additional investment in loans, which was funded by deposits and borrowings
which increased earning liabilities. The average rate of interest-bearing
liabilities increased from 2.42% in 2004 to 2.72% in 2005, due to the increasing
rate environment. The average balance of interest-bearing liabilities increased
from $181.5 million in 2004 to $196.2 million in 2005. Interest rate spread for
2005 declined to 3.14% from 3.26% in 2004.

Projections for 2007 indicate that interest margins should increase as a result
of an increase in the average rate earned on interest-earning assets.
Management's expectations include significant loan volume to be generated in the
Savoy market in both commercial real estate development and residential real
estate. Loan growth is projected for the Rantoul market as well, for these types
of loans as well as agricultural loans. Growth in home equity loans is also
expected to continue in all markets. Interest margin should also increase as a
result of the conversion of investments and securities to higher-yielding loans.
Funds generated from maturities and principal repayments on investment
securities, as well as deposit growth, will fund loan growth. Deposit growth is
expected to occur in both the Savoy and Rantoul areas by attracting new
customers and their deposits. In addition, we will be promoting marketing
strategies to increase both the deposits and the number of deposit relationships
of existing customers.

Economic forecasts indicate that the demand for loans will continue well into
the year. These forecasts also show a slight easing of short-term interest rates
by year end. If the yield curve remains relatively flat throughout the upcoming
year, the benefit of our efforts to increase loans as a percentage of
interest-earning assets will likely be a slowing of the rate of decline in our
net interest margin compared to that experienced in 2006. In this instance,
deposit rates, which tend to be based on the short end of the yield curve, are
likely to remain high relative to loan rates which tend to be based on the
longer end of the yield curve. If the yield curve assumes a historically normal
upward slope, then our efforts will result in an increase in the net interest
margin during the latter portion of 2007. In this instance, deposit rates are
likely to decline from current levels as the shorter end of the yield curve
declines relative to the rates earned on loans as the longer end of the yield
curve remains stable or increases slightly.

Interest and Dividend Income - Total interest and dividend income for 2006 was
$16.3 million, an increase of $3.3 million over 2005 total interest income of
$13.0 million, which was primarily attributable to an increase in loan interest
income. Loan interest income for the year 2006 totaled $12.7 million, a $3.3
million increase over the 2005 total of $9.4 million. The $3.3 million increase
was primarily a result of 2006 average loan growth of $43.0 million, and to a
lesser extent, to an increase of 11 basis points in the average rate of interest
earned on the loan portfolio. Interest and dividend income from securities for
2006 decreased by $44,000 from $3.24 million for the year ended December 31,
2005 to $3.20 million for the year ended December 31, 2005. Dividends on Federal
Home Loan Bank


                                        6

<PAGE>

stock declined by $26,000 from $212,000 for the twelve months ended December 31,
2005 to $186,000 for the twelve months ended December 31, 2006. Interest earned
from deposits with financial institutions increased by $91,000 from $113,000 for
the year ended December 31, 2005 to $204,000 for the year ended December 31,
2006.

Interest income for 2007 is expected to increase primarily as a result of an
increase in the average balance of outstanding loans as well as an increase in
the balance of outstanding loans as a percentage of total earning assets;
however, if the yield curve remains relatively flat or inverts slightly, the
rates generally available for new loans are expected to be somewhat less than
the yield of the current portfolio. The reduction in the average interest rate
earned on the portfolio as a result of this factor is expected to be at least
partially offset by an increase in the rates of interest earned on variable rate
loans held in the portfolio that are subject to re-pricing during 2007.
Conversely, if the yield curve assumes a historically normal slope, then
interest rates generally available for new loans are expected to be near or
slightly above the yield of the current portfolio. As a result, the average
interest rate earned on the portfolio would remain stable or increase slightly.
However, in this instance the interest rates on loans subject to re-pricing
during 2007 would not increase as much and would tend to dampen the increase in
the yield of the current portfolio.

Total interest income was $13.0 million for the year 2005, an increase of $1.2
million, or 10.4% from $11.8 million reported in 2004. Interest income from
loans increased by $1.4 million from $8.0 million in 2004 to $9.4 million in
2005, and interest income from deposits with financial institutions increased by
$59,000 from $53,000 in 2004 to $113,000 in 2005, while investment income
declined by $185,000 from $3.4 million in 2004 to $3.2 million in 2005, and
dividend income from Federal Home Loan Bank stock decreased by $37,000 from
$249,000 in 2004 to $212,000 in 2005.

The following schedule compares average total loan balances by major categories
for the years 2006 and 2005:


                                        7
<PAGE>

<TABLE>
<CAPTION>
                                    Average Balance
                                  -------------------               %
                                    2006       2005     Change    Change
                                  --------   --------   -------   ------
                                          (Dollars in thousands)
<S>                               <C>        <C>        <C>       <C>
Real Estate Loans
   One-to-four family             $ 56,275   $ 39,651   $16,624    41.93%
   Multi-family                      1,988        671     1,317   196.27%
   Commercial                       32,206     22,528     9,678    42.96%
   Construction                      2,554      1,715       839    48.92%
   Agricultural                     22,908     17,383     5,525    31.78%
                                  --------   --------   -------   ------
Total real estate loans            115,931     81,948    33,983    41.47%
Agricultural production finance     18,584     14,750     3,834    25.99%
Commercial and industrial loans      9,894      8,172     1,722    21.07%
Consumer loans                      32,556     28,868     3,688    12.78%
                                  --------   --------   -------   ------
Total loans                        176,965    133,738    43,227    32.32%
Allowance for loan losses           (2,590)    (2,333)     (257)   11.02%
                                  --------   --------   -------   ------
Net loans                         $174,375   $131,405   $42,970    32.70%
                                  ========   ========   =======   ======
</TABLE>

The average net loan portfolio increased by $43.0 million or
32.7% from $131.4 million in 2005 to $174.4 million in 2006. This was primarily
a result of increases in average real estate loans of $34.0 million, average
agricultural production finance loans of $3.8 million, $3.7 million in average
consumer loans, and a $1.7 million increase in average commercial and industrial
loans, and a decrease in the average allowance for loan losses of $257,000. The
$34.0 million increase in average real estate loans was primarily a result of an
increase in the average one-to-four family real estate loans of $16.6 million,
or 41.9%, an increase in commercial real estate loans of $9.7 million or 42.9%,
and an increase of $5.5 million in average agricultural real estate loans.
Average multifamily real estate loans also increased by $1.3 million in
comparing 2006 to 2005, and average construction real estate loans increased by
$839,000 from 2005 to 2006.

The increase of $16.6 million in the average one-to-four family residential
loans was partially due to $10.5 million in one-to-four family residential loans
acquired as part of the acquisition of Rantoul First Bank in October, 2005. New
loan originations on one-to-four family residential properties totaled $54.1
million for 2006, of which $15.4 million in loans were originated for sale into
the secondary market. Of the $38.7 million in portfolio originations on
one-to-four family residential properties during 2006, $26.0 million were
originated in the Champaign County market. Total home equity lines of credit
originated by all branches during 2006 totaled $3.1 million. Average commercial
real estate loans increased by $9.7 million or 43.0% from an average of $22.5
million in 2005 to $32.2 million in 2006. This was primarily attributable to
$9.5 million in new originations during 2006, of which $5.0 million was
generated in the Savoy market. The average balance of agricultural real estate
loans increased by $5.5 million or 31.8% from an average balance of $17.4
million in 2005 compared to an average balance of $22.9 million in 2006. New
originations of farmland loans during 2006 totaled $8.0 million. The average
balance of multi-family real estate loans increased by $1.3 million from
$671,000 in 2005 to $2.0 million in 2006. Agricultural


                                       8

<PAGE>

production finance loans increased by $3.8 million or 26.0% from an average
balance of $14.8 million in 2005 to an average balance of $18.6 million in 2006,
resulting primarily from new originations in 2006 of $14.6 million. Commercial
and industrial loans increased by $1.7 million or 21.1% from an average balance
of $8.2 million for 2005 compared to an average balance of $9.9 million for
2006, primarily as a result of new originations of $4.7 million during 2006. The
average balance of consumer loans increased by $3.7 million or 12.8% from 2005
to 2006, primarily as a result of $19.9 million in new originations in consumer
loans during 2006.

The increase in loan interest income of $1.4 million from 2004 to 2005 was
primarily due to the increase in average balance from $111.4 million in 2004 to
$131.4 million in 2005, partially offset by a slight decrease in average rate
earned on outstanding loans. The average yield on loans for 2005 was 7.18%
compared to 7.22% average yield on loans for 2004, a decrease of 4 basis points.

Investment income decreased by $44,000 from $3.24 million for the year ended
December 31, 2005 to $3.20 million for the year ended December 31, 2006. This
was primarily due to a reduction in the average balance of the investment
portfolio in 2006 of $7.4 million from the 2005 average of $82.1 million to the
2006 average balance of $74.7 million, partially offset by an increase in the
average rate of 33 basis points from 3.95% during 2005 to 4.28% during 2006. The
decrease in the average balance of the securities portfolio was primarily used
to fund loan growth.

Investment income decreased by $185,000 from $3.4 million in 2004 to $3.2
million for 2005. This was primarily a result of a decrease in the average
balance of investments, partially offset by a slight increase in average yield.
The average balance of investments declined by $5.8 million from $87.9 million
during 2004 to an average balance of $82.1 million in investments during 2005.
The reduction in investments in 2005 was a source of funding for loan growth.
The average rate earned on investments in securities during 2005 was 3.95%, a
slight increase from the average rate earned on securities in 2004 of 3.90%.

Interest Expense - Interest expense increased by $3.1 million, or 57.3%, from
$5.3 million for the year ended December 31, 2005 to $8.4 million for the year
ended December 31, 2006. Interest on deposits increased by $2.9 million from
$3.5 million for the year ended December 31, 2005 to $6.4 million for the year
ended December 31, 2006. Interest on Federal Home Loan Bank advances and other
debt increased by $196,000 from $1.8 million for the year ended December 31,
2005 to $2.0 million for the year ended December 31, 2006.

Interest expense increased by $935,000, or 21.3%, from $4.4 million for the year
ended December 31, 2004, to $5.3 million for the year ended December, 31, 2005.
Interest on deposits increased by $616,000 from $2.9 million for 2004 to $3.5
million for 2005. Interest on Federal Home Loan Bank and other debt increased by
$320,000 from $1.5 million for 2004 to $1.8 million for 2005.

The $2.9 million or 81.5% increase in deposit interest expense from 2005 to 2006
was due to increases in the average balance and the average cost of funds for
deposits. Overall, the average balance of deposits increased from $151.0 million
for 2005 to $189.1 million for


                                       9

<PAGE>

2006. This increase was primarily due to an increase of $42.3 million in the
average balance of certificates of deposit. This was due to a combination of
factors including the acquisition of $19.2 million in certificates of deposit
from the acquisition of Rantoul First Bank in October, 2005. Also, $10.1 million
in certificates of deposit were acquired from CIB Marine BancShares, Inc. in
early December, 2006. Other factors contributing to the increase of the average
balance of certificates of deposit from 2005 to 2006 were the increased usage of
brokered certificates of deposit as a funding source during 2006, and a shift in
deposits from interest-bearing money market type checking accounts, to term
certificates of deposit as interest rates rose during 2006. The funds generated
from the increase in the average balance of deposits were used to fund loans
during 2006. The average rate of interest paid on certificates of deposit
increased by 105 basis points from an average rate in 2005 of 2.32% to an
average rate in 2006 of 3.37%. Interest bearing demand accounts experienced a
$4.4 million decrease in the average balance from the 2005 average of $52.8
million to the 2006 average of $48.4 million, as many account holders took
advantage of promotions featuring certificates of deposit products during the
opening of the Martinsville, Illinois branch in May, 2006 and the new main
facility in Paris, Illinois in July, 2006.

The $616,000 increase in interest paid on deposits from 2004 to 2005 was due to
an increase in the average balance of deposits as well as an increase in average
rates paid on those deposits. Demand deposits decreased by $4.3 million from an
average balance of $57.1 million in 2004 to an average balance of $52.8 million
in 2005. The average interest rate paid on demand deposits for 2004 was 1.15%
compared to 1.33% for 2005. Average balances in savings accounts for 2005
increased slightly from $12.0 million for 2004 compared to $12.2 million for
2005. The average rate paid on savings accounts decreased by 11 basis points
from 0.96% paid in 2004 to 0.85% paid in 2005. Certificates of deposits
increased by $11.2 million from an average balance of $74.7 million during 2004
to an average balance of $85.9 million during 2005. The largest component of
this increase was the acquisition of $19.2 million in certificates of deposits
as part of the acquisition of Rantoul First Bank in October, 2005. The average
rate paid on certificates of deposit increased by 30 basis points from 2.84% in
2004 to an average rate paid in 2005 of 3.14%.

In 2005, the interest rates paid on the Investor Checking Account product were
adjusted to a level higher than basic NOW account rates, but less than the money
market rates. Investor Checking Accounts are similar in nature to a Money Market
account, but without the transaction limitations associated with Money Market
accounts. As a result, the 2005 average balance of investor checking accounts
declined by $10.1 million to $28.8 million. For 2005, average money market
accounts increased by $7.7 million to $17.6 million from $9.9 million average
balance of 2004, as many investor checking account holders sensitive to interest
rates, converted their investor checking accounts to the higher yielding money
market product in 2005.

Interest expense on Federal Home Loan Bank (FHLB) and other debt for 2006
increased by $196,000 from $1.8 million for the year ended December 31, 2005 to
$2.0 million for the year ended December 31, 2006. This increase was due to an
increase of 45 basis points on the average interest rate on borrowings from the
2005 average rate of 4.04% to the 2006 average rate of 4.49%. This was partially
offset by a slight decrease of $228,000 in the average balance of FHLB advances
and other debt from an average balance in 2005 of $45.2


                                       10

<PAGE>

million to an average balance in 2006 of $45.0 million. In June, 2005, the
Company issued $6.0 million of trust preferred securities through FBTC Statutory
Trust I, to finance the purchase of all outstanding shares of Rantoul First
Bank, SB, for $4.2 million, and for other corporate use. The debentures carry a
fixed interest rate of 5.8% for a period of five years, and then convert to a
floating rate. The average balance of FHLB advances declined by $3.3 million
from a 2005 average of $40.7 million to $37.4 million average in 2006.
Borrowings at the FHLB typically consist of fixed-term notes, and an open-end
line of credit. At December 31, 2006, FHLB borrowings totaled $32.8 million,
which consisted of $7.3 million in fixed rate, fixed term advances, and $25.5
million in convertible advances. Convertible advances are fixed-term advances,
which have a convertible option which permits FHLB to convert the advance to an
adjustable rate, after a specific "lock-out" term has passed. If this occurs,
the advance will become be subject to quarterly rate adjustments, with a
prepayment option at each adjustment date. Of the $25.5 million in convertible
advances at December 31, 2006, $11.5 million have passed the "lock-out" period,
and are subject to possible conversion at quarterly intervals, while $14.0
million will be within the "lock-out" period until September, 2007.

Interest expense on FHLB advances and other debt for 2005 was $1.8 million
compared to $1.5 million for 2004, an increase of $320,000 or 21.2%. The
increase from 2004 to 2005 was primarily due to an increase of $7.4 million in
the average balance of borrowings for 2005 of $45.2 million compared to an
average balance of borrowings for 2004 of $37.8 million, and a slight increase
in the average rate paid on borrowings. The average rate paid on borrowings
during 2004 was 3.98% compared to an average of 4.04% paid in 2005. In June,
2005, the Company issued $6.0 million of trust preferred securities through FBTC
Statutory Trust I, to finance the purchase of all outstanding shares of Rantoul
First Bank, SB, for $4.2 million, and for other corporate use. The debentures
carry a fixed interest rate of 5.8% for a period of five years, and then convert
to a floating rate. The average balance of FHLB advances for 2005 increased by
$3.6 million from $37.1 million average balance for 2004, compared to $40.7
million average balance for 2005. The increase in borrowings was used to fund
loan growth during the year. At December 31, 2005, borrowings at FHLB totaled
$43.2 million, which consisted of $36.2 million in fixed term advances, and $7.0
million in an open line of credit. Of the $36.2 in fixed term advances, $20.5
million have convertible options, and all of these advances have passed the
"lock-out" periods, and thus are subject to possible conversion on a quarterly
basis. The Company also occasionally purchases federal funds to fund short-term
cash requirements, and at December 31, 2005, had $2.5 million purchased in
federal funds.

Average Balance Sheet

The following table presents the average balance sheet for the Company for the
years ended December 31, 2006, 2005, and 2004, the interest on interest-earning
assets and interest-bearing liabilities and the related average yield or cost.
The yields or costs are calculated by dividing income or expense by the average
balance of assets or liabilities, respectively, for the years shown. The yields
and costs include fees, which are considered adjustments to yields.


                                       11

<PAGE>

<TABLE>
<CAPTION>

                                                          As of                      Year Ended
                                                    December 31, 2006             December 31, 2006
                                                  ---------------------   ---------------------------------
                                                   Ending      Average     Average                Average
                                                  Balance    Yield/Rate    Balance   Interest   Yield/Rate
                                                  -------    ----------    -------   --------   ----------
                                                                      (Dollars in thousands)
<S>                                               <C>        <C>          <C>        <C>         <C>
INTEREST-EARNING ASSETS
   Deposits with financial institutions(1)        $ 15,575        5.08%   $  3,942   $   204       5.18%
   Securities                                       69,295        4.44%     74,731     3,198       4.28%
   Loans receivable, net (2)                       186,279        7.29%    174,375    12,704       7.29%
   Federal Home Loan Bank stock                      3,749        3.10%      5,557       186       3.35%
                                                  --------        -----   --------   -------       ----
      Total interest-earning assets                274,898        6.39%    258,605    16,292       6.30%
                                                                  -----              -------       ----
   Non-interest-earning assets                      36,160                  23,818
                                                  --------                --------
      Total assets                                $311,058                $282,423
                                                  ========                ========
INTEREST-BEARING LIABILITIES
   Deposits:
      Demand                                      $ 46,439        1.93%   $ 48,383   $   833       1.72%
      Savings                                       11,405        0.84%     12,449       103       0.83%
      Certificates of deposits of $100,000 or
         more                                       61,671        4.96%     41,725     2,112       5.06%
      Other certificates                            98,055        4.49%     86,556     3,315       3.83%
   Borrowings                                       38,986        4.45%     45,006     2,022       4.49%
                                                  --------        -----   --------   -------       ----
   Total interest-bearing liabilities              256,556        3.97%    234,119     8,385       3.58%
                                                                  -----              -------       ----
   Non-interest-bearing demand accounts             25,033                  21,423
   Non-interest-bearing liabilities                  2,813                     708
                                                  --------                --------
      Total liabilities                            284,402                 256,250
   Total equity capital(3)                          26,656                  26,173
                                                  --------                --------
      Total liabilities and equity capital        $311,058                $282,423
                                                  ========                ========
   Net average interest-earning assets            $ 18,342                $ 24,486
                                                  ========                ========
   Net interest income; interest rate spread(4)                                      $ 7,907       2.72%
                                                                                     ========      ====
   Net interest margin(5)                                                                          3.06%
                                                                                                   ====
   Average interest-earning assets to average
     interest-bearing liabilities                                           110.46%
                                                                          ========
</TABLE>

----------
(1)  Includes interest-bearing demand deposits and other interest bearing
     deposits.

(2)  Includes loans held for sale and nonaccruing loans.

(3)  Includes retained earnings and accumulated other comprehensive income
     (loss).

(4)  Interest rate spread represents the difference between the weighted average
     yield on interest-earning assets and the weighted average rate on
     interest-bearing liabilities.

(5)  Net interest margin is net interest income divided by net average
     interest-earning assets.


                                       12
<PAGE>

<TABLE>
<CAPTION>
                                                                          Year ended December 31,
                                                  --------------------------------------------------------------------
                                                                2005                                  2004
                                                  ---------------------------------   --------------------------------
                                                   Average                 Average     Average                Average
                                                   Balance    Interest   Yield/Rate    Balance   Interest   Yield/Rate
                                                  ---------   --------   ----------   --------   --------   ----------
                                                                        (Dollars in thousands)
<S>                                               <C>         <C>        <C>          <C>        <C>        <C>
INTEREST-EARNING ASSETS
   Deposits with financial institutions(1)        $  3,421     $   113       3.30%    $  3,880    $    53      1.37%
   Securities                                       82,130       3,242       3.95%      87,896      3,427      3.90%
   Loans receivable, net (2)                       131,405       9,432       7.18%     111,445      8,045      7.22%
   Federal Home Loan Bank stock                      4,904         212       4.32%       4,129        249      6.03%
                                                  --------     -------     ------     --------    -------      ----
      Total interest-earning assets                221,860      12,999       5.86%     207,350     11,774      5.68%
                                                               -------     ------                 -------      ----
   Non-interest-earning assets                      19,757                              19,033
                                                  --------                            --------
      Total assets                                $241,617                            $226,383
                                                  ========                            ========
INTEREST-BEARING LIABILITIES
   Deposits:
      Demand                                      $ 52,831     $   702       1.33%    $ 57,086    $   659      1.15%
      Savings                                       12,225         104       0.85%      11,989        115      0.96%
      Certificates of deposits of $100,000 or
         more                                       22,090         794       3.59%      20,280        630      3.11%
      Other certificates                            63,849       1,906       2.99%      54,376      1,487      2.73%
   Borrowings                                       45,234       1,826       4.04%      37,801      1,506      3.98%
                                                  --------     -------     ------     --------    -------      ----
      Total interest-bearing liabilities           196,229       5,332       2.72%     181,532      4,397      2.42%
                                                               -------     ------                 -------      ----
   Non-interest-bearing demand accounts             17,357                              15,104
   Non-interest-bearing liabilities                  1,271                               2,933
                                                  ========                            ========
      Total liabilities                            214,857                             199,569
   Total equity capital(3)                          26,760                              26,814
                                                  ========                            ========
      Total liabilities and equity capital        $241,617                            $226,383
                                                  ========                            ========
   Net average interest-earning assets            $ 25,631                            $ 25,818
                                                  ========                            ========
   Net interest income; interest rate spread(4)                $ 7,667       3.14%                $ 7,377      3.26%
                                                               =======     ======                 =======      ====
   Net interest margin(5)                                                    3.46%                             3.56%
   Average interest-earning assets to average                              ======                              ====
      interest-bearing liabilities                  113.06%                             114.22%
                                                  ========                            ========
</TABLE>

----------
(1)  Includes interest-bearing demand deposits and other interest bearing
     deposits.

(2)  Includes loans held for sale and nonaccruing loans.

(3)  Includes retained earnings and accumulated other comprehensive income
     (loss).

(4)  Interest rate spread represents the difference between the weighted average
     yield on interest-earning assets and the weighted average rate on
     interest-bearing liabilities.

(5)  Net interest margin is net interest income divided by net average
     interest-earning assets.


                                       13
<PAGE>

Rate/Volume Analysis

The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and expense during the
periods indicated. Information is provided in each category with respect to (i)
changes attributable to changes in volume (changes in volume multiplied by prior
rate); (ii) changes attributable to changes in rate (change in rate multiplied
by prior volume); and (iii) the net change. The changes attributable to the
combined impact of volume and rate have been allocated proportionately to the
changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
                                         Year Ended 12/31/2006       Year Ended 12/31/2005
                                              Compared to                 Compared to
                                         Year Ended 12/31/2005       Year Ended 12/31/2004
                                      --------------------------   -------------------------
                                           Increase                    Increase
                                          (Decrease)                  (Decrease)
                                            Due to                      Due to
                                      -----------------            ----------------
                                      Volume     Rate       Net     Volume    Rate     Net
                                      ------   --------   ------   -------   ------   ------
<S>                                   <C>      <C>        <C>      <C>       <C>      <C>
Interest-earning assets:
   Interest-bearing demand deposits   $   19   $     72   $   91      ($7)  $   67    $   60
   Securities                           (305)       261      (44)    (227)      42      (185)
   Loans receivable, net               3,129        143    3,272    1,433      (46)    1,387
   Federal Home Loan Bank stock           26        (52)     (26)      41      (78)      (37)
                                      ------   --------   ------   ------   ------    ------
      Total interest-earning assets    2,869        424    3,293    1,240      (15)    1,225
Interest-bearing liabilities:
   Demand accounts                       (63)       194      131      (52)      95        43
   Savings accounts                        2         (3)      (1)       2      (13)      (11)
   Certificates of deposit             1,688      1,039    2,727      334      249       583
   Borrowings                             (9)       205      196      294       26       320
                                      ------   --------   ------   ------   ------    ------
      Total interest-bearing
         liabilities                   1,618      1,435    3,053      578      357       935
                                      ------   --------   ------   ------   ------    ------
      Net change in net interest
         income                       $1,251    ($1,011)  $  240   $  662    ($372)   $  290
                                      ======   ========   ======   ======   ======    ======
</TABLE>

Provision for Loan Losses

The provision for loan losses for the year ended December 31, 2006 was $230,000
for the year ended December 31, 2006 compared to $510,000 for the year ended
December 31, 2005. For 2004, the provision for loan losses was $515,000.
Chargeoffs for 2006 totaled $773,000, which were partially offset by recoveries
of $103,000. Chargeoffs for 2005 were $439,000, which was nearly equal to the
2004 chargeoffs of $437,000. The chargeoffs of $439,000 for 2005 were partially
offset by recoveries of $90,000, while the chargeoffs of


                                       14

<PAGE>

$437,000 for 2004 were partially offset by recoveries of $98,000. Chargeoffs in
2006 included $310,000 in commercial loan chargeoffs, of which the largest
components were two commercial borrowers, one for $89,000 from a specialty
automotive business and secured by equipment, and $169,000 from a printing
company which was also secured by business equipment. Commercial real estate
loan chargeoffs in 2006 of $137,000 included a $122,000 partial charge off on an
apartment building complex, and chargeoffs on seven one-to-four residential
loans for 2006 totaled $74,000. Losses on agricultural production loans totaled
$28,000 resulting from chargeoffs on three borrowers. Consumer loan chargeoffs
during 2006 totaled $223,000 which included $139,000 in losses on vehicle loans,
$23,000 in losses on consumer finance loans, and $62,000 in losses on other
consumer loans. Recoveries in 2006 totaled $103,000, and were primarily related
to consumer loan chargeoffs. Chargeoffs in 2005 primarily included $205,000 in
vehicle loan chargeoffs which were partially offset by recoveries of $48,000,
$91,000 in a 2005 chargeoff pertaining to a single borrower with multiple rental
properties, and $58,000 in five chargeoffs on loans secured by 1-to-4 family
residential properties. In 2004, chargeoffs included $67,000 from two borrowers
on commercial real estate loans, and $75,000 from five borrowers on commercial
and industrial loans.

The provision for all periods reflects management's analysis of the Company's
loan portfolio based on the information which was available to it at such time.
In particular, management meets on a quarterly basis to review the adequacy of
the allowance for loan losses by classifying loans in compliance with regulatory
classifications. Classified loans are individually reviewed to arrive at
specific reserve levels for those loans, by ascertaining the amount of the
collateral shortage. Once the specific portion for each loan is determined,
management calculates a historical portion for each category of loans not
classified based on a combination of loss history adjusted for current national
and local economic conditions, trends in delinquencies and chargeoffs, trends in
volume and term of loans, changes in underwriting standards, and industry
conditions.

While Company management believes that the allowance for loan losses is
sufficient based on information currently available, no assurances can be made
that future events, conditions, or regulatory directives will not result in
increased provisions for loan losses or additional chargeoffs which may
adversely affect net income.

Noninterest Income

Noninterest income for 2006 was $3.5 million as compared to 2005 noninterest
income of $3.3 million, an increase of $124,000 or 3.7%. The increase was
primarily due to increases in customer service fees and other charges and fees,
partially offset by a decrease in net realized gains on sales of
available-for-sale securities. Noninterest income for 2005 was $3.3 million
compared to $3.5 million for 2004, a decrease of $132,000, or 3.8%. The decrease
was primarily due to reductions in loan servicing fees, other service charges
and fees, and net gains on loan sales, partially offset by increased customer
service fees.

Customer service fees for 2006 were $1.1 million as compared to $966,000 for
2005, an increase of $108,000, or 11.2%. This increase was primarily due to an
increase in non-sufficient ("NSF") and overdraft fees of $115,000 from $905,000
in 2005 to $1.0 million in


                                       15

<PAGE>

2006. The "Safety-Net Checking" product provides overdraft protection in the
form of a pre-approved amount of overdrafts, most often up to $500. The number
of active "Safety-Net Checking" accounts at December 31, 2006 totaled 2,410
compared to 2,145 accounts at December 31, 2005. The majority of new consumer
checking accounts opened are "Safety-Net Checking" as it also has no minimum
balance requirements. Expectations are that as the number of accounts will
continue to rise, related non-sufficient funds and overdraft fees will also
increase due to the increased volume of accounts. Also contributing to the
increase in NSF and overdraft fees was an NSF fee increase in August, 2006 from
$25 to $30 per item.

Customer service fees for 2005 totaled $966,000, which was an $82,000 increase
over the 2004 total customer service fees of $884,000. The 9.3% increase was
largely due to a $74,000 increase in NSF and overdraft fees from 2004 of
$831,000 to $905,000 for 2005. The number of active "Safety-Net Checking"
accounts at December 31, 2005 totaled 2,145 compared to 1,455 accounts at
December 31, 2004.

Other service charges and fees increased by $150,000 from $756,000 for the year
ended December 31, 2005 to $906,000 for the year ended December 31, 2006. The
primary factor contributing to this increase in 2006 was increased commissions
earned on insurance products sold to consumer loan customers and an increase in
debit card fees. Commissions earned on consumer loan related insurance products,
increased by $101,000 from $148,000 in 2005 to $249,000 in 2006. These
commissions include fees earned from commissions on credit life and disability
insurance, as well as gap insurance, which is a new insurance product offered to
auto loan customers to provide coverage for the "gap" between insurance coverage
and loan payoff in the event of total loss on a vehicle. Debit card interchange
fees increased by $30,000 from $133,000 for the year ended December 31, 2005 to
$163,000 for the year ended December 31, 2006. Debit card usage continues to
rise as the number of debit card transactions in 2006 totaled 393,675 compared
to 328,112 transactions in 2005, a 20.0% increase. This trend is expected to
continue in 2007 as consumers increase the frequency of debit card purchases.

Other service charges and fees decreased by $33,000 from $789,000 for the year
ended December 31, 2004, to $756,000 for the year ended December 31, 2005. The
primary reasons for the 4.2% decrease were reduced loan fees associated with
loans sold into the secondary market and fewer commissions earned on consumer
loan credit accident and life insurance, partially offset by an increase in
debit card fees. Residential loans sold into the secondary market for 2005 were
$15.1 million compared to $17.8 million in residential loans sold into the
secondary market in 2004, and the related fees associated with these loans
decreased by $31,000. Commissions earned on credit life, disability, and
accident insurance policies sold with consumer loans decreased by $17,000 from
$196,000 for the year ended December 31, 2004, to $179,000 for the year ended
December 31, 2005. Interchange fees earned on debit card usage increased by
$49,000 from $84,000 for the year ended December 31, 2004, to $133,000 for the
year ended December 31, 2005. Debit card transactions in 2005 totaled 328,112
compared to 211,166 transactions processed in 2004, a 55.4% increase.

Net gains on loan sales decreased by $32,000 from $291,000 for the year ended
December 31, 2005 to $259,000 for the year ended December 31, 2005. Net gains on
loan sales are comprised of actual cash gains at the time of sale, and the gain
recognized from the


                                       16

<PAGE>

capitalization of the related loan servicing assets. When a loan is sold into
the secondary market and the servicing rights to that loan are retained, an
asset is created representing the future payment stream of the servicing which
is recognized as income from the loan sale. The Company sells both one-to-four
family residential loans and agricultural loans in the secondary market,
although in 2004, 2005, and 2006, all loans sold into the secondary market were
one-to-four residential loans. Loans sold into the secondary market during 2006
totaled $15.3 million compared to $15.1 million in 2005. Of the $15.3 million in
loans sold in 2006, $6.3 million were sold servicing released, and the remaining
$9.0 million in loans were sold with the servicing retained. The gain recognized
from the capitalization of the servicing assets for 2006 totaled $131,000
compared to $168,000 for 2005. The 2006 volume of loans sold with servicing
retained was $9.0 million compared to $13.1 million in loans sold in 2005. The
cash gains on the loan sales for loans sold during 2006 increased slightly to
$128,000 from $123,000 in 2005.

Net gains on loan sales decreased by $43,000 from $334,000 for the year ended
December 31, 2004, to $291,000 for the year ended December 31, 2005. Cash gains
on the sale of loans for 2005 totaled $123,000, which was a reduction of $31,000
from cash gains on the sale of loans of $154,000 in 2004. Loans sold into the
secondary market during 2005 were $15.1 million, compared to $17.8 million in
loans sold during 2004. Of the $15.1 million in loans sold in 2005,
approximately $2.0 million were sold servicing released. In 2004, servicing
rights were retained on all loans sold into the secondary market. The gain
recognized from the capitalization of servicing assets decreased by $12,000 from
$180,000 for the year ended December 31, 2004, to $168,000 for the year ended
December 31, 2005.

Net realized gains on sales of available-for-sale securities for 2006 were
$12,000, which was a result of selling bonds from the municipal portfolio
totaling $996,000. Net realized gains on sales of available-for-sale securities
for 2005 were $117,959, which was a result of selling equity securities of
$985,000. In 2004, net realized gains on sales of available-for-sale securities
totaled $97,000 from the sale of equity securities of $514,000.

Loan servicing fees for the year ended December 31, 2006 were $437,000, compared
to $489,000 in loan servicing fees for the year ended December 31, 2005. The
$52,000 decrease was primarily due to a reduction in the agricultural portfolio
of loans serviced for others. The average total of agricultural loans serviced
for investors in 2006 was $8.3 million, a reduction of $1.8 million from the
2005 average agricultural portfolio serviced for investors of $10.1 million.
Loan servicing fees for the year ended December 31, 2005 were $489,000, which
was $169,000 or 25.7% less than loan servicing fees of $658,000 for the year
ended December 31, 2004. The average servicing portfolio for agricultural loans
decreased by $2.3 million from an average portfolio of $12.4 million in 2004
compared to an average portfolio of agricultural loans serviced in 2005 of $10.1
million.

Abstract and title fees decreased from $350,000 for the year ended December 31,
2005 to $313,000 for the year ended December 31, 2006. The 10.6% decrease of
$37,000 was due to a reduced volume of business in 2006 due to a decrease in
property transfers and loan originations within the market area of Edgar County.
Abstract and title fees increased by $15,000 or 4.5% from $335,000 for the


                                       17

<PAGE>

year ended December 31, 2004, to $350,000 for the year ended December 31, 2005.
This increase was a result of an increase in commissions earned on title
insurance policies issued.

The increase in cash surrender value of life insurance was $215,000 for the year
ended December 31, 2006 compared to $177,000 for the year ended December 31,
2005, an increase of $38,000 or 21.8%. This increase was primarily a result of
an increase in the interest rates on the related bank owned life insurance
policies. The increase in cash surrender value of life insurance was constant
from the 2004 to 2005 at $177,000.

Other income increased by $53,000, or 50.1%, from $106,000 for the year ended
December 31, 2005 to $159,000 for the year ended December 31, 2006. This
increase was primarily due to increased trust income in 2006, and increases in
ATM fees, lock box fees, and dividends from the unconsolidated subsidiary FBTC
Statutory Trust I. Other income for the year 2004 totaled $123,000 which
compared to the 2005 total of $106,000, was a $17,000 decrease. The reduction in
2005 other income was primarily due to a loss on the disposition of fixed assets
associated with the exchange of property with the City of Paris for the main
office site.

Noninterest Expense

Total noninterest expense for the year ended December 31, 2006 was $9.8 million
compared to $8.9 million for the year ended December 31, 2005, an increase of
851,000 or 9.53%. The increase was primarily due to increases in salaries and
benefits expense, net occupancy expense, equipment expense, and data processing
fees, partially offset by reductions in marketing expense and amortization of
loan servicing rights.

Total noninterest expense increased from $8.6 million for the year ended
December 31, 2004, to $8.9 million for the year ended December 31, 2005. The
$368,000 increase was primarily due to increases in net occupancy, equipment,
data processing, and other expenses, and a reduction in the amount of impairment
recovery of loan servicing rights partially offset by a reduction in the amount
of amortization of loan servicing rights.

Salaries and employee benefits expense increased by $426,000 or 9.2% from $4.6
million for the year ended December 31, 2005 to $5.1 million for the year ended
December 31, 2006. The $426,000 increase was primarily due to increases in
salaries and employment taxes expenses, incentive plan expense, health insurance
expense, and director fees, partially offset by a decrease in Employee Stock
Ownership Plan ("ESOP") expense. As of December 31, 2006, the Company payroll
included 90 full-time employees and 25 part-time positions. Salaries expense
increased by $243,000, and related employment tax expense increased by $17,000
from 2005 to 2006 due to the full year effect of the employees acquired with the
acquisition of Rantoul First Bank in October, 2005. Furthermore, a new branch
location opened at Martinsville, Illinois, in May, 2006, and a second Rantoul
location was in operation in December, 2006 resulting from the acquisition of
deposits from another area bank. The Martinsville location added three full-time
and one part-time employees to the Company roster, while the second Rantoul
location was primarily manned by the redeployment of existing Rantoul personnel
to the new location. During 2006, several positions were reassigned or
eliminated as a result of an internal evaluation of human resources. A new
agricultural specialty lender begins employment in January, 2007 to fill a


                                       18

<PAGE>

job vacancy, and plans for 2007 include the possibility of adding another
specialty lender with commercial experience in the Champaign County region.
Health insurance expense increased by $88,000 as a result of a 14% premium
increase as well as the addition of the Rantoul employees with health insurance
benefits in the Company plan for the entire year. Incentive plan expense
increased as a result of accruals related to shares of Company stock awarded in
December, 2005 to members of the Board of Directors and management which will
vest according to a defined schedule based on meeting defined financial
performance goals over the next five year period. ESOP expense decreased by
$25,000 in comparing 2006 to 2005 due to the decrease of the average stock
price. The monthly expense for the ESOP is determined by the average share price
in the open market for the month, and, as the monthly average share price
increases or decreases, the ESOP expense increases or decreases accordingly.
Director fees increased by $16,000 primarily due to an additional director at
the Corporate level.

Salaries and employee benefits expense remained relatively stable in 2005 at
$4.6 million. Director fees increased by $18,000 from $197,000 in 2004 compared
to $214,000 in 2005, due to the addition of a new director as a result of the
Rantoul acquisition, and a change in the composition of director committees.
Salaries and wages for 2005 were $3.1 million which was only a $21,000 increase
over the 2004 total salaries and wages of $3.1 million. As of December 31, 2005,
the Company payroll included 93 full-time positions and 16 part-time positions.
This included 9 full-time employees and 1 part-time employee acquired as part of
the purchase of Rantoul First Bank. FICA tax expense and ESOP expense each had a
slight increase for the year, while the Company contributions to the Voluntary
Benefit Welfare Association ("VEBA") trust, which provides health insurance and
other insurance benefits, experienced a slight deduction for 2005 when compared
to 2004.

Net occupancy expenses for the year ended December 31, 2006 increased by
$248,000 from $438,000 for the year ended December 31, 2005 to $686,000 for the
year ended December 31, 2006. This increase can be attributed to an increase in
real estate taxes for the Savoy branch, additional occupancy expenses associated
with the addition of the Rantoul and Martinsville locations, as well as the
expansion of the Paris facility, and additional building rent expense in 2006.
In late 2005, the Company completed a property exchange to acquire the adjoining
property to the current Operations Center for the building currently housing the
main office of the Bank in Paris, Illinois. This exchange of property provided
the area needed for the expansion and renovation to convert the Operations
Center into the new main bank office in Paris, Illinois. As part of the
agreement, the Company leased the building which formerly housed the main office
until completion of the construction project in early third quarter of 2006. The
move to the new facility was substantially completed at the end of July, 2006.

Equipment expense for the year ended December 31, 2006 increased by $223,000
from $832,000 for the year ended December 31, 2005 to $1.1 million for the year
ended December 31, 2006. This increase is primarily due to increases in software
licenses and software amortization expense, increases in ATM expenses, and an
increase in depreciation expense. Software licenses and software amortization
expenses increased by $107,000 from $81,000 for 2005 to $188,000 for 2006. The
largest component of this increase was $41,000 for one-time licensing fees for
the core processing system associated with the additional sites and


                                       19

<PAGE>

terminals on the system. Other contributing factors to this increase included
software usage fees associated with loan processing systems, software
maintenance fees for compliance disclosure programs, amortization of
profitability software and network interface software. ATM expense and ATM
depreciation expense increased by $68,000 from $129,000 for 2005 to $197,000 for
the year 2006 primarily due to the placement of additional ATM's at several
Murphy USA gas stations in central Illinois. Data processing expense increased
by $128,000 from $487,000 for the year ended December 31, 2005 to $615,000 for
the year ended December 31, 2006 primarily due to volume increases in number of
accounts on the system as well as number of locations and terminals using the
data processing system.

Net occupancy expenses for 2005 increased by $93,000 to $438,000 from $345,000
net occupancy expenses in 2004. The 27.1% increase was primarily a result of a
full year of occupancy expense for the new bank facility in Savoy, versus five
months of expense in 2004, as the Savoy branch moved into their new facility in
August, 2004. Building lease expense increased from $81,000 for 2004, compared
to $117,000 for 2005, an increase of $36,000. The depreciation expense on
leasehold improvements increased by $51,000 from $37,000 for the year ended
December 31, 2004, versus $88,000 for the year ended December 31, 2005. Real
estate taxes increased by $15,000 from $40,000 in 2004 to $55,000 in 2005. As
part of the Savoy building lease, the Company is required to pay real estate
taxes, maintenance, and insurance.

Occupancy and equipment expenses should both increase in 2007, as the occupancy
expenses associated with the new Paris facility will include the full year.
Conversely, the elimination of occupancy expenses associated with the two former
facilities should somewhat offset the increase. Also utilities expense is
expected to increase significantly in 2007 with the deregulation of electricity
rates in the State of Illinois.

Professional fees for the year ended December 31, 2006 decreased slightly from
$460,000 for the year ended December 31, 2005 to $456,000 for the year ended
December 31, 2006. In 2006, services with an investor relations firm were
discontinued, and this savings somewhat offset the additional expenses
associated with preparations for SOX 404 compliance. Professional fees for the
year ended December 31, 2005 were $460,000 compared to $481,000 of professional
fees for the year ended December 31, 2004, a slight decrease of $21,000. The
primary cause for the decrease was a reduction in consulting expenses incurred
with the investor relations firm retained by the Company. Fees incurred for the
investor relations firm in 2005 totaled $73,000 compared to $92,000 for the year
2004. Professional fees for 2007 are expected to rise, as the implementation of
SOX 404 requirements continue.

Marketing expense decreased by $92,000 from $334,000 for the year ended December
31, 2005 to $242,000 for the year ended December 31, 2006, a 27.5% decrease.
Promotions were held during 2006 to announce the opening of the Martinsville
branch and the relocation of the main facility. Promotions and an advertising
campaign in 2005 were used to introduce the Bank name to the Rantoul community
after the acquisition of Rantoul First Bank. Marketing expense decreased by
$9,000 from $343,000 for the year ended December 31, 2004, to $334,000 for the
year ended December 31, 2005, a 2.6% decrease.


                                       20

<PAGE>

Amortization of loan servicing rights was $242,000 for the year ended December
31, 2006 compared to $487,000 for the year ended December 31, 2005, a decrease
of $244,000. This reduction is primarily due to a decline in amortization from
agricultural loan servicing rights from $215,000 for 2005 compared to $23,000
for 2006. This is primarily a result of the reduction of the agricultural
servicing portfolio, as no agricultural loans have been sold in the secondary
market since 2003. Amortization of loan servicing rights was $487,000 for the
year ended December 31, 2005, compared to $630,000 for the year ended December
31, 2004, a reduction of $143,000. The reduction in amortization was again
primarily due to a reduction in amortization of loan servicing rights on
agricultural loans serviced for others. Amortization on agricultural loan
servicing rights declined from $319,000 for 2004 to $215,000 for 2005. The
remainder of the decrease relates to the loan servicing rights on the 1-to-4
family residential loan servicing portfolio. Amortization on the residential
loan servicing rights declined to $271,000 for 2005 from $311,000 for 2004. As
the rate of loan repayment has slowed, the amount of accelerated amortization
has also been reduced, and the expected life of the servicing rights lengthens.

In 2002, when existing loan servicing assets were valued with estimated shorter
lives due to the lower interest rate environment and accelerated prepayment
speeds, the calculated value was substantially less than the book value of the
servicing assets, identifying an impairment. The impairment of $683,000 was
charged against earnings in 2002, and a valuation allowance was established for
this amount. During subsequent valuations in 2003, the Company recognized a
$416,000 recovery of the previously identified impairment, and in 2004, current
valuations indicated an additional recovery of $242,000. In 2005, the last of
the impairment from 2002, or $24,000 was recovered as the current valuations
indicated a complete recovery of the original impairment.

Other expenses were stable at $1.1 million for the year ended December 31, 2006
as compared to the year ended December 31, 2005. Other expenses increased by
$154,000 from $905,000 for the year ended December 31, 2004, to $1.1 million for
the year ended December 31, 2005, an increase of 17.0%. The increase was
primarily attributable to a loss on premises and equipment, increased
amortization of core deposit intangibles, increased bank fees from Federal
Reserve Bank, and an increase in supervisory fees from the State of Illinois. A
loss was recognized in 2005 of $62,000 relating to the main bank facility which
was part of a property exchange at year end. Amortization of core intangible
assets increased by $30,000 for 2005 over 2004, as amortization began on the
core intangible assets from the Rantoul acquisition. Fees assessed by the
Federal Reserve Bank for 2005 increased by $34,000 over 2004 as more services
were utilized in 2005 including image delivery of both incoming and outgoing
cash letters. The increase in fees assessed from supervision from the Bank's
primary regulator, the State of Illinois, of $15,000 was primarily due to the
expenses associated with examination by this agency, which occurs approximately
every three years.

Income Tax Expense

Total income tax expense for the year ended December 31, 2006 was $239,000
compared to $313,000 for the year ended December 31, 2005, a decrease of
$74,000. The decease occurred as a result of reduced taxable income in 2006 of
$1.4 million compared to taxable


                                       21

<PAGE>

income in 2005 of $1.6 million. Total income tax expense for 2005 was $313,000,
compared to $539,000 for 2004, a decrease of $226,000. The decrease of $226,000
is attributable to lower taxable income of $1.6 million in 2005 compared to $1.8
million in 2004 and an increase in permanent tax differences related to tax
exempt interest.

FINANCIAL CONDITION

Total assets of the Company increased by $37.2 million or 13.6% to $311.1
million at December 31, 2006, from $273.9 million at December 31, 2005. The
growth in total assets was due primarily due to a $16.3 million increase in cash
and cash equivalents, a $28.6 million increase in loans, net of allowance for
loan losses, and a $4.6 million increase in premises and equipment, partially
offset by a decrease of $11.9 million in available-for-sale securities and a
decrease in Federal Home Loan Bank stock of $2.9 million. The overall increase
in total assets was funded primarily deposit growth.

The Company's cash and cash equivalents increased by $16.3 million, from $12.4
million at December 31, 2005, to $28.8 million at December 31, 2006.
Interest-bearing demand deposits with banks increased by $10.5 million from $5.1
million at December 31, 2005, to $15.6 million at December 31, 2006. Cash and
due from banks increased by $5.9 million from $7.3 million at December 31, 2005,
to $13.2 million at December 31, 2006. Cash and cash equivalents were at a high
level at December 31, 2006 in anticipation of the mid-January maturity of a
brokered certificate of deposit of $17.8 million.

Investment securities available for sale totaled $64.5 million at December 31,
2006, compared to $76.4 million at December 31, 2005, a decrease of $11.9
million. The decrease resulted from $18.2 million generated by calls,
maturities, and pre-payments, $996,000 generated by sales proceeds, and
amortization of premiums of $49,000, offset by $7.3 million in
available-for-sale investment purchases, primarily in mortgage-backed
securities, municipal bonds, and Federal Home Loan Bank ("FHLB") bonds. The
decrease in securities available-for-sale was used primarily to fund loan
growth.

Investment securities held-to-maturity totaled $4.8 million at December 31,
2006, compared to $3.4 million at December 31, 2005. The $1.3 million increase
was due to an investment purchase of held to maturity securities of $1.8
million, partially offset by repayments received on securities in 2006 of
$544,000. The Company has the positive intent and ability to hold these
securities until maturity.

Loans held for sale, net of unrealized loss, increased by $194,000 from $642,000
at December 31, 2005, to $836,000 at December 31, 2006. Loans for sale at
December 31, 2006, consisted entirely of one-to-four family residential loans,
which were in the process of being sold into the secondary market to the Federal
Home Loan Mortgage Corporation and Illinois Housing Development Authority. The
allowance for unrealized loss of $3,000 at December 31, 2006, pertained to the
market value differential on one loan to be sold to Federal Home Loan Mortgage
Corporation.


                                       22

<PAGE>

The Company's net loan portfolio increased by $28.5 million or 18.2%, from
$156.9 million at December 31, 2005, to $185.4 million at December 31, 2006.
Gross loans increased by $28.1 million, and the allowance for loan loss
decreased by $440,000. The growth was primarily from one-to-four family
residential loans, which increased by $14.9 million, and agricultural loans,
which grew by $9.6 million in 2006. One-to-four family residential loans grew by
$14.9 million from $51.8 million at December 31, 2005, to $66.7 million at
December 31, 2006. Of the $36.8 million in portfolio originations on one-to-four
residential properties during 2006, $24.6 million were originated in the
Champaign County area, predominately by the Savoy branch. Home equity lines of
credit increased by $725,000 from $5.7 million at December 31, 2005, to $6.4
million at December 31, 2006. Multi-family residential loans increased by $2.7
million from $695,000 at December 31, 2005 to $3.4 million at December 31, 2006,
as a result of $2.8 million in new originations. Expectations are that, in 2007,
the Savoy branch will continue to originate a significant number of residential
real estate loans.

Agricultural loans increased by $9.6 million during 2006, which included both
farmland and agricultural production loans. Farmland loans in the loan portfolio
at December 31, 2006 totaled $27.0 million compared to $20.9 million at December
31, 2005, an increase of $6.1 million, and agricultural production loans
increased by $3.5 million from $18.9 million at December 31, 2006 compared to
$15.4 million at December 31, 2005. New originations of farmland loans during
2006 totaled $8.0 million and were primarily generated in the market areas of
Edgar and Clark Counties in Illinois. Agricultural production loans originated
during 2006 totaled $14.6 million and were generated in Edgar and Clark Counties
as well as northern Champaign County in Illinois. Agricultural production loans
are typically secured by crops, inventory, livestock and farm equipment.

Commercial real estate loans increased by $507,000 from $33.2 million at
December 31, 2005, to $33.7 million at December 31, 2006. Commercial real estate
loan originations for 2006 totaled $9.5 million, of which approximately $5.0
million in commercial real estate loans were originated by the Savoy branch.
Commercial and industrial loans at December 31, 2006 totaled $7.4 million,
compared to $7.9 million at December 31, 2005, a $526,000 decrease. New
originations during 2006 totaled $4.7 million, which were evenly distributed
between all branches.

Consumer loans increased by $1.1 million from a balance of $26.4 million at
December 31, 2005 to $27.5 million at December 31, 2006. Vehicle loans increased
by $488,000, consumer finance loans increased by $72,000, share loans, or loans
secured by deposits, increased by $304,000, and other consumer loans increased
by $326,000 while consumer finance loans remained stable with only a $5,000
increase. New originations of consumer loans during 2006 totaled $19.9 million,
of which $14.0 were loans secured by new and used vehicles.

At December 31, 2006, the allowance for loan losses was $2.2 million or 1.18% of
the total loan portfolio compared to $2.7 million or 1.67% at December 31, 2005.
The Company's net chargeoffs were $670,000 for 2006 compared to $348,000 for
2005. Delinquent loans overdue by 90 days or more totaled $1.3 million or 0.70%
of total loans at December 31, 2006, compared to $1.4 million or 0.88% of total
loans at December 31, 2005. The Company's non-performing loans, which include
loans delinquent 90 days or more and


                                       23

<PAGE>

troubled debt restructurings, were $1.8 million or 0.98% of total loans at
December 31, 2006, compared to $1.5 million or 0.95% of total loans at December
31, 2005. Non-performing loans at December 31, 2006 included $176,000 of
one-to-four family residential loans, $546,000 of commercial real estate loans
pertaining to two borrowers, $223,000 of commercial and industrial loans
pertaining to three borrowers, $246,000 in three agricultural production loans,
and $78,000 in multiple vehicle loans. Non-performing assets, which include
non-performing loans and foreclosed assets totaled $2.2 million at December 31,
2006, compared to $1.8 million at December 31, 2005. Troubled debt
restructurings are loans which are modified due to the borrower's financial
difficulties, to terms which the Bank might not have otherwise considered. Once
these loans are restructured, they continue to be monitored until they have
performed according to the terms of the modification for at least one year with
no late payments. At December 31, 2006, troubled debt restructurings totaled
$532,000, compared to $94,000 at December 31, 2005. One loan totaling $74,000,
which was included in the troubled debt restructurings at December 31, 2005,
performed according to terms for one year without any late payments, and, as a
result, has been eliminated from the troubled debt restructurings for 2006. One
loan for $532,000 was added to nonperforming loans in 2006. Nonperforming assets
and troubled debt restructurings as a percentage of total assets increased from
0.65% at December 31, 2005, to 0.71% at December 31, 2006. The Company's
troubled debt restructurings at December 31, 2006 consisted of a restructured
farmland commercial real estate loan and a restructured commercial loan secured
by business assets and a personal residence. The Company will continue to
monitor changes in the composition of the loan portfolio due to loan growth in
Savoy to ensure that the allowance is adequate. Management reviews the adequacy
of the allowance for loan losses quarterly, and believes that its allowance is
adequate; however, the Company cannot assure that future chargeoffs and/or
provisions will not be necessary.

Premises and equipment for December 31, 2006 was $11.0 million, a $4.6 million
or 72.5% increase from the December 31, 2005 total of $6.4 million. Purchases of
premises and equipment for 2006 totaled $5.3 million, of which $3.7 million was
related to the building expansion and renovation of the former Operations Center
located in Paris which resulted in an enlarged facility housing the main office
of the Bank. In late July, the Bank moved into the new facility. Other
disbursements for furniture and fixtures, signage, phone system, and security
systems for the new facility in 2006 totaled $1.2 million. Assets totaling
$240,000 relating to the existing building were removed during the construction,
resulting in a loss on disposal of $91,000. In May, 2006, the Company also
completed construction on a branch building located in Martinsville, Illinois.
Disbursements related to this building project during 2006 total $287,000.
Depreciation of premises and equipment for 2006 increased by $239,000 from
$413,000 for the year ended December 31, 2005, to $652,000 for the year ended
December 31, 2006.

Federal Home Loan Bank stock decreased $2.9 million from $6.6 million at
December 31, 2005, to $3.7 million at December 31, 2006. This 43.3% reduction
was a result of the redemption of $1.9 million in stock by the Federal Home Loan
Bank in June, and a second redemption of $975,000 in mid-December, 2006.

Foreclosed assets held for sale, net, at December 31, 2006 totaled $366,000
compared to $267,000 at December 31, 2005. Foreclosed assets at December 31,
2006 included ten real


                                       24

<PAGE>

estate properties totaling $299,000 and other repossessed assets, primarily
vehicles, totaling $67,000. The real estate properties contained in foreclosed
assets include four residential properties, four commercial properties, and two
vacant lots. Foreclosed assets are carried at lower of cost or net realizable
value.

Interest receivable at December 31, 2006 totaled $2.9 million, compared to the
December 31, 2005 total of $2.42 million. The $504,000 increase is attributable
to the $28.6 million increase in loans, net of allowance for loan losses, from
December 31, 2005 to December 31, 2006.

Loan servicing rights decreased $111,000 from $462,000 at December 31, 2005, to
$351,000 at December 31, 2006. The decrease was due to amortization of loan
servicing rights, offset by newly capitalized assets. Capitalized servicing
assets for 2006 were $131,000 compared to $168,000 for 2005, while total loans
sold in the secondary market in 2006 were $15.3 million compared to $15.1
million during 2005. An independent valuation of servicing assets is obtained
quarterly to establish the market value of the assets using current prepayment
assumptions. As prepayment speeds slow due to rising interest rates, the
remaining life of the servicing asset increases, which in turn will increase the
market value of the servicing assets. Amortization of servicing rights amounted
to $242,000 in 2006 compared to $487,000 in 2005. The original amount
capitalized is recognized as a gain and is included as gain on sale of loans in
the income statement. Capitalized servicing rights are amortized in proportion
to and over the period of estimated servicing revenues.

Cash surrender value of life insurance increased from $4.8 million at December
31, 2005, to $5.0 million at December 31, 2006. The increase of $182,000 was due
to the net increase in the cash surrender value.

Goodwill of $541,000 at December 31, 2006 and December 31, 2005 is related to
the purchase of Rantoul First Bank in October, 2005. The excess of the purchase
price paid over the fair market value of the individual assets and liabilities
acquired as part of the purchase is considered goodwill. Goodwill is not subject
to amortization, and is tested annually for impairment. Core deposit intangible
assets at December 31, 2006 totaled $764,000 compared to $484,000 at December
31, 2005, an increase of $280,000. The increase in core deposit intangibles
resulted from the acquisition of deposits from $13.1 million in deposits from
CIB Marine Bancshares, Inc. in early December, 2006. Amortization on the core
deposits intangible assets for 2006 was $69,000 compared to $42,000 for 2005.

Other assets decreased from $658,000 at December 31, 2005, to $487,000 at
December 31, 2006, a decrease of $171,000. The decrease was primarily due to a
reduction in prepaid expenses.

The Company's total deposits increased from $194.0 million at December 31, 2005,
to $242.6 million at December 31, 2006, an increase of $48.6 million or 25.1%.
The increase in total deposits was due to a $3.5 million increase in demand
deposits, and a $53.6 million increase in certificates of deposit, offset by an
$8.5 million decrease in savings, NOW and money market accounts. Deposits
acquired from CIB Marine Bancshares, Inc. in December, 2006 totaled $13.1
million, which included $419,000 in demand deposits, $2.6 million in


                                       25

<PAGE>

savings, NOW and money market accounts, and $10.1 million in certificates of
deposits. The Company issued three brokered certificates of deposit for a total
of $27.8 million outstanding at December 31, 2006. The brokered certificates of
deposit were used as a temporary funding source of funds, and are short term in
nature. Two certificates totaling $22.8 million were issued with terms of six
months, of which one certificate for $17.8 million will mature in mid-January,
2007, and the other certificate for $5.0 million will mature in March, 2007. The
remaining $4.9 million brokered certificate of deposit was issued in December,
2006 for a forty-two month term maturing in June, 2010, with a call provision at
June, 2007. Net deposit growth generated from the Savoy branch totaled $6.5
million, from $20.1 million at December 31, 2005, to $26.5 million at December
31, 2006.

Demand or non-interest bearing accounts have increased by $3.5 million from
$21.5 million at December 31, 2005, to $25.0 at December 31, 2006, a 16.3%
increase. Consumer demand checking accounts increased by $3.0 million from $14.6
million at December 31, 2005, to $17.6 million at December 31, 2006. Consumer
demand deposits acquired from CIB Marine Bancshares, Inc. in early December,
2006 totaled $203,000. One of the primary sources of the consumer demand deposit
growth was in the "First Preferred" checking product which is a basic no-fee,
no-frills type checking account. This product experienced growth of $1.0 million
from $7.9 million at December 31, 2005 to $8.9 million at December 31, 2006.
"Safety-Net Checking" is another checking account product which offers a fixed
amount of overdraft protection, usually up to $500. Safety-net checking accounts
numbered 2,410 for a total balance of $4.0 million at December 31, 2006,
compared to 2,145 accounts totaling $3.1 million at December 31, 2005, an
increase of $910,000. A new product introduced in 2004 was "Student Checking"
which targets college students. This new product, for students aged 18-23,
offers a checking product with no service charges or minimum balance
requirements. The account offers an option of adding a $100 "Safety-Net" for
overdraft protection, free debit card, and online banking. At December 31, 2006,
281 Student Checking accounts were in existence with a total balance of
$166,000, compared to 208 Student Checking accounts with a total balance of
$71,000 at December 31, 2005. Business demand accounts increased by $492,000
from $7.0 million at December 31, 2005, to $7.5 million at December 31, 2006.
The business product line was expanded in 2004 to offer a variety of products to
meet the needs of different types of businesses. Different products have been
tailored for the small business owner, non-corporate and non-profit
organizations, and for commercial businesses. All of the new business products
can have an additional feature called "e-business" added to the accounts, which
allows for funds management between accounts. The deposits acquired from CIB
Marine Bancshares, Inc. included twenty-seven business demand accounts totaling
$215,000. At December 31, 2006, business accounts numbered 407 compared to 330
accounts at December 31, 2005.

Savings, NOW, and money market accounts decreased by $8.5 million from $66.3
million at December 31, 2005, to $57.8 million at December 31, 2006. Investor
Checking, still the largest component of NOW account deposits, totaled $17.7
million at December 31, 2006, compared to $21.6 million at December 31, 2005, a
decrease of $3.9 million. Investor Checking was originally introduced several
years ago as a consumer product with comparable rates to money market accounts
without withdrawal restrictions, although more recently rates have been
realigned to more resemble a NOW account rather than a money market. The
weighted average interest rate for investor checking at December 31, 2006, was


                                       26

<PAGE>

1.07% compared to the weighted average interest rate of 3.36% for consumer money
market accounts at December 31, 2006. At December 31, 2005, the weighted average
rate of interest for investor checking was 1.05% compared to a weighted average
rate of interest for money market accounts of 2.90% at December 31, 2005. As a
result of the larger interest rate spread in the two products, many interest
sensitive customers have converted their investor checking accounts to the money
market product, or, as an alternative, have opted to invest funds in
higher-yielding certificates of deposit. Consumer money market accounts have
grown by $1.6 million, from $13.3 million at December 31, 2005, to $14.8 million
at December 31, 2006. Business money market accounts have declined by $7.4
million, from $10.4 million at December 31, 2005, to $3.0 million at December
31, 2005. This decline was primarily due to the withdrawal of a public entity of
bond issue proceeds of $6.4 million. The number of business money market
accounts has remained stable, from 41 accounts at December 31, 2005, to 42
accounts at December 31, 2006. The average rate of interest for business money
market accounts has increased slightly from 1.30% from December 31, 2005, to
1.60% at December 31, 2006.

When the acquired deposit accounts from CIB Marine Bancshares were converted to
Bank products, a new money market product was created to accommodate account
holders with an indexed money market account. The rate of this new money market
product is priced to be competitive with money funds and can adjust weekly.
Interest rates are tiered; however, there is no minimum balance to earn
interest. This product is targeting large balance account holders who desire
liquidity. The account does have the withdrawal restrictions of normal money
market accounts. At December 31, 2006, there were 29 accounts totaling $1.7
million. Plans are to promote this product within the Company's market areas in
2007.

Other NOW accounts increased slightly by $234,000 from $9.0 million at December
31, 2005, to $9.2 million at December 31, 2006. Savings accounts have decreased
from $12.2 million at December 31, 2005, to $11.4 million at December 31, 2006,
a decrease of $747,000. Signature savings accounts, a traditional savings
product, decreased by $334,000 from $9.6 million at December 31, 2005, to $9.2
million at December 31, 2006. The number of signature savings accounts also
declined from 3,559 at December 31, 2005 to 3,351 at December 31, 2006. "Pay
Yourself First" savings accounts are structured to pay interest on a tiered
basis and require an automatic transfer from a bank checking account at least
monthly. While the Pay Yourself First savings dollar totals have declined from
$1.9 million at December 31, 2005 to $1.6 million in deposits at December 31,
2006, the number of accounts has increased. At December 31, 2005, Pay Yourself
First savings accounts numbered 744 compared to 859 accounts at December 31,
2006. This account is being re-evaluated in 2007 to modify terms in an attempt
to attract core deposits.

Certificates of deposit (CDs) have increased by $53.6 million from $106.1
million at December 31, 2005, to $159.7 million at December 31, 2006, a 50.5%
increase. Certificates of deposit acquired from CIB Marine Bancshares, Inc. in
early December, 2006 numbered 478 and totaled $10.1 million. Outstanding at
December, 2006 are three brokered certificates of deposit issued by the Bank
totaling $27.8 million. The largest certificate of $17.8 million will mature in
mid-January, 2007, and plans are to retire this certificate with the accumulated
funds currently held in interest-bearing demand deposits. Promotional specials
held during 2006 featured short-term certificates of deposit at competitive
rates, most often a five month,


                                       27

<PAGE>

eleven month, or twenty-one month term. "CD Specials" were featured during the
Martinsville branch grand opening as well as during the open house for the move
into the new main facility. The five month CD product increased by $8.4 million
from $6.1 million at December 31, 2005 to $14.5 million at December 31, 2006.
The eleven month CD product increased by $21.0 million from $24.4 million at
December 31, 2005 to $45.4 million at December 31, 2006. The twenty-one month CD
product declined by $7.8 million from $19.1 million at December 31, 2005 to
$11.3 million at December 31, 2006, as many depositors preferred the shorter
term specials. The CD growth occurred in all branches during 2006, although the
Savoy branch generated $6.2 million in growth in CDs, and Paris generated $4.4
million in branch deposits. Rantoul grew by $2.5 million in CDs in addition to
the $10.1 million in CDs acquired from CIB Marine Bancshares. CD specials in
effect at December 31, 2006 included a five-month CD at 5.17% with an annual
percentage yield of 5.25%), an eleven-month CD at 5.24% with an annual
percentage yield of 5.34%, and a twenty-one month CD at 4.60% with annual
percentage yield of 4.68%.

There were no federal funds purchased at December 31, 2006 compared to $2.5
million at December 31, 2005. Federal funds are typically used to provide
short-term funds. Federal Home Loan Bank advances at December 31, 2006 were
$32.8 million, a decrease of $10.4 million from the December 31, 2005 balance of
$43.2 million. During 2006, maturing advances totaled $8.4 million, another $9.0
million in convertible advances were called. The remaining $22.5 million
repayments on FHLB advances were applied against the line of credit. In
September, 2006, the Company converted $14.0 million from the open line of
credit to a fixed term convertible advance, with a rate of 4.12 percent, and a
lock out period of one year. At December 31, 2006, borrowings consisted of $32.8
million in long-term, fixed-rate advances, of which $25.5 million are fixed-rate
convertible advances. Convertible advances have specific lock-out periods,
usually one to three years, after which the Federal Home Loan Bank has the
option to convert the advance to a quarterly adjustable rate loan, with the
option of prepayment at the conversion date, or on any future date of rate
adjustment. At December 31, 2006, $11.5 million in convertible advances were
past the lock-out period, and are subject to possible call on a quarterly basis.
At December 31, 2006, the average rate on all Federal Home Loan Bank advances
was 4.20% compared to 4.02% at December 31, 2005.

Junior subordinated debentures remained $6.2 million at December 31, 2006 and
2005. Capital securities of $6.0 million were issued June 15, 2005, by a
statutory business trust, FBTC Statutory Trust I. The Company owns 100% of the
common equity of the trust, which is a wholly-owned subsidiary of the Company.
The $6.0 million in proceeds from the trust preferred issuance and an additional
$186,000 for the Company's investment in the common equity of the Trust, a total
of $6,186,000, was invested in the junior subordinated debentures of the
Company. As required by FIN 46R, the Company has not consolidated the investment
in the Trust. The trust was formed with the purpose of issuing trust preferred
securities and investing the proceeds from the sale of such trust preferred
securities in the debentures. The debentures held by the trust are the sole
assets of the trust. Distributions of the trust preferred securities are payable
at a variable rate of interest, which is equal to the interest rate being earned
by the trust on the debentures, and are recorded as interest expense by the
Company. The trust preferred securities are subject to mandatory redemption, in
whole or in part, upon repayment of the debentures.


                                       28

<PAGE>

The debentures are included as Tier I capital for regulatory capital purposes.
The debentures issued are first redeemable, in whole or part, by the Company on
June 15, 2010, and mature on June 15, 2035. The funds were used for the
acquisition of the common stock of Rantoul First Bank and for the repurchase of
First BancTrust Corporation common stock. Interest is fixed at a rate of 5.80%
for a period of five years, and then converts to a floating rate. Interest
payments are made quarterly beginning in September, 2005.

Interest payable increased by $684,000 from the December 31, 2005 balance of
$245,000 to $929,000 at December 31, 2006. The increase in interest payable was
due to an increase in accrued interest on deposits, partially offset by a
decrease in accrued interest on borrowings. Accrued interest on deposits
increased by $712,000 partially due to the large increase in certificates of
deposit. Additionally, the five month CD product promoted during 2006 accrues
interest during the entire term, and pays out at maturity. At December 31, 2006,
certificates of deposit with a five-month term totaled $14.5 million. Accrued
interest on brokered certificates of deposit of $27.8 million at December 31,
2006 totaled $526,000. This interest will be paid out upon maturity of the
underlying certificates of deposit. Accrued interest on borrowings decreased by
$28,000 due to a decrease in the amount of borrowed funds, which was partially
offset by an increase in interest rates.

Pass through payments received on loans sold increased by $48,000 from $75,000
at December 31, 2005 to $122,000 at December 31, 2006. Pass through payments
received on loans sold represents payments received loans which are sold but are
serviced by the Company, that have not been remitted to the investor. Advances
from borrowers for taxes and insurance decreased by $41,000 from $189,000 at
December 31, 2005 to $148,000 at December 31, 2006. Other liabilities slightly
increased by $36,000 from $1.4 million at December 31, 2005 to $1.6 million at
December 31, 2006.

Stockholders' equity at December 31, 2006 was $26.7 million compared to $26.0
million at December 31, 2005, an increase of $610,000. This increase was
primarily a result of an increase in retained earnings and reductions in the
unearned employee stock ownership plan shares and unearned incentive plan
shares, partially offset by decreases in paid in capital and additional
purchases of treasury stock. Retained earnings increased by $631,000 primarily
due to net income of $1.1 million offset by dividends declared and paid of
$543,000. The change of $176,000 in unallocated employee stock ownership plan
shares was due to the allocation of 30,408 shares to plan participants. The
Company reclassified $589,000 or 71,422 unearned incentive plan shares as of
January 1, 2006 accordance with SFAS No. 123(R). The remaining increase of
$408,000 in additional paid-in capital was primarily due to the current year
allocations of employee stock ownership shares and incentive plan shares.
Treasury stock increased by $591,000 from the purchase of 58,750 treasury shares
during 2006, partially offset by the issuance of shares from treasury stock for
the exercise of options for 10,000 shares of stock. All repurchased shares are
held as treasury shares to be used for general corporate purposes.


                                       29
<PAGE>

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company are in accordance with
accounting principles generally accepted in the United States and conform to
general practices within the banking industry. The Company's significant
accounting policies are described in detail in the notes to the Company's
consolidated financial statements for the year ended December 31, 2006 and 2005.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. The financial position and results of operations can
be affected by these estimates and assumptions and are integral to the
understanding of reported results. Critical accounting policies are those
policies that management believes are the most important to the portrayal of the
Company's financial condition and results, and they require management to make
estimates that are difficult, subjective, or complex.

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

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

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


                                       30

<PAGE>

Loan Servicing Rights - Loan servicing rights ("LSR") associated with loans
originated and sold, where servicing is retained, are capitalized and included
in the consolidated balance sheet. The value of the capitalized servicing rights
represents the present value of the future servicing fees arising from the right
to service loans in the portfolio. Critical accounting policies for LSRs relate
to the initial valuation and subsequent impairment tests. The methodology used
to determine the valuation of LSRs requires the development and use of a number
of estimates, including anticipated principal amortization and prepayments of
that principal balance. Events that may significantly affect the estimates used
are changes in interest rates, mortgage loan prepayment speeds, and the payment
performance of the underlying loans. The carrying value of the LSRs is
periodically reviewed for impairment based on a determination of fair value. For
purposes of measuring impairment, the servicing rights are compared to a
valuation prepared based on a discounted cash flow methodology utilizing current
prepayment speeds and discount rates. Impairment, if any, is recognized through
a valuation allowance and a corresponding charge to the income statement.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2006, the total amount of certificates scheduled to mature in
the following 12 months was $127.1 million.

The following table presents additional information about our contractual
obligations as of December 31, 2006, which by their terms, have contractual
maturity and termination dates subsequent to December 31, 2006 (dollars in
thousands):

<TABLE>
<CAPTION>
                                          Next 12    13-36     37-60    More than
                                          Months     Months    Months   60 Months    Totals
                                         --------   -------   -------   ---------   --------
<S>                                      <C>        <C>       <C>       <C>         <C>
CONTRACTUAL OBLIGATIONS:
   Certificates of deposit               $127,126   $20,912   $11,041    $   648    $159,727
   Federal Home Loan Bank advances             --     3,800    15,000     14,000      32,800
   Junior subordinated debt                    --        --        --      6,186       6,186
   Minimum operating lease commitments        397       274        14         --         685
                                         --------   -------   -------    -------    --------
      Totals                             $127,523   $24,986   $26,055    $20,834    $199,398
                                         ========   =======   =======    =======    ========
</TABLE>

Lease info is in separate worksheet

The Company's purchase obligations have no material impact on its cash flow or
liquidity, and accordingly, have not been included in the above table.

At December 31, 2006, the Company had outstanding commitments to originate loans
of $5.7 million. The commitments extended over varying periods of time with the
majority being disbursed within a one-year period. Loan commitments at fixed
rates of interest amounted to $3.9 million, with the remainder at floating
market rates. In addition, the Company had outstanding unused lines of credit to
borrowers aggregating $7.9 million for commercial lines, and $4.6 million for
consumer lines of credit, which includes $577,000 in unused letters of credit.
The Company also had an outstanding commitment to purchase $3.3 million of
federally guaranteed agricultural loans secured by farmland and farm equipment.


                                       31

<PAGE>

The following table presents additional information about our unfunded
commitments as of December 31, 2006, which by their terms have contractual
maturity dates subsequent to December 31, 2006 (dollars in thousands):

<TABLE>
<CAPTION>
                        Next 12    13-36    37-60   More than
                         Months   Months   Months   60 Months    Totals
                        -------   ------   ------   ---------   -------
<S>                     <C>       <C>      <C>      <C>         <C>
UNFUNDED COMMITMENTS:
   Lines of credit       $8,338    $667     $335      $3,132    $12,472
                         ======    ====     ====      ======    =======
</TABLE>

Changed to above to match footnote.

<TABLE>
<CAPTION>
                        Next 12    13-36    37-60   More than
                         Months   Months   Months   60 Months    Totals
                        -------   ------   ------   ---------   --------
<S>                     <C>       <C>      <C>      <C>         <C>
UNFUNDED COMMITMENTS:
   Letters of credit    $  577     $ --     $ --      $   --     $   577
   Lines of credit       8,290      138      335       3,131      11,894
                        ------     ----     ----      ------     -------
      Totals            $8,867     $138     $335      $3,131     $12,471
                        ======     ====     ====      ======     =======
</TABLE>

The Company believes that it has adequate resources to fund all of its
commitments. The Company's most liquid assets are cash and cash equivalents. The
level of cash and cash equivalents is dependent on the Company's operating,
financing, lending and investing activities during any given period. The level
of cash and cash equivalents at December 31, 2006 was $28.8 million. The
Company's future short-term requirements for cash are not expected to
significantly change. However, in the event that the Company should require
funds beyond its ability to generate them internally, additional sources of
funds are available, such as Federal Home Loan Bank advances. With sound capital
levels, the Company has several options for longer-term cash needs, such as for
future expansion and acquisitions.

A review of the Consolidated Statement of Cash Flows included in the
accompanying financial statements shows that the Company's cash and cash
equivalents ("cash") increased by $16.3 million in 2006 and by $3.3 million in
2005 and decreased by $1.2 million in 2004.

Cash increased in 2006 due to net cash provided by financing activities of $34.3
million and net cash provided by operating activities of $3.0 million, offset by
$20.9 million net cash used in investing activities. Cash provided by operating
activities included net income of $1.1 million, plus non cash adjustments to
income including the proceeds of $15.3 million from the sales of loans
originated for sale into the secondary market, and offset by $15.4 million in
loans originated for sale, depreciation and amortization of $652,000, the
provision for loan losses of $230,000, amortization of loan servicing rights of
$242,000, compensation expense related to ESOP and incentive plan, the change in
interest payable, partially offset by the net change in interest receivable of
$504,000.

Net cash used in investing activities during 2006 included net originations of
loans of $29.2 million, purchases of available for sale securities of $7.3
million, purchases of held to maturity securities of $1.9 million, and purchases
of premises and equipment of $5.3 million. Net cash provided in investing
activities included proceeds from the maturities of available for sale
securities of $18.2 million, proceeds from the maturities of held to maturity
securities of $544,000, proceeds from the redemption of Federal Home Loan Bank
stock of $2.9 million, and proceeds from the sales of available for sale
securities of $996,000. Net cash provided by financing activities included the
net increase in certificates of deposit of $53.6 million, and proceeds from
Federal Home Loan Bank advances of $29.5 million, partially offset by a net
decrease in demand deposits, money market, NOW and savings accounts,


                                       32

<PAGE>

$39.9 million in repayment of Federal Home Loan Bank advances, $684,000 for the
purchase of treasury stock, and $543,000 for the payment of dividends.

Cash increased in 2005 due to net cash provided by financing activities of $14.3
million and net cash provided by operating activities of $2.2 million, partially
offset by $13.1 million in net cash used in investing activities. Cash provided
by operating activities included net income of $1.2 million, plus non cash
adjustments to net income including the proceeds from sales of loans originated
for sale of $15.1 million, offset by $15.5 million in loans originated for sale
and net gain on loan sales of $291,000, the provision for loan losses of
$510,000, depreciation and amortization of $413,000, amortization of loan
servicing rights of $487,000, and compensation related to employee stock
ownership and incentive plans of $488,000, partially offset by Federal Home Loan
Bank stock dividends of $212,000 and the net change in deferred income taxes of
$189,000.

Net cash used in investing activities in 2005 included net originations in loans
of $25.7 million, purchases of available-for-sale securities of $9.3 million,
$2.3 million in net cash paid for the purchase of Rantoul First Bank (net of
cash received), and $2.7 million for purchases of premises and equipment. Net
cash provided in investing activities included $23.6 million in proceeds from
maturities of available-for-sale securities and $1.4 million in proceeds from
maturities of held-to-maturity securities. Net cash provided by financing
activities included $9.0 million net increase in certificates of deposit, $6.2
million in proceeds from the issuance of junior subordinated debentures, and
$2.0 million proceeds from Federal Home Loan Bank advances, partially offset by
a net decrease in demand deposits, money market, NOW and savings accounts,
purchases of $1.6 million of treasury stock, and dividends paid of $582,000.

Cash decreased in 2004 due to net cash used by investing activities of $7.3
million, partially offset by net cash provided by operating activities of $3.5
million and net cash provided by financing activities of $2.6 million. Cash
provided by operating activities included net income of $1.2 million, plus non
cash adjustments to net income including the proceeds from sales of loans
originated for sale of $17.8 million, offset by $17.4 million of loans
originated for sale and net gain on loan sales of $334,000, the provision for
loan losses of $515,000, net amortization of premiums and discounts on
securities of $190,000, depreciation and amortization of $325,000, compensation
related to employee stock ownership and incentive plans of $487,000, and
amortization of loan servicing rights of $630,000, partially offset by the
recovery of $242,000 of a previously identified impairment of loan servicing
rights.

Net cash used in investing activities in 2004 included $30.2 million in
purchases of available-for-sale and held-to-maturity securities, net
originations of loans of $12.0 million, and the purchase of premises and
equipment of $670,000, offset by proceeds from maturities of available-for-sale
and held-to-maturity securities of $34.7 million, proceeds from sales of
foreclosed assets of $357,000, and proceeds from sales of available-for-sale
securities of $514,000. Cash provided by financing activities included an
increase in certificates of deposits of $2.2 million, an increase in federal
funds purchased of $2.0 million, and $5.0 million in proceeds for the issuance
of Federal Home Loan Bank advances, offset by dividends paid of $575,000, a net
decrease in demand deposits, money market, NOW and


                                       33

<PAGE>

savings accounts of $5.8 million, and a net decrease of $202,000 in pass through
payments received on loans sold.

The Bank is required to maintain regulatory capital sufficient to meet tier I
leverage, tier I risk-based and total risk-based capital ratios of at least
4.0%, 4.0% and 8.0%, respectively. At December 31, 2006, the Bank exceeded each
of its capital requirements with ratios of 10.4%, 15.9% and 17.1%, respectively.

MANAGEMENT OF INTEREST RATE RISK

The principal objectives of the Company's interest rate risk management function
are: (i) to evaluate the interest rate risk included in certain balance sheet
accounts; (ii) to determine the level of risk appropriate given the Company's
business focus, operating environment, capital and liquidity requirements, and
performance objectives; (iii) to establish asset concentration guidelines; and
(iv) to manage the risk consistent with Board-approved guidelines. Through such
management, the Company seeks to reduce the vulnerability of its operations to
changes in interest rates and to manage the ratio of interest rate sensitive
assets to interest rate sensitive liabilities within specified maturity terms or
repricing dates. The Company's Board of Directors has established an
Asset/Liability Committee consisting of directors and senior management
officers, which is responsible for reviewing the Company's asset/liability
policies and interest rate risk position. Such committee generally meets on a
quarterly basis, and at other times as dictated by market conditions, and
reports to the Board of Directors.

The Company's key interest rate risk management tactics consists primarily of:
(i) emphasizing the attraction and retention of core deposits, which tend to be
a more stable source of funding; (ii) emphasizing the origination of adjustable
rate mortgage loan products and relatively short-term and medium-term commercial
and consumer loans for the in-house portfolio, although this is dependent
largely on the market for such loans; (iii) selling longer-term fixed-rate
one-to-four family mortgage loans into the secondary market; and (iv) investing
primarily in U.S. government agency investments and mortgage-backed securities.

Our ability to maintain net interest income depends upon earning a higher yield
on assets than the rates we pay on deposits and borrowings and sustaining this
positive interest rate spread during the fluctuations in prevailing interest
rates. Interest rate sensitivity is a measure of the difference between amounts
of interest-earning assets and interest-bearing liabilities that either re-price
or mature within a given period of time. The difference, or the interest rate
re-pricing "gap", provides an indication of how an institution's interest rate
spread will be affected by changes in interest rates. A gap is considered
positive when the amount of interest-rate sensitive assets exceeds the amount of
interest-rate sensitive liabilities, and is considered negative when the amount
of interest-rate sensitive liabilities exceeds the amount of interest-rate
sensitive assets. Generally, during a period of rising interest rates, a
negative gap within shorter maturities would adversely affect net interest
income, while a positive gap within shorter maturities would result in an
increase in net interest income. During a period of falling interest rates, a
negative gap within shorter maturities would result in an increase in net
interest income while a positive gap within shorter maturities would have the
opposite effect.


                                       34

<PAGE>

The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 2006, which mature or
re-price in the periods shown. Except as stated in the table, the amount of
assets and liabilities shown which re-price or mature during a particular period
were determined in accordance with the earlier of term to re-pricing or
contractual maturity. Cumulatively, as of December 31, 2006, the amount of the
Company's interest-bearing liabilities estimated to mature or re-price within
one year exceeded the Company's earning assets with the same time
characteristics by $77.0 million or 24.8% of the Company's total book assets.

<TABLE>
<CAPTION>
                                      Daily      1 to 3     3 to 12      1 to 3      3 to 5     Over 5
                                     Reprice     Months      Months      Years       Years      Years      Total
                                     -------   ---------   ---------   ---------   ---------   -------   --------
                                                              (dollars in thousands)
<S>                                  <C>       <C>         <C>         <C>         <C>         <C>       <C>
Interest-earning Assets:
   Loans receivable, net (1)         $     0   $  35,684   $  37,566   $  57,070   $  30,430   $25,529   $186,279
   Investment Securities (2,3,5,6)         0       9,109      13,217      21,164      11,278    14,527     69,295
   Interest-bearing Due From Banks    15,575           0           0           0           0         0     15,575
                                     -------   ---------   ---------   ---------   ---------   -------   --------
      TOTAL                           15,575      44,793      50,783      78,234      41,708    40,056    271,149
                                     -------   ---------   ---------   ---------   ---------   -------   --------
Interest-bearing Liabilities
   Deposits (4)                            0     106,234      67,907      21,776      14,114     7,540    217,571
   Borrowings (4)                          0           0      14,000      13,800       5,000     6,186     38,986
                                     -------   ---------   ---------   ---------   ---------   -------   --------
      TOTAL                                0     106,234      81,907      35,576      19,114    13,726    256,557
                                     -------   ---------   ---------   ---------   ---------   -------   --------
Gap                                   15,575     (61,441)    (31,124)     42,658      22,594    26,330     14,592
                                     -------   ---------   ---------   ---------   ---------   -------   --------
Cumulative Gap                       $15,575    ($45,866)   ($76,990)   ($34,332)   ($11,738)  $14,592   $ 14,592
                                     =======   =========   =========   =========   =========   =======   ========
Cumulative Gap as a %
   of Total Assets                       5.0%      -14.7%      -24.8%      -11.0%       -3.8%      4.7%       4.7%
</TABLE>

(1)  Fixed rate loans are slotted according to their final maturity date.
     Adjustable rate loans are slotted according to their next reprice date. The
     cash flows Resdiential R/E, Commercial R/E and Consumer Installment Loans
     all receive an amortizing treatment. The cash flows for Residential R/E are
     accelerated to reflect assumptions for prepayments.

(2)  Reflects re-pricing, contractual maturity, or anticipated call date.

(3)  Securities are classified as available for sale and held to maturity.

(4)  Adjusted to reflect next likely reset period.

(5)  The cash flows for mortgage-backed securities receive an amortizing
     treatment.

(6)  The cash flows for mortgage-backed securities are accelerated to reflect
     assumptions for prepayments.

The degree to which future Interest Margin is potentially negatively exposed to
changes in market interest rates is known as EARNINGS-AT-RISK. To effectively
evaluate Earnings-at-Risk, the Company employs an EARNINGS SIMULATION. The
Earnings Simulation is a series of scenarios where 12 month future earnings are
forecast holding market interest rates constant, forecast simulating rates
rising progressively, and forecast simulating rates falling progressively. The
interest rate environment where earnings are estimated to be lower than the
"rates constant" scenario is the rate environment where earnings are "at risk".
The Earnings Simulation is the most robust and reliable technique for measuring
Interest Rate Risk, and goes well beyond mere gap analysis. The Earnings
Simulation ultimately flows from an option adjusted balance sheet cash flow
forecast. The Simulation not only


                                       35

<PAGE>

takes into account that cash flows are dynamic and their streams often change
with shifts in market interest rates, but also the relative degrees with which
the rates associated with various balance sheet items react and adjust to
changes in market interest rates.

The following table sets forth the summarized results of the Earnings Simulation
prepared as of December 31, 2006.

EARNINGS AT RISK
2006 Earnings Forecast With Rate Change Impact

<TABLE>
<CAPTION>
                                  $CHANGE              $CHANGE
                                   RATES     4Q-2006    RATES
                                  FALLING   EARNINGS   RISING
                                   100 BP   FORECAST    100 BP
                                  -------   --------   -------
                                         (in thousands)
<S>                               <C>       <C>        <C>
INTEREST INCOME
   FF Sold & Due From Banks         -52         348        52
   Securities                      -141       3,366       125
   Total Loans                     -336      13,190       328
   Other Interest Income            -29         147        29
                                   ----      ------     -----
      TOTAL INTEREST INCOME        -558      17,051       534

INTEREST EXPENSE
   NOW, MMDA & Savings             -151         993        60
   Small CD's                      -298       3,526       297
   Large CD's                      -267       2,337       267
   Structured Debt                   -2       1,976         2
                                   ----      ------     -----
      TOTAL INTEREST EXPENSE       -718       8,832       626

NET INTEREST INCOME                 160       8,219       -92
   Provision Expense                  0         285         0
   Non-Interest Income                0       2,840         0
   Non-Interest Expense               0       9,000         0
   Realized Security G/L              0           0         0
   Income Before Taxes              160       1,774       -92
   Taxes                             28         312       -16
                                   ----      ------     -----
NET INCOME                          132       1,462       -76

% CHANGE IN NET INTEREST INCOME    1.95%                -1.12%
</TABLE>

The Company tends to be liability sensitive due to the levels of non-maturity
deposits (NOW, Savings, and MMDA), the offering rates of which are available to
be reset at least monthly, and certificates of deposit that will mature within
twelve months. The effect of interest rate increases on loans, since they are
subject to competitive pressure, tends to lag behind change in market rates.
This lag generally lessens the positive impact on net interest income during a
period of rising interest rates. Based on information provided in the table,
assuming no significant impact from competitive pressure, the effect of an
increase in interest rates of 100 basis points would be a decrease in annualized
net interest income of approximately $92,000.


                                       36

<PAGE>

IMPACT OF INFLATION AND CHANGING PRICES

The consolidated financial statements of the Company and related notes presented
herein have been prepared in accordance with accounting principles generally
accepted in the United States of America, which generally require the
measurement of financial position and operating results in terms of historical
dollars, without considering changes in relative purchasing power over time due
to inflation. Unlike most industrial companies, virtually all of the Bank's
assets and liabilities are monetary in nature. As a result, interest rates
generally have a more significant impact on the Bank's performance than does the
effect of inflation. Interest rates do not necessarily move in the same
direction or in the same magnitude as the prices of goods and services, since
such prices are affected by inflation to a larger extent than interest rates.

IMPACT OF ACCOUNTING CHANGES

In September, 2006, the Financial Accounting Standards Board (FASB) ratified
Emerging Issues Task Force No. 06-4, Postretirement Benefits Associated with
Split-Dollar Life Insurance (EITF 06-4). EITF 06-4 requires
deferred-compensation or postretirement benefit aspects of an endorsement-type
split-dollar life insurance arrangement to be recognized as a liability by the
employer. The liability for future benefits should be recognized based on the
substantive agreement with the employee, which may be either to provide a future
death benefit or to pay for the future cost of the life insurance. EITF 06-4 is
effective for fiscal years beginning after December 15, 2007. The Company is
evaluating the impact of the adoption of EITF 06-4 on its financial position,
results of operations, and cash flows.

RISK FACTORS (FBTC)

Investing in our common stock involves various risks which are particular to our
company, our industry and our market area. Several risk factors regarding
investing in our common stock are discussed below. This listing should not be
considered as all-inclusive. If any of the following risks were to occur, we may
not be able to conduct our business as currently planned and our financial
condition or operating results could be negatively impacted. These matters could
cause the trading price of our common stock to decline in future periods.

WE ARE GEOGRAPHICALLY CONCENTRATED IN EAST CENTRAL ILLINOIS, AND CHANGES IN
LOCAL ECONOMIC CONDITIONS COULD IMPACT OUR PROFITABILITY.

We operate primarily in Champaign, Clark and Edgar Counties in Illinois, and
most of our loan customers and substantially all of our deposit and other
customers live or have operations in, or contiguous to Champaign, Clark, and
Edgar Counties, (our "primary market area"). Accordingly, our success
significantly depends upon the growth in population, income levels, deposits and
housing starts in our primary market area, along with the continued attraction
of business ventures to the area. Our profitability is impacted by the changes
in general economic conditions in this market. Additionally, unfavorable local
or national economic conditions could reduce our growth rate, affect the ability
of our customers to repay their loans to us and generally affect our financial
condition and results of operations.


                                       37

<PAGE>

We are less able than a larger institution to spread the risks of unfavorable
local economic conditions across a large number of diversified economies.
Moreover, we cannot give any assurance that we will benefit from any market
growth or favorable economic conditions in our primary market areas if they do
occur.

OUR CONTINUED GROWTH MAY REQUIRE THE NEED FOR ADDITIONAL CAPITAL AND FURTHER
REGULATORY APPROVALS WHICH, IF NOT OBTAINED, COULD ADVERSELY IMPACT OUR
PROFITABILITY AND IMPLEMENTATION OF OUR CURRENT BUSINESS PLAN.

To continue to grow, we will need to provide sufficient capital to our
subsidiary, First Bank &Trust, s.b., through earnings generation, additional
equity-offerings or borrowed funds or any combination of these sources of funds.
Should we incur indebtedness, we are required to obtain certain regulatory
approvals beforehand. Should our growth exceed our expectations, we may need to
raise additional capital over our projected capital needs. However, our ability
to raise additional capital, if needed, will depend on conditions in the capital
markets at that time, which are outside our control, as well as our financial
performance. Accordingly, we cannot assure our ability to raise additional
capital if needed on terms acceptable to us. If we cannot raise additional
capital when needed, our ability to further expand and grow our operations could
be materially impaired. Additionally, our current plan involves both increasing
our branch network and acquiring existing financial institutions, which will
require capital expenditures. Our expansion efforts may also require certain
regulatory approvals. Should we not be able to obtain such approvals or
otherwise not be able to grow our asset base, our ability to attain our
long-term profitability goals will be more difficult.

WE HAVE A CONCENTRATION OF CREDIT EXPOSURE TO BORROWERS IN CERTAIN INDUSTRIES
AND WE ALSO TARGET SMALL TO MEDIUM-SIZED BUSINESSES.

At December 31, 2006, we had significant credit exposures to borrowers in
agricultural and related businesses as well as commercial real estate
development. If either of these industries experience an economic slowdown and,
as a result, the borrowers in these industries are unable to perform their
obligations under their existing loan agreements, our earnings could be
negatively impacted, causing the value of our common stock to decline.

Additionally, a substantial focus of our marketing and business strategy is to
serve both household and small to medium-sized businesses which are related to
agriculture and real estate development in our primary market area. As a result,
a relatively high percentage of our loan portfolio consists of agricultural and
related business loans and commercial real estate development loans. As December
31, 2006, our agricultural loans accounted for 24.3% of our total loans while
commercial real estate loans totaled 17.9% of our total loans. Producers of
agricultural products may be negatively impacted by weather-related events that
may affect their ability to repay their loans. Even though our commercial loans
are primarily secured by real estate, during periods of economic weakness, small
to medium-sized businesses may be impacted more severely than larger businesses.
Consequently, the ability of such businesses to repay their loans may
deteriorate, which would adversely impact our results of operations and
financial condition.


                                       38
<PAGE>

IF OUR ALLOWANCE FOR LOAN LOSSES IS NOT SUFFICIENT TO COVER ACTUAL LOAN LOSSES,
OUR EARNINGS WILL DECREASE.

If loan customers with significant loan balances fail to repay their loans
according to the terms of these loans, our earnings would suffer. We make
various assumptions and judgments about the collectibility of our loan
portfolio, including the creditworthiness of our borrowers and the value of any
collateral securing the repayment of our loans. We maintain an allowance for
loan losses in an attempt to cover the inherent risks associated with lending.
In determining the size of this allowance, we rely on an analysis of our loan
portfolio based on volume and types of loans, internal loan classifications,
trends in classifications, volume and trends in delinquencies, nonaccruals and
chargeoffs, national and local economic conditions, other factors and other
pertinent information. If our assumptions are inaccurate, our current allowance
may not be sufficient to cover potential loan losses, and additional provisions
may be necessary which would decrease our earnings.

In addition, federal and state regulators periodically review our loan portfolio
and may require us to increase our allowance for loan losses or recognize loan
chargeoffs. Their conclusions about the quality of our loan portfolio may be
different than ours. Any increase in our allowance for loan losses or loan
chargeoffs as required by these regulatory agencies could have a negative effect
on our operating results.

FLUCTUATIONS IN INTEREST RATES COULD REDUCE OUR PROFITABILITY.

Changes in interest rates may affect our level of interest income, the primary
component of our gross revenue, as well as the level of our interest expense.
Interest rate fluctuations are caused by many factors which, for the most part,
are not under our direct control. For example, national monetary policy plays a
significant role in the determination of interest rates. Additionally,
competitor pricing and the resulting negotiations that occur with our customers
also impact the rates we collect on loans and the rates we pay on deposits.

As interest rates change, we expect that we will periodically experience "gaps"
in the interest rate sensitivities of our assets and liabilities, meaning that
either our interest-bearing liabilities will be more sensitive to changes in
market interest rates than our interest-earning assets, or vice versa. In either
event, if market interest rates should move contrary to our position, this 'gap"
may work against us, and our earnings may be negatively affected.

Changes in the level of interest rates also may negatively affect our ability to
originate real estate loans, the value of our assets and our ability to realize
gains from the sale of our assets, all of which ultimately affect our earnings.
A decline in the market value of our assets may limit our ability to borrow
additional funds. As a result, we could be required to sell some of our loans
and investments under adverse market conditions, with terms that are not
favorable to us, in order to maintain our liquidity. If those sales are made at
prices lower than the amortized costs of the investments, we will incur losses.

LOSS OF OUR SENIOR EXECUTIVE OFFICERS OR OTHER KEY EMPLOYEES COULD IMPAIR OUR
RELATIONSHIP WITH OUR CUSTOMERS AND ADVERSELY AFFECT OUR BUSINESS.


                                       39

<PAGE>

We have assembled a senior management team which has a substantial background
and experience in banking and financial services in the market. Loss of these
key personnel could negatively impact our earnings because of their skills,
customer relationships and/or the potential difficulty of promptly replacing
them.

COMPETITION WITH OTHER BANKING INSTITUTIONS COULD ADVERSELY AFFECT OUR
PROFITABILITY.

A number of banking institutions in the market have higher lending limits, more
banking offices, and a larger market share. In some respects, this may place
these competitors in a competitive advantage, although many of our customers
have selected us because of service quality concerns at the larger enterprises.
This competition may limit or reduce our profitability, reduce our growth and
adversely affect our results of operations and financial condition.

WE MAY ISSUE ADDITIONAL COMMON STOCK OR OTHER EQUITY SECURITIES IN THE FUTURE
WHICH COULD DILUTE THE OWNERSHIP INTEREST OF EXISTING SHAREHOLDERS.

In order to maintain our capital at desired or regulatory-required levels, we
may be required to issue additional shares of common stock, or securities
convertible into, exchangeable for or representing rights to acquire shares of
common stock. We may sell these shares at prices below the current market price
of shares, and the sale of these shares may significantly dilute shareholder
ownership. We could also issue additional shares in connection with acquisitions
of other financial institutions.

EVEN THOUGH OUR COMMON STOCK IS CURRENTLY TRADED ON THE NASDAQ STOCK MARKET, IT
HAS LESS LIQUIDITY THAN THE AVERAGE STOCK QUOTED ON THAT OR SIMILAR SECURITIES
EXCHANGES.

The trading volume in our common stock on the Nasdaq market has been relatively
low when compared with larger companies listed on the Nasdaq Stock Market or
similar exchanges.

We cannot predict the effect, if any, that future sales of our common stock in
the market, or the availability of shares of common stock for sale in the
market, will have on the market price of our common stock. We can give no
assurance that sales of substantial amounts of common stock in the market, or
the potential for large amounts of sales in the market, would not cause the
price of our common stock to decline or impair our future ability to raise
capital through sales of our common stock.

The market price of our common stock may fluctuate in the future, and these
fluctuations may be unrelated to our performance. General market price declines
or overall market volatility in the future could adversely affect the price of
our common stock, and the current market price may not be indicative of future
market prices.

IF A CHANGE IN CONTROL OR CHANGE IN MANAGEMENT IS DELAYED OR PREVENTED, THE
MARKET PRICE OF OUR COMMON STOCK COULD BE NEGATIVELY AFFECTED.


                                       40

<PAGE>

Provisions in our corporate documents, as well as certain federal and state
regulations, may make it difficult and expensive to purse a tender offer, change
in control or takeover attempt that our board of directors opposes. As a result,
our shareholders may not have an opportunity to participate in such a
transaction, and the trading price of our stock may not rise to the level of
other institutions that are more vulnerable to hostile takeovers. Anti-takeover
provisions contained in our charter also will make it more difficult for an
outside shareholder to remove our current board of directors.

THE AMOUNT OF COMMON STOCK OWNED BY, AND OTHER COMPENSATION ARRANGEMENTS WITH,
OUR OFFICERS AND DIRECTORS MAY MAKE IT MORE DIFFICULT TO OBTAIN SHAREHOLDER
APPROVAL OF POTENTIAL TAKEOVERS THAT THEY OPPOSE.

As of December 31, 2006, directors and executive officers beneficially owned
approximately 19.9% of our common stock. Employment agreements with our senior
management also provide for significant payments under certain circumstances
following a change in control. These compensation arrangements, together with
the common stock, option ownership and grants of stock not yet vested in of our
board and management could make it difficult or expensive to obtain majority
support for shareholder proposals or potential acquisition proposals of us that
our directors and officers oppose.

OUR BUSINESS IS DEPENDENT ON TECHNOLOGY, AND AN INABILITY TO INVEST IN
TECHNOLOGICAL IMPROVEMENTS MAY ADVERSELY AFFECT OUR RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.

The financial services industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, the effective use of technology increases
efficiency and enables financial institutions to reduce costs. We have made
significant investments in data processing, management information systems and
internet banking accessibility. Our future success will depend in part upon our
ability to create additional efficiencies in our operations through the use of
technology, particularly in light of our past and projected growth strategy.
Many of our competitors have substantially greater resources to invest in
technological improvements. We cannot make assurances that our technological
improvements will increase our operational efficiency or that we will be able to
effectively implement new technology-driven products and services or be
successful in marketing these products and services to our customers.

OUR INTERNAL CONTROL OVER FINANCIAL REPORTING MAY HAVE WEAKNESSES OR
INADEQUACIES THAT MAY BE MATERIAL.

Section 404 of the Sarbanes-Oxley Act of 2002 will require us to perform an
evaluation of our internal control over financial reporting and our auditor to
attest to such evaluation on an annual basis, unless these requirements are
modified for smaller public companies. Ongoing compliance with these
requirements is expected to be expensive and time-consuming and may negatively
impact our results of operations. While our management has not identified any
material weaknesses relating to our internal controls at December 31, 2006, we
cannot make any assurance that material weaknesses in our internal control over
financial reporting will not be identified in the future. If we are unable to
complete an evaluation of our internal

                                       41

<PAGE>

control over financial reporting and our auditor is not able to timely attest
to such evaluation, we may be subject to regulatory scrutiny, and a loss of
public confidence in our internal control over financial reporting which may
cause the value of our common stock to decrease.

WE ARE SUBJECT TO VARIOUS STATUTES AND REGULATIONS THAT MAY LIMIT OUR ABILITY TO
TAKE CERTAIN ACTIONS.

We operate in a highly regulated industry and are subject to examination,
supervision, and comprehensive regulation by various regulatory agencies. Our
compliance with these regulations is costly and restricts certain of our
activities, including payment of dividends, mergers and acquisitions,
investments, loans and interest rates charged, interest rates paid on deposits
and locations of offices. We are also subject to capitalization guidelines
established by our regulators, which require us to maintain adequate capital to
support our growth.

The laws and regulations applicable to the banking industry could change at any
time, and we cannot predict the effects of these changes on our business and
profitability. Because government regulations greatly affects the business and
financial results of all commercial banks and bank holding companies, our cost
of compliance could adversely affect our ability to operate profitably.


                                       42

<PAGE>

                              REPORT OF INDEPENDENT
                        REGISTERED PUBLIC ACCOUNTING FIRM

Audit Committee, Board of Directors
and Stockholders
First BancTrust Corporation
Paris, Illinois

We have audited the accompanying consolidated balance sheets of First BancTrust
Corporation (Company) as of December 31, 2006 and 2005, and the related
consolidated statements of income, stockholders' equity, and cash flows for each
of the three years in the period ended December 31, 2006. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

We conducted our audits in accordance with standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of First BancTrust
Corporation as of December 31, 2006 and 2005, and the results of its operations
and its cash flows for each of the three years in the period ended December 31,
2006, in conformity with accounting principles generally accepted in the United
States of America.

Decatur, Illinois
March 14, 2007


                                       43

<PAGE>

                           FIRST BANCTRUST CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                     2006           2005
                                                                 ------------   ------------
<S>                                                              <C>            <C>
ASSETS
   Cash and due from banks                                       $ 13,216,243   $  7,337,584
   Interest-bearing demand deposits                                15,575,106      5,109,549
                                                                 ------------   ------------
         Cash and cash equivalents                                 28,791,349     12,447,133
                                                                 ------------   ------------
   Available-for-sale securities                                   64,515,293     76,424,175
   Held-to-maturity securities (fair value of $4,661,650 and
      $3,383,547)                                                   4,779,948      3,437,417
   Loans held for sale, net of unrealized losses of $2,617 and
      $4,784 at December 31, 2006 and 2005                            835,904        642,198
   Loans, net of allowance for loan losses of $2,222,355 and
      $2,662,450 at December 31, 2006 and 2005                    185,443,561    156,884,910
   Premises and equipment                                          11,016,532      6,386,074
   Federal Home Loan Bank stock                                     3,748,855      6,608,412
   Foreclosed assets held for sale, net                               366,201        267,200
   Interest receivable                                              2,919,235      2,415,689
   Deferred income taxes                                            1,489,866      1,381,511
   Loan servicing rights                                              351,114        462,341
   Cash surrender value of life insurance                           5,007,722      4,824,886
   Goodwill                                                           541,474        541,474
   Core deposit intangibles                                           763,954        483,752
   Other assets                                                       486,791        657,973
                                                                 ------------   ------------
         Total assets                                            $311,057,799   $273,865,145
                                                                 ============   ============
</TABLE>

See Notes to Consolidated Financial Statements


                                       44

<PAGE>

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                           2006           2005
                                                                       ------------   ------------
<S>                                                                    <C>            <C>
LIABILITIES
   Deposits
      Demand                                                           $ 25,032,511   $ 21,528,960
      Savings, NOW, and money market                                     57,844,273     66,341,936
      Time                                                              159,726,297    106,104,371
                                                                       ------------   ------------
         Total deposits                                                 242,603,081    193,975,267
                                                                       ------------   ------------
   Federal funds purchased                                                       --      2,500,000
   Federal Home Loan Bank advances                                       32,800,000     43,200,000
   Junior subordinated debentures                                         6,186,000      6,186,000
   Pass through payments received on loans sold                             122,282         74,695
   Advances from borrowers for taxes and insurance                          148,051        189,366
   Interest payable                                                         929,094        245,118
   Other liabilities                                                      1,613,425      1,448,521
                                                                       ------------   ------------
         Total liabilities                                              284,401,933    247,818,967
                                                                       ------------   ------------
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY
   Preferred stock, $.01 par value; authorized and unissued -
      1,000,000 shares
   Common stock, $.01 par value; authorized 5,000,000 shares;
      Issued 3,041,750 shares
      Outstanding - 2006 - 2,318,700 shares, 2005 - 2,367,450 shares         30,418         30,418
   Additional paid-in capital                                            14,833,574     15,015,139
   Retained earnings                                                     19,693,271     19,061,990
   Unearned incentive plan shares; 0 shares,
      2005 - 71,422 shares                                                       --       (589,364)
   Unearned ESOP compensation; 68,494 shares,
      2005 - 98,902 shares                                                 (395,837)      (571,570)
   Accumulated other comprehensive loss                                    (679,414)      (665,423)
   Treasury stock, at cost
      Common: 2006 - 723,050 shares, 2005 - 674,300 shares               (6,826,146)    (6,235,012)
                                                                       ------------   ------------
         Total stockholders' equity                                      26,655,866     26,046,178
                                                                       ------------   ------------
         Total liabilities and stockholders' equity                    $311,057,799   $273,865,145
                                                                       ============   ============
</TABLE>


                                    45
<PAGE>

                           FIRST BANCTRUST CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                            2006          2005          2004
                                                        -----------   -----------   -----------
<S>                                                     <C>           <C>           <C>
INTEREST AND DIVIDEND INCOME
   Loans
      Taxable                                           $12,644,476   $ 9,370,277   $ 7,980,443
      Tax-exempt                                             59,513        61,896        64,193
   Securities
      Taxable                                             2,676,412     2,775,099     3,043,768
      Tax-exempt                                            521,787       466,712       382,813
   Dividends on Federal Home Loan Bank stock                186,479       212,394       249,387
   Deposits with financial institutions and other           203,693       112,507        53,490
                                                        -----------   -----------   -----------
         Total interest and dividend income              16,292,360    12,998,885    11,774,094
                                                        -----------   -----------   -----------
INTEREST EXPENSE
   Deposits                                               6,363,391     3,506,395     2,890,651
   Federal Home Loan Bank advances and other debt         2,021,927     1,826,035     1,506,303
                                                        -----------   -----------   -----------
         Total interest expense                           8,385,318     5,332,430     4,396,954
                                                        -----------   -----------   -----------
NET INTEREST INCOME                                       7,907,042     7,666,455     7,377,140
PROVISION FOR LOAN LOSSES                                   230,000       510,145       515,001
                                                        -----------   -----------   -----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES       7,677,042     7,156,310     6,862,139
                                                        -----------   -----------   -----------
NONINTEREST INCOME
   Customer service fees                                  1,074,097       965,684       883,920
   Other service charges and fees                           905,621       755,606       788,503
   Net gains on loan sales                                  259,479       291,259       333,862
   Net realized gains on sales of available-for-sale
      securities                                             12,106       117,959        97,036
   Loan servicing fees                                      437,335       489,196       658,487
   Brokerage fees                                            85,825        85,425        71,676
   Abstract and title fees                                  312,761       349,733       334,846
   Increase in cash surrender value of life insurance       215,014       176,560       177,350
   Other                                                    159,345       106,172       123,482
                                                        -----------   -----------   -----------
         Total noninterest income                         3,461,583     3,337,594     3,469,162
                                                        -----------   -----------   -----------
</TABLE>

See Notes to Consolidated Financial Statements


                                       46

<PAGE>

<TABLE>
<CAPTION>
                                                        2006         2005         2004
                                                     ----------   ----------   ----------
<S>                                                  <C>          <C>          <C>
NONINTEREST EXPENSE
   Salaries and employee benefits                    $5,068,424   $4,642,557   $4,629,509
   Net occupancy expense                                685,911      437,944      344,529
   Equipment expense                                  1,055,258      831,912      786,487
   Data processing fees                                 615,035      485,944      441,052
   Professional fees                                    455,870      460,101      481,039
   Foreclosed assets expense, net                        87,139       63,510       71,210
   Marketing expense                                    242,413      334,164      343,132
   Printing and office supplies                         164,675      154,171      174,757
   Amortization of loan servicing rights                242,327      486,792      630,182
   Recovery of impairment of loan servicing rights           --      (24,191)    (242,448)
   Other                                              1,166,882    1,060,033      904,996
                                                     ----------   ----------   ----------
      Total noninterest expense                       9,783,934    8,932,937    8,564,445
                                                     ----------   ----------   ----------
INCOME BEFORE INCOME TAXES                            1,354,691    1,560,967    1,766,856
PROVISION FOR INCOME TAXES                              238,862      313,272      539,123
                                                     ----------   ----------   ----------
NET INCOME                                           $1,115,829   $1,247,695   $1,227,733
                                                     ==========   ==========   ==========
BASIC EARNINGS PER SHARE                             $     0.51   $     0.56   $     0.54
                                                     ==========   ==========   ==========
DILUTED EARNINGS PER SHARE                           $     0.48   $     0.52   $     0.51
                                                     ==========   ==========   ==========
</TABLE>


                                       47
<PAGE>

                           FIRST BANCTRUST CORPORATION
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                  YEARS ENDED DECEMBER 31, 2006, 2005 AND 2004

<TABLE>
<CAPTION>
                                                     COMMON STOCK       ADDITIONAL
                                                 -------------------       PAID
                                                   SHARES     AMOUNT   -IN CAPITAL
                                                 ---------   -------   -----------
<S>                                              <C>         <C>       <C>
BALANCE, JANUARY 1, 2004                         2,500,450   $30,418   $14,564,476

   Comprehensive income
      Net income                                        --        --            --
      Change in unrealized appreciation on
         available-for-sale securities, net of
         taxes                                          --        --            --

            Total comprehensive income

   Dividends on common stock, $.23 per share            --        --            --
   Purchase of treasury stock (5,600 shares)        (5,600)       --            --
   Incentive plan shares allocated (13,704
      shares)                                           --        --        (3,426)
   Tax benefit related to incentive plan                --        --        25,129
   ESOP shares earned (30,408 shares)                   --        --       201,267
                                                 ---------   -------   -----------
BALANCE, DECEMBER 31, 2004                       2,494,850    30,418    14,787,446

   Comprehensive income
      Net income                                        --        --            --
      Change in unrealized appreciation on
         available-for-sale securities, net of
         taxes                                          --        --            --

            Total comprehensive income

   Dividends on common stock, $.24 per share            --        --            --
   Purchase of treasury stock (131,600 shares)    (131,600)       --            --
   Stock options exercised (4,200 shares)            4,200        --         4,400
   Incentive plan shares allocated (13,704
      shares)                                           --        --        (3,426)
   Tax benefit related to stock options
      exercised and incentive plan                      --        --        24,401
   ESOP shares earned (30,408 shares)                   --        --       202,318
                                                 ---------   -------   -----------
BALANCE, DECEMBER 31, 2005                       2,367,450    30,418    15,015,139

   Comprehensive income
      Net income                                        --        --            --
      Change in unrealized depreciation on
         available-for-sale securities, net of
         taxes                                          --        --            --

            Total comprehensive income

   Transfer of unearned incentive plan shares
      to paid-in capital                                --        --      (589,364)
   Cumulative effect of the initial
      application of SAB 108                            --        --            --
   Dividends on common stock, $.24 per share            --        --            --
   Purchase of treasury stock (58,750 shares)      (58,750)       --            --
   Stock options exercised (10,000 shares)          10,000        --         5,500
   Incentive plan shares allocated (20,099
      shares)                                           --        --       190,174
   Tax benefit related to stock options
      exercised and incentive plan                      --        --        26,881
   ESOP shares earned (30,408 shares)                   --        --       185,244
                                                 ---------   -------   -----------
BALANCE, DECEMBER 31, 2006                       2,318,700   $30,418   $14,833,574
                                                 =========   =======   ===========
</TABLE>

See Notes to Consolidated Financial Statements


                                       48

<PAGE>

<TABLE>
<CAPTION>
                                                                UNEARNED                   ACCUMULATED
                                                               INCENTIVE     UNEARNED         OTHER
                                                   RETAINED      PLAN          ESOP       COMPREHENSIVE     TREASURY
                                                   EARNINGS      SHARES    COMPENSATION   INCOME (LOSS)      STOCK         TOTAL
                                                 -----------   ---------   ------------   -------------   -----------   -----------
<S>                                              <C>           <C>         <C>            <C>             <C>           <C>
BALANCE, JANUARY 1, 2004                         $17,743,300   $(815,480)   $(923,034)     $   355,593    $(4,563,665)  $26,391,608

   Comprehensive income
      Net income                                   1,227,733          --           --               --             --     1,227,733
      Change in unrealized appreciation on
         available-for-sale securities, net of
         taxes                                            --          --           --           59,634             --        59,634
                                                                                                                        -----------
            Total comprehensive income                                                                                    1,287,367

   Dividends on common stock, $.23 per share        (574,768)         --           --               --             --      (574,768)
   Purchase of treasury stock (5,600 shares)              --          --           --               --        (69,104)      (69,104)
   Incentive plan shares allocated (13,704
      shares)                                             --     113,058           --               --             --       109,632
   Tax benefit related to incentive plan                  --          --           --               --             --        25,129
   ESOP shares earned (30,408 shares)                     --          --      175,732               --             --       376,999
                                                 -----------   ---------    ---------      -----------    -----------   -----------
BALANCE, DECEMBER 31, 2004                        18,396,265    (702,422)    (747,302)         415,227     (4,632,769)   27,546,863

   Comprehensive income
      Net income                                   1,247,695          --           --               --             --     1,247,695
      Change in unrealized appreciation on
         available-for-sale securities, net of
         taxes                                            --          --           --       (1,080,650)            --    (1,080,650)
                                                                                                                        -----------
            Total comprehensive income                                                                                      167,045

   Dividends on common stock, $.24 per share        (581,970)         --           --               --             --      (581,970)
   Purchase of treasury stock (131,600 shares)            --          --           --               --     (1,639,297)   (1,639,297)
   Stock options exercised (4,200 shares)                 --          --           --               --         37,054        41,454
   Incentive plan shares allocated (13,704
      shares)                                             --     113,058           --               --             --       109,632
   Tax benefit related to stock options
      exercised and incentive plan                        --          --           --               --             --        24,401
   ESOP shares earned (30,408 shares)                     --          --      175,732               --             --       378,050
                                                 -----------   ---------    ---------      -----------    -----------   -----------
BALANCE, DECEMBER 31, 2005                        19,061,990    (589,364)    (571,570)        (665,423)    (6,235,012)   26,046,178
   Comprehensive income
      Net income                                   1,115,829          --           --               --             --     1,115,829
      Change in unrealized depreciation on
         available-for-sale securities, net of
         taxes                                            --          --           --          (13,991)            --       (13,991)
                                                                                                                        -----------
            Total comprehensive income                                                                                    1,101,838

   Transfer of unearned incentive plan shares
      to paid-in capital                                  --     589,364           --               --             --            --
   Cumulative effect of the initial
      application of SAB 108                          58,000          --           --               --             --        58,000
   Dividends on common stock, $.24 per share        (542,548)         --           --               --             --      (542,548)
   Purchase of treasury stock (58,750 shares)             --          --           --               --       (684,334)     (684,334)
   Stock options exercised (10,000 shares)                --          --           --               --         93,200        98,700
   Incentive plan shares allocated (20,099
      shares)                                             --          --           --               --             --       190,174
   Tax benefit related to stock options
      exercised and incentive plan                        --          --           --               --             --        26,881
   ESOP shares earned (30,408 shares)                     --          --      175,733               --             --       360,977
                                                 -----------   ---------    ---------      -----------    -----------   -----------
BALANCE, DECEMBER 31, 2006                       $19,693,271   $      --    $(395,837)     $  (679,414)   $(6,826,146)  $26,655,866
                                                 ===========   =========    =========      ===========    ===========   ===========
</TABLE>


                                       49

<PAGE>

                           FIRST BANCTRUST CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                   2006           2005           2004
                                                               ------------   ------------   ------------
<S>                                                            <C>            <C>            <C>
OPERATING ACTIVITIES
   Net income                                                  $  1,115,829   $  1,247,695   $  1,227,733
   Items not requiring (providing) cash
      Depreciation and amortization                                 651,548        413,487        325,332
      Provision for loan losses                                     230,000        510,145        515,001
      Loss on foreclosed assets, net                                 27,908         20,868         10,580
      Donation of fixed assets                                           --             --         21,031
      Loss on premises and equipment                                 93,260         89,188          6,315
      Amortization of premiums and discounts on
         securities, net                                             49,390         67,397        189,845
      Amortization of loan servicing rights                         242,327        486,792        630,182
      Recovery for impairment of loan servicing rights                   --        (24,191)      (242,448)
      Deferred income taxes                                         (99,486)      (189,433)       105,313
      Amortization of intangible assets                              68,723         42,120         11,856
      Net realized gains on available-for-sale securities           (12,106)      (117,959)       (97,036)
      Net gain on loan sales                                       (259,479)      (291,259)      (333,862)
      Federal Home Loan Bank stock dividends                             --       (212,186)      (249,200)
      Compensation expense related to ESOP and incentive
         plan                                                       551,151        487,682        486,631
      Loans originated for sale                                 (15,410,475)   (15,494,804)   (17,375,955)
      Proceeds from sales of loans originated for sale           15,345,148     15,113,485     17,844,887
   Changes in
      Interest receivable                                          (503,546)       (73,789)        58,649
      Cash surrender value of life insurance                       (182,836)      (176,560)      (177,350)
      Other assets                                                  171,182        (53,981)       305,359
      Interest payable                                              683,976        104,617          9,411
      Other liabilities                                             249,785        244,436        210,001
                                                               ------------   ------------   ------------
         Net cash provided by operating activities                3,012,299      2,193,750      3,482,275
                                                               ------------   ------------   ------------
INVESTING ACTIVITIES
   Purchases of available-for-sale securities                    (7,338,757)    (9,325,372)   (25,243,873)
   Proceeds from maturities of available-for-sale securities     18,185,350     23,616,275     34,532,091
   Proceeds from sales of available-for-sale securities             996,446        985,299        514,236
   Purchases of held-to-maturity securities                      (1,880,773)            --     (4,946,591)
   Proceeds from maturities of held-to-maturity securities          543,941      1,356,578        171,490
   Net change in loans                                          (29,247,099)   (25,700,454)   (12,013,569)
   Proceeds from sales of foreclosed assets                         331,539        799,345        357,094
   Purchase of premises and equipment                            (5,306,086)    (2,699,845)      (670,228)
   Capitalized interest                                            (101,080)       (20,216)            --
   Proceeds from sales of premises and equipment                     31,900             --         10,000
   Proceeds received from exchange of premises and equipment             --        269,096             --
   Redemption of Federal Home Loan Bank stock                     2,859,557             --             --
   Purchase of life insurance                                            --       (125,000)            --
   Net cash paid for the purchase of Rantoul First Bank
      (net of cash received)                                             --     (2,333,440)            --
                                                               ------------   ------------   ------------
         Net cash used in investing activities                  (20,925,062)   (13,177,734)    (7,289,350)
                                                               ------------   ------------   ------------
</TABLE>

See Notes to Consolidated Financial Statements


                                       50

<PAGE>

<TABLE>
<CAPTION>
                                                               2006           2005          2004
                                                           ------------   -----------   -----------
<S>                                                        <C>            <C>           <C>
FINANCING ACTIVITIES
   Net decrease in demand deposits, money market, NOW
      and savings accounts                                 $ (4,994,112)  $(1,184,822)  $(5,777,660)
   Net increase in certificates of deposit                   53,621,926     8,952,043     2,220,835
   Premium paid for acquired deposits                          (348,925)           --            --
   Net increase (decrease) in short-term borrowings          (2,500,000)      500,000     2,000,000
   Proceeds from Federal Home Bank advances                  29,500,000     2,000,000     5,000,000
   Repayment of Federal Home Loan Bank advances             (39,900,000)           --            --
   Proceeds from the issuance of junior subordinated
      debentures                                                     --     6,186,000            --
   Net change in pass through payments received on loans
      sold                                                       47,587        14,501      (201,507)
   Net change in advances from borrowers for taxes and
      insurance                                                 (41,315)       29,778        28,604
   Proceeds from stock options exercised                         98,700        41,454            --
   Purchase of treasury stock                                  (684,334)   (1,639,297)      (69,104)
   Dividends paid                                              (542,548)     (581,970)     (574,768)
                                                           ------------   -----------   -----------
      Net cash provided by financing activities              34,256,979    14,317,687     2,626,400
                                                           ------------   -----------   -----------

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS             16,344,216     3,333,703    (1,180,675)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                 12,447,133     9,113,430    10,294,105
                                                           ------------   -----------   -----------
CASH AND CASH EQUIVALENTS, END OF YEAR                     $ 28,791,349   $12,447,133   $ 9,113,430
                                                           ============   ===========   ===========
SUPPLEMENTAL CASH FLOWS INFORMATION
   Interest paid (net of capitalized interest)             $  7,701,342   $ 5,227,813   $ 4,387,543
   Income taxes paid (net of refunds)                      $    460,000   $   340,000   $    43,149
   Real estate and other property acquired in settlement
      of loans                                             $    458,448   $   257,374   $   462,016
   Tax benefit related to incentive plan and exercise of
      options                                              $     26,881   $    24,401   $    25,129
</TABLE>


                                       51
<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF OPERATIONS

          First BancTrust Corporation (Company) is a financial holding company
          whose principal activity is the ownership and management of its
          wholly-owned subsidiaries, First Bank & Trust, S.B. (Bank), ECS
          Service Corporation, and First Charter Service Corporation. FBTC
          Statutory Trust I (Trust) is an unconsolidated wholly owned subsidiary
          of the Company. The Trust was formed during 2005 to issue cumulative
          preferred securities. The Company owns all of the securities of the
          Trust that possess general voting powers. The Bank is primarily
          engaged in providing a full range of banking and financial services to
          individual and corporate customers in East Central Illinois. The
          Company also provides title services through its subsidiary, ECS
          Service Corporation. During May 2005, the Bank dissolved its
          subsidiary, Community Finance Center and became a division of the
          Bank. Community Finance Center provided retail consumer loans to the
          Company's customers. The Company also has an inactive subsidiary,
          First Charter Service Corporation, which formerly provided brokerage
          services prior to 2005. The Company and Bank are subject to
          competition from other financial institutions. The Company and Bank
          are subject to the regulation of certain federal and state agencies
          and undergo periodic examinations by those regulatory authorities.

     PRINCIPLES OF CONSOLIDATION

          The consolidated financial statements include the accounts of the
          Company, Bank, ECS Service Corporation, and First Charter Service
          Corporation. All significant intercompany accounts and transactions
          have been eliminated in consolidation.

     USE OF ESTIMATES

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting period.
          Actual results could differ from those estimates.

          Material estimates that are particularly susceptible to significant
          change relate to the determination of the allowance for loan losses,
          the valuation of real estate acquired in connection with foreclosures
          or in satisfaction of loans and loan servicing rights. In connection
          with the determination of the allowance for loan losses and the
          valuation of foreclosed assets held for sale, management obtains
          independent appraisals for significant properties. Management
          estimates loan servicing rights taking into consideration changes in
          interest rates, current prepayment rates and expected future cash
          flows and obtains an independent valuation for the asset.


                                       52

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     CASH EQUIVALENTS

          The Company considers all liquid investments with original maturities
          of three months or less to be cash equivalents.

     SECURITIES

          Available-for-sale securities, which include any security for which
          the Company has no immediate plan to sell but which may be sold in the
          future, are carried at fair value. Unrealized gains and losses are
          recorded, net of related income tax effects, in other comprehensive
          income.

          Held-to-maturity securities, which include any security for which the
          Company has the positive intent and ability to hold until maturity,
          are carried at historical cost adjusted for amortization of premiums
          and accretion of discounts.

          A decline in the market value of any available-for-sale or
          held-to-maturity security below cost is deemed to be
          other-than-temporary results in a reduction in carrying amount to fair
          value. The impairment is charged to earnings and a new cost basis for
          the security is established. To determine whether impairment is
          other-than-temporary, management considers whether it has the ability
          and intent to hold the investment until a market price recovery and
          considers whether evidence indicating the cost of the investment is
          recoverable outweighs evidence to the contrary. Evidence considered in
          this assessment includes the reasons for the impairment, the security
          and duration of the impairment changes in value subsequent to year-end
          and forecasted performance of the investee.

          Amortization of premiums and accretion of discounts are recorded as
          interest income from securities. Realized gains and losses are
          recorded as net security gains (losses). Gains and losses on sales of
          securities are determined on the specific identification method.

     LOANS HELD FOR SALE

          The Company currently sells one-to-four family residential loans
          primarily to the Federal Home Loan Mortgage Corporation and Illinois
          Housing Development Authority.

          Loans originated and intended for sale in the secondary market are
          carried at the lower of cost or fair value in the aggregate. Net
          unrealized losses, if any, are recognized through a valuation
          allowance by charges to income.


                                       53

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     LOANS

          Loans that management has the intent and ability to hold for the
          foreseeable future or until maturity or payoffs are reported at their
          outstanding principal balances adjusted for any charge-offs, the
          allowance for loan losses, any deferred fees or costs on originated
          loans and unamortized premiums or discounts on purchased loans.
          Interest income is reported on the interest method and includes
          amortization of the net deferred loan fees and costs over the loan
          term. Generally, loans are placed on non-accrual status at ninety days
          past due and interest is considered a loss, unless the loan is
          well-secured and in the process of collection.

          Discounts and premiums on purchased residential real estate loans are
          amortized to income using the interest method over the remaining
          period to contractual maturity, adjusted for anticipated prepayments.
          Discounted and premiums on purchased consumer loans are recognized
          over the expected lives of the loans using methods that approximate
          the interest method.

     ALLOWANCE FOR LOAN LOSSES

          The allowance for loan losses is established as losses are estimated
          to have occurred through a provision for loan losses charged to
          income. Loan losses are charged against the allowance when management
          believes the uncollectibility of a loan balance is confirmed.
          Subsequent recoveries, if any, are credited to the allowance.

          The allowance for loan losses is evaluated on a regular basis by
          management and is based upon management's periodic review of the
          collectibility of the loans in light of historical experience, the
          nature and volume of the loan portfolio, adverse situations that may
          affect the borrower's ability to repay, estimated value of any
          underlying collateral and prevailing economic conditions. This
          evaluation is inherently subjective as it requires estimates that are
          susceptible to significant revision as more information becomes
          available.

          A loan is considered impaired when, based on current information and
          events, it is probable that the Company will be unable to collect the
          scheduled payments of principal or interest when due according to the
          contractual terms of the loan agreement. Factors considered by
          management in determining impairment include payment status,
          collateral value and the probability of collecting scheduled principal
          and interest payments when due. Loans that experience insignificant
          payment delays and payment shortfalls generally are not classified as
          impaired. Management determines the significance of payment delays and
          payment shortfalls on a case-by-case basis, taking into consideration
          all of the circumstances surrounding the loan and the borrower,
          including the length of the delay, the reasons for the delay, the
          borrower's prior payment record and the amount of the shortfall in
          relation to the principal and interest owed. Impairment is measured on
          a loan-by-loan basis for commercial and construction loans by either
          the present value of expected future cash flows discounted at the
          loan's effective interest rate, the loan's obtainable market price or
          the fair value of the collateral if the loan is collateral dependent.


                                       54

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

          Large groups of smaller balance homogenous loans are collectively
          evaluated for impairment. Accordingly, the Company does not separately
          identify individual consumer and residential loans for impairment
          disclosures.

     PREMISES AND EQUIPMENT

          Depreciable assets are stated at cost less accumulated depreciation.
          Depreciation is charged to expense using the straight-line method over
          the estimated useful lives of the assets. Leasehold improvements are
          capitalized and depreciated using the straight-line method over the
          terms of the respective leases or the estimated useful lives of the
          improvements, whichever is shorter.

          The Company capitalized interest during the construction period of its
          new bank facility. Interest capitalization ceased when the facility
          was completed and available for occupancy.

          During the years ended December 31, 2006 and 2005, gross interest
          expense on borrowings totaled $2,123,007 and $1,846,251, of which
          $101,080 and $20,216 was capitalized, respectively.

     FEDERAL HOME LOAN BANK STOCK

          Federal Home Loan Bank stock is a required investment for institutions
          that are members of the Federal Home Loan Bank system. The required
          investment in the common stock is based on a predetermined formula.

          In April, 2006, the Federal Home Loan Bank announced a plan to resume
          capital stock redemptions. Capital stock redemptions during 2006
          totaled $2,859,557. The Company had approximately $2,108,900 of
          voluntary Federal Home Loan Bank stock as of December 31, 2006.

     FORECLOSED ASSETS HELD FOR SALE

          Assets acquired through, or in lieu of, loan foreclosure are held for
          sale and are initially recorded at fair value at the date of
          foreclosure, establishing a new cost basis. Subsequent to foreclosure,
          valuations are periodically performed by management and the assets are
          carried at the lower of carrying amount or fair value less cost to
          sell. Revenue and expenses from operations and changes in the
          valuation allowance are included in net expenses from foreclosed
          assets.

     GOODWILL

          Goodwill is tested annually for impairment. If the implied fair value
          of goodwill is lower than its carrying amount, a goodwill impairment
          is indicated, and goodwill is written down to its implied fair value.
          Subsequent increases in goodwill are not recognized in the financial
          statements.


                                       55

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     CORE DEPOSIT INTANGIBLES

          Core deposit intangibles are being amortized on the straight-line and
          accelerated basis over periods ranging from five to ten years. Such
          assets are periodically evaluated to the recoverability of their
          carrying value.

     LOAN SERVICING RIGHTS

          Loan servicing rights on originated loans that have been sold are
          capitalized by allocating the total cost of the loans between the loan
          servicing rights and the loans based on their relative fair values.
          Capitalized servicing rights are amortized in proportion to and over
          the period of estimated servicing revenues. Impairment of loan
          servicing rights is assessed based on the fair value of those rights.
          Fair values are estimated using either an independent valuation or by
          discounted cash flows based on a current market interest rate. For
          purposes of measuring impairment, the rights are stratified based on
          the predominant risk characteristics of the underlying loans. The
          predominant characteristic currently used for stratification is type
          of loan. The amount of impairment recognized is the amount by which
          the capitalized loan servicing rights for a stratum exceed their fair
          value.

     INCENTIVE PLAN

          During 2005 and 2004, the Company accounted for its stock award
          program or incentive plan in accordance with Accounting Principals
          Board Opinion (APB) No. 25, Accounting for Stock Issued to Employees.
          The aggregate purchase price of all shares owned by the incentive plan
          was reflected as a reduction of stockholders' equity. As of January 1,
          2006, the Company adopted the fair value recognition provisions of
          SFAS No. 123R, Share-Based Payment, using the modified prospective
          application method. As a result of implementing the modified
          prospective application method, the Company reclassified 589,000 and
          71,422 shares from a contra equity account to additional paid-in
          capital.

          Compensation expense is based on the market price of the Company's
          stock on the date the shares are granted and is recorded over the
          vesting period. The difference between the aggregate purchase price
          and the fair value on the date granted of the shares earned is
          recorded as an adjustment to additional paid-in capital.


                                       56

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     EMPLOYEE STOCK OWNERSHIP PLAN

          The Company accounts for its employee stock ownership plan (ESOP) in
          accordance with American Institute of Certified Public Accountants
          (AICPA) Statement of Position 93-6. The cost of shares issued to the
          ESOP but not yet allocated to participants are presented in the
          consolidated balance sheet as a reduction of stockholders' equity.
          Compensation expense is recorded based on the market price of the
          shares as they are committed to be released for allocation to
          participant accounts. The difference between the market price and the
          cost of shares committed to be released is recorded as an adjustment
          to additional paid-in capital. Dividends on allocated ESOP shares are
          recorded as a reduction of retained earnings; dividends on unallocated
          ESOP shares are reflected as a reduction of debt.

          Shares are considered outstanding for earnings per share calculations
          when they are committed to be released; unallocated shares are not
          considered outstanding.

     TREASURY STOCK

          Treasury stock is stated at cost. Cost is determined by the average
          cost method.

     STOCK OPTIONS

          The Company has a stock-based employee compensation plan, which is
          described more fully in Note 20. During 2005 and 2004, the Company
          accounted for this plan under the recognition and measurement
          principles of APB Opinion No. 25, Accounting for Stock Issued to
          Employees, and related Interpretations. No stock-based employee
          compensation cost is reflected in net income for 2005 and 2004, as all
          options granted under this plan had an exercise price equal to the
          market value of the underlying common stock on the grant date. During
          2006, the Company adopted FASB Statement No. 123R, Share-Based
          Payment. The following table illustrates the effect of net income and
          earnings per share if the Company had applied the fair value
          provisions of FASB Statement No. 123R during 2005 and 2004.


                                       57

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                                YEARS ENDED
                                                          -----------------------
                                                             2005         2004
                                                          ----------   ----------
<S>                                                       <C>          <C>
Net income, as reported                                   $1,247,695   $1,227,733
Less: Total stock-based employee compensation cost
   determined under the fair value based method, net of
   income taxes                                              282,723      139,241
                                                          ----------   ----------
Pro forma net income                                      $  964,972   $1,088,492
                                                          ==========   ==========
Earnings per share:
   Basic - as reported                                    $      .56   $      .54
                                                          ==========   ==========
   Basic - pro forma                                      $      .43   $      .48
                                                          ==========   ==========
   Diluted - as reported                                  $      .52   $      .51
                                                          ==========   ==========
   Diluted - pro forma                                    $      .41   $      .45
                                                          ==========   ==========
</TABLE>

          During December 2005, the Company accelerated the vesting of 182,504
          options on shares of the Company's stock. By accelerating the vesting
          of these options, the Company estimated approximately $411,000 of
          future compensation was eliminated. The exercise price and remaining
          terms of each of the accelerated options remained the same. As of
          December 31, 2006 and 2005, all of the Company's stock options are
          vested. In accordance with Statement No. 123R and related
          interpretations, no compensation expense was recognized.

     INCOME TAXES

          Deferred tax assets and liabilities are recognized for the tax effects
          of differences between the financial statement and tax bases of assets
          and liabilities. A valuation allowance is established to reduce
          deferred tax assets if it is more likely than not that a deferred tax
          asset will not be realized. The Company files consolidated income tax
          returns with its consolidated subsidiaries.

     EARNINGS PER SHARE

          Earnings per share have been computed based upon the weighted average
          common shares outstanding during each year. Unearned ESOP shares and
          unearned incentive plan shares which have not vested have been
          excluded from the computation of average shares outstanding.

          Diluted earnings per share reflect the potential dilation that could
          occur if securities or other contracts to issue common stock were
          exercised or converted into common stock or resulted in the issuance
          of common stock that then shared in the earnings of the Company.


                                       58

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     RECLASSIFICATIONS

     Certain reclassifications have been made to the 2004 and 2005 financial
     statements to conform to the 2006 financial statement presentation. These
     classifications had no effect on net income.

NOTE 2: ADOPTION OF STAFF ACCOUNTING BULLETIN NO. 108

     During 2006, the Company adopted Staff Accounting Bulletin No. 108 and
     recognized a $58,000 reduction in current taxes payable and an increase of
     $58,000 in the opening balance of retained earnings as of January 1, 2006.
     The error occurred during 2003 and 2004 and related to a specific tax
     credit received on qualified zone academy bonds. The Company was unaware of
     the tax credit effects when calculating the income tax provision. The
     Company determined the error to be immaterial in prior years.

NOTE 3: RESTRICTION ON CASH AND DUE FROM BANKS

     The Company is required to maintain reserve funds in cash and/or on deposit
     with the Federal Reserve Bank. The reserve required at December 31, 2006
     was $38,000.

NOTE 4: SECURITIES

     The amortized cost and approximate fair values of securities are as
     follows:

<TABLE>
<CAPTION>
                                                    GROSS        GROSS
                                    AMORTIZED    UNREALIZED   UNREALIZED    APPROXIMATE
                                       COST         GAINS       LOSSES       FAIR VALUE
                                   -----------   ----------   -----------   -----------
<S>                                <C>           <C>          <C>           <C>
AVAILABLE-FOR-SALE SECURITIES:
   December 31, 2006:
      U.S. Treasuries              $ 3,869,313    $     --    $  (413,049)  $ 3,456,264
      U.S. government agencies       6,966,473      77,022        (29,748)    7,013,747
      Mortgage-backed securities    40,767,304      99,665       (909,794)   39,957,175
      State and political
         subdivisions               12,351,297     150,189        (96,426)   12,405,060
      Equity securities              1,685,013       5,304         (7,270)    1,683,047
                                   -----------    --------    -----------   -----------
                                   $65,639,400    $332,180    $(1,456,287)  $64,515,293
                                   ===========    ========    ===========   ===========
</TABLE>


                                       59

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

<TABLE>
<CAPTION>
                                                    GROSS        GROSS
                                    AMORTIZED    UNREALIZED    UNREALIZED   APPROXIMATE
                                       COST         GAINS        LOSSES      FAIR VALUE
                                   -----------   ----------   -----------   -----------
<S>                                <C>           <C>          <C>           <C>
   December 31, 2005:
      U.S. Treasuries              $ 3,820,540    $     --    $  (293,333)  $ 3,527,207
      U.S. government agencies       8,483,179          --       (108,200)    8,374,979
      Mortgage-backed securities    51,137,631     129,274       (898,319)   50,368,586
      State and political
         subdivisions               13,181,161     209,093       (137,728)   13,252,526
      Equity securities                902,912       3,690         (5,725)      900,877
                                   -----------    --------    -----------   -----------
                                   $77,525,423    $342,057    $(1,443,305)  $76,424,175
                                   ===========    ========    ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                                                   GROSS        GROSS
                                    AMORTIZED   UNREALIZED   UNREALIZED   APPROXIMATE
                                       COST        GAINS       LOSSES      FAIR VALUE
                                   ----------   ----------   ----------   -----------
<S>                                <C>          <C>          <C>          <C>
HELD-TO-MATURITY SECURITIES:
   December 31, 2006:
      Mortgage-backed securities   $4,779,948       $--       $(118,298)   $4,661,650
                                   ==========       ===       =========    ==========
   December 31, 2005:
      Mortgage-backed securities   $3,437,417       $--       $ (53,870)   $3,383,547
                                   ==========       ===       =========    ==========
</TABLE>


                                       60
<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     The amortized cost and fair value of available-for-sale and
     held-to-maturity securities at December 31, 2006, by contractual maturity,
     are shown below. Expected maturities will differ from contractual
     maturities because issuers may have the right to call or prepay obligations
     with or without call or prepayment penalties.

<TABLE>
<CAPTION>
                                 AVAILABLE-FOR-SALE          HELD-TO-MATURITY
                             -------------------------   ------------------------
                              AMORTIZED    APPROXIMATE    AMORTIZED   APPROXIMATE
                                 COST       FAIR VALUE      COST       FAIR VALUE
                             -----------   -----------   ----------   -----------
<S>                          <C>           <C>           <C>          <C>
Within one year              $   573,471   $   569,995   $       --    $       --
One to five years             11,309,033    10,933,398           --            --
Five to ten years              8,451,068     8,498,678           --            --
After ten years                2,853,511     2,873,000           --            --
                             -----------   -----------   ----------    ----------
                              23,187,083    22,875,071           --            --
Mortgage-backed securities    40,767,304    39,957,175    4,779,948     4,661,650
Equity securities              1,685,013     1,683,047                         --
                             -----------   -----------   ----------    ----------
   Totals                    $65,639,400   $64,515,293   $4,779,948    $4,661,650
                             ===========   ===========   ==========    ==========
</TABLE>

     The carrying value of securities pledged as collateral, to secure public
     deposits, Federal Home Loan Bank advances and for other purposes, was
     $49,900,165 at December 31, 2006 and $57,254,229 at December 31, 2005.

     Gross gains of $12,106, $117,959 and $97,036 resulting from sales of
     available-for-sale securities were realized for 2006, 2005 and 2004. Income
     tax expense of $4,697, $45,768 and $40,077 was recognized on the sales of
     available-for-sale securities during 2006, 2005 and 2004.

     With the exception of securities of U.S. government agencies and
     corporations, the Company did not hold any securities of a single issuer,
     payable from and secured by the same source of revenue or taxing authority,
     the book value of which exceeded 10% of stockholder's equity at December
     31, 2006.

     Certain investments in debt and marketable equity securities are reported
     in the financial statements at an amount less than their historical cost.
     Total fair value of these investments at December 31, 2006, and was
     $45,614,849 and $60,837,601, which is approximately 66% and 76% of the
     Company's investment portfolio. These declines primarily resulted from
     recent increases in market interest rates.

     Based on evaluation of available evidence, including recent changes in
     market interest rates, management believes the declines in fair value for
     these securities are temporary.

     Should the impairment of any of these securities become other than
     temporary, the cost basis of the investment will be reduced and the
     resulting loss recognized in net income in the period the
     other-than-temporary impairment is identified.


                                       61

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     The following table shows our investments' gross unrealized losses and fair
     value, aggregated by investment category and length of time that individual
     securities have been in a continuous unrealized loss position at December
     31, 2006 and 2005:

<TABLE>
<CAPTION>
                         LESS THAN 12 MONTHS         12 MONTHS OR MORE                 TOTAL
                       -----------------------   -------------------------   -------------------------
   DESCRIPTION OF                   UNREALIZED                  UNREALIZED                  UNREALIZED
     SECURITIES        FAIR VALUE     LOSSES      FAIR VALUE      LOSSES      FAIR VALUE      LOSSES
--------------------   ----------   ----------   -----------   -----------   -----------   -----------
<S>                    <C>          <C>          <C>           <C>           <C>           <C>
December 31, 2006:
   U.S. treasury       $       --    $     --    $ 3,456,264   $  (413,049)  $ 3,456,264   $  (413,049)
   U.S. government
      agencies                 --          --      2,467,511       (29,748)    2,467,511       (29,748)
   Mortgage-backed
      securities        2,848,852     (31,943)    31,441,688      (996,149)   34,290,540    (1,028,092)
   State and
      political
      subdivisions      1,555,034     (18,653)     3,836,070       (77,773)    5,391,104       (96,426)
   Equity securities           --          --          9,430        (7,270)        9,430        (7,270)
                       ----------    --------    -----------   -----------   -----------   -----------
      Total
         temporarily
         impaired
         securities    $4,403,886    $(50,596)   $41,210,963   $(1,523,989)  $45,614,849   $(1,574,585)
                       ==========    ========    ===========   ===========   ===========   ===========
</TABLE>

<TABLE>
<CAPTION>
                          LESS THAN 12 MONTHS         12 MONTHS OR MORE                 TOTAL
                       ------------------------   ------------------------   -------------------------
   DESCRIPTION OF                    UNREALIZED                 UNREALIZED                  UNREALIZED
     SECURITIES         FAIR VALUE     LOSSES      FAIR VALUE     LOSSES      FAIR VALUE      LOSSES
--------------------   -----------   ----------   -----------   ----------   -----------   -----------
<S>                    <C>           <C>          <C>           <C>          <C>           <C>
December 31, 2005:
   U.S. treasury       $ 3,527,207   $(293,333)   $        --   $      --    $ 3,527,207   $  (293,333)
   U.S. government
      agencies           1,975,943      (7,235)     6,399,036    (100,965)     8,374,979      (108,200)
   Mortgage-backed
      securities        21,600,636    (255,892)    21,567,707    (696,297)    43,168,343      (952,189)
   State and
      political
        subdivisions     2,908,691     (47,882)     2,847,406     (89,846)     5,756,097      (137,728)
   Equity securities            --          --         10,975      (5,725)        10,975        (5,725)
                       -----------   ---------    -----------   ---------    -----------   -----------
      Total
         temporarily
         impaired
         securities    $30,012,477   $(604,342)   $30,825,124   $(892,833)   $60,837,601   $(1,497,175)
                       ===========   =========    ===========   =========    ===========   ===========
</TABLE>


                                       62

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 5: LOANS AND ALLOWANCE FOR LOAN LOSSES

     Categories of loans at December 31, include:

<TABLE>
<CAPTION>
                                              2006            2005
                                          ------------   -------------
<S>                                       <C>            <C>
Commercial and industrial                 $  7,359,758   $  7,885,998
Agricultural production financing           18,897,117     15,441,718
Real estate construction                     2,422,756      2,422,736
Commercial and agricultural real estate     60,733,680     54,157,375
Residential real estate                     70,082,306     52,517,947
Consumer                                    27,539,835     26,416,129
Other                                        1,599,529      1,676,935
                                          ------------   ------------
      Total loans                          188,634,981    160,518,838
Less
   Unearned discount and fees                 (882,007)      (807,119)
   Undisbursed loans in process                (87,058)      (164,359)
   Allowance for loan losses                (2,222,355)    (2,662,450)
                                          ------------   ------------
      Net loans                           $185,443,561   $156,884,910
                                          ============   ============
</TABLE>

     Activity in the allowance for loan losses was as follows:

<TABLE>
<CAPTION>
                                                     2006         2005         2004
                                                  ----------   ----------   ----------
<S>                                               <C>          <C>          <C>
Balance, beginning of year                        $2,662,450   $2,300,452   $2,124,297
Provision charged to expense                         230,000      510,145      515,001
Losses charged off, net of recoveries of
   $102,794 for 2006, $90,198 for 2005 and
   $97,905 for 2004                                 (670,095)    (348,348)    (338,846)
Allowance acquired through business combination           --      200,201           --
                                                  ----------   ----------   ----------
Balance, end of year                              $2,222,355   $2,662,450   $2,300,452
                                                  ==========   ==========   ==========
</TABLE>

     Impaired loans totaled $6,170,616 and $7,893,352 at December 31, 2006 and
     2005, respectively. An allowance for loan losses of $1,060,373 and
     $1,234,450 relates to impaired loans of $2,789,617 and $2,242,165, at
     December 31, 2006 and 2005, respectively. At December 31, 2006 and 2005,
     impaired loans of $3,380,999 and $5,651,187 had no related allowance for
     loan losses.


                                       63

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     Interest of $390,838, $504,291 and $575,483 was recognized on average
     impaired loans of $5,960,972, $7,442,377 and $8,159,341 for 2006, 2005 and
     2004. Interest of $416,642, $457,973 and $563,544 was recognized on
     impaired loans on a cash basis during 2006, 2005 and 2004.

     At December 31, 2006 and 2005, accruing loans delinquent 90 days or more
     totaled $654,581 and $1,406,488, respectively. Non-accruing loans at
     December 31, 2006 and 2005 were $650,826 and $12,848, respectively.

NOTE 6: PREMISES AND EQUIPMENT

     Major classifications of premises and equipment, stated at cost, are as
     follows:

<TABLE>
<CAPTION>
                                    2006          2005
                                -----------   -----------
<S>                             <C>           <C>
Land                            $ 1,098,339   $   932,205
Buildings and improvements        9,028,432     3,030,686
Leasehold improvements              445,016       445,016
Equipment                         3,646,238     4,628,431
Construction in progress                 --     1,937,167
                                -----------   -----------
                                 14,218,025    10,973,505
Less accumulated depreciation    (3,201,493)   (4,587,431)
                                -----------   -----------
   Net premises and equipment   $11,016,532   $ 6,386,074
                                ===========   ===========
</TABLE>

NOTE 7: GOODWILL

     Goodwill of $541,474 was acquired in the year ended December 31, 2005. See
     Note 23.

     All goodwill is allocated to the banking segment of the business. The fair
     value of the banking segment of the business was estimated using the
     expected value of future cash flows.


                                       64
<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 8: CORE DEPOSIT INTANGIBLES

     The carrying basis and accumulated amortization of core deposit intangibles
     of December 31, 2006 and 2005 were:

<TABLE>
<CAPTION>
                                     2006                      2005
                           -----------------------   -----------------------
                             GROSS                     GROSS
                           CARRYING    ACCUMULATED   CARRYING    ACCUMULATED
                            AMOUNT    AMORTIZATION    AMOUNT    AMORTIZATION
                           --------   ------------   --------   ------------
<S>                        <C>          <C>          <C>        <C>
Core deposit intangibles   $889,617     $125,663     $540,692      $56,940
</TABLE>

     During 2006, the Company assumed approximately $13,000,000 in deposits from
     a branch purchase in Rantoul. The Company recognized a core deposit
     intangible of $348,925 related to these deposits. No other assets or
     liabilities were acquired or assumed related to this transaction.

     Amortization expense for the years ended December 31, 2006, 2005 and 2004
     was $68,723, $42,120 and $11,856, respectively. Estimated amortization
     expense for each of the following five years is:

<TABLE>
<S>    <C>
2007   $96,989
2008    93,348
2009    89,784
2010    86,741
2011    85,111
</TABLE>

NOTE 9: LOAN SERVICING

     Loans serviced for others are not included in the accompanying consolidated
     balance sheets. The unpaid principal balances of serviced loans consist of
     the following:

<TABLE>
<CAPTION>
                                           2006          2005
                                       -----------   -----------
<S>                                    <C>           <C>
One-to-four family residential loans
   FHLMC                               $69,799,034   $72,383,496
   IHDA                                 11,286,790    10,226,052
                                       -----------   -----------
                                        81,085,824    82,609,548
Agricultural loans
   Farmer Mac                              265,758       280,350
   Other investors                       7,141,476     9,157,874
                                       -----------   -----------
                                       $88,493,058   $92,047,772
                                       ===========   ===========
</TABLE>


                                       65

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     Custodial escrow balances maintained in connection with the foregoing loan
     servicing, and included in demand deposits, were $245,951, $243,566 and
     $207,507 at December 31, 2006, 2005 and 2004, respectively.

     The aggregate fair value of capitalized loan servicing rights at December
     31, 2006, 2005 and 2004 totaled $1,183,703, $1,342,246 and $1,107,401,
     respectively. Comparable market values and a valuation model that
     calculates the present value of future cash flows were used to estimate
     fair value. For purposes of measuring impairment, risk characteristics
     including product type, and interest rate, were used to stratify the
     originated loan servicing rights. The carrying value of capitalized loan
     servicing rights are as follows:

<TABLE>
<CAPTION>
                                         2006        2005        2004
                                      ---------   ---------   ----------
<S>                                   <C>         <C>         <C>
Loan Servicing Rights
   Balance, beginning of year         $ 462,341   $ 780,828   $1,230,663
   Servicing rights capitalized         131,100     168,305      180,347
   Amortization of servicing rights    (242,327)   (486,792)    (630,182)
                                      ---------   ---------   ----------
                                        351,114     462,341      780,828
   Valuation allowance                       --          --      (24,191)
                                      ---------   ---------   ----------
   Balance, end of year               $ 351,114   $ 462,341   $  756,637
                                      =========   =========   ==========
</TABLE>

     Activity in the valuation allowance for loan servicing rights was as
     follows:

<TABLE>
<CAPTION>
                             2006     2005        2004
                             ----   --------   ---------
<S>                          <C>    <C>        <C>
Balance, beginning of year    $--   $ 24,191   $ 266,639
   Additions                   --      1,739          --
   Reductions                  --    (25,930)   (242,448)
   Direct write-downs          --         --          --
                              ---   --------   ---------
Balance, end of year          $--   $     --   $  24,191
                              ===   ========   =========
</TABLE>


                                       66

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 10: INTEREST-BEARING DEPOSITS

     Interest-bearing deposits in denominations over $100,000 were $77,908,901
     on December 31, 2006 and $51,370,576 on December 31, 2005.

     At December 31, 2005, the scheduled maturities of time deposits are as
     follows:

<TABLE>
<S>          <C>
2007         $127,125,784
2008           12,979,462
2009            7,932,053
2010            8,596,635
2011            2,444,091
Thereafter        648,272
             ------------
             $159,726,297
             ============
</TABLE>

     The Company issued three brokered certificates of deposits totaling
     $27,800,000 during 2006 of which $22,800,000 mature during 2007 and
     $4,900,000 mature during 2010.

NOTE 11: FEDERAL HOME LOAN BANK ADVANCES AND OTHER DEBT

<TABLE>
<CAPTION>
                                                                   2006          2005
                                                               -----------   -----------
<S>                                                            <C>           <C>
Federal Home Loan Bank open line of credit, variable rate,
   5.50% at December 31, 2006                                  $        --   $ 7,000,000
Federal Home Loan Bank advances, fixed rates ranging from
   3.12% to 5.32% at December 31, 2006, due at various dates
   through September 2016                                       32,800,000    36,200,000
                                                               -----------   -----------
                                                               $32,800,000   $43,200,000
                                                               ===========   ===========
</TABLE>

     The Federal Home Loan Bank advances are secured by first-mortgage loans,
     certain mortgage and other investment securities, and all Federal Home Loan
     Bank stock owned by the Company. Advances are subject to restrictions or
     penalties in the event of prepayment. Convertible advances of $14,000,000
     have a specific lock-out period of one year, after which the Federal Loan
     Bank has the option to convert the advance to a quarterly adjustable rate
     loan, with the option of prepayment at the conversion date, or on any
     future date of rate adjustment. Convertible advances of $11,500,000 are
     past the initial lock-out period, and are subject to possible conversion to
     an adjustable rate advance on a quarterly basis.


                                       67

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     Aggregate annual maturities of Federal Home Loan Bank advances at December
     31, 2006, are:

<TABLE>
<S>          <C>
2007         $        --
2008           3,800,000
2011          15,000,000
After 2011    14,000,000
             -----------
             $32,800,000
             ===========
</TABLE>

NOTE 12: JUNIOR SUBORDINATED DEBENTURES

     On June 15, 2005, the Company completed the issuance and sale of $6.0
     million of trust preferred securities through FBTC Statutory Trust I (the
     "Trust"), a statutory business trust and wholly-owned subsidiary of the
     Company, as part of a pooled offering. The Company established the Trust
     for the purpose of issuing the trust preferred securities and investing the
     proceeds from the sale of such trust preferred securities in the
     debentures. The $6.0 million in proceeds from the trust preferred issuance
     and an additional $186,000 for the Company's investment in the common
     equity of the Trust, a total of $6,186,000 was invested in the junior
     subordinated debentures of the Company. The debentures issued by the
     Company to the Trust are first redeemable, in whole or part, by the
     Company, on June 15, 2010, and mature on June 15, 2035. Interest is fixed
     at 5.80% for a period of five years, then converts to a floating rate.
     Interest payments are made quarterly beginning in September, 2005.

     As required by FIN 46R, the Company has not consolidated the investment in
     the Trust. The debentures held by the Trust are the sole assets of the
     Trust. Distributions of the trust preferred securities are payable at a
     rate of interest which is equal to the interest rate being earned by the
     Trust on the debentures, and are recorded as interest expense by the
     Company. The trust preferred securities are subject to mandatory
     redemption, in whole or in part, upon repayment of the debentures. The
     trust preferred securities issued by the trust are included as Tier I
     capital of the Company for regulatory capital purposes.


                                       68

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 13: INCOME TAXES

     The provision for income taxes includes these components:

<TABLE>
<CAPTION>
                              2006        2005       2004
                           ---------   ---------   --------
<S>                        <C>         <C>         <C>
Taxes currently payable
   Federal                 $ 338,348   $ 502,705   $366,860
   State                          --          --     66,950
Deferred income taxes
   Federal                  (153,151)   (291,959)    88,432
   State                      53,665     102,526     16,881
                           ---------   ---------   --------
      Income tax expense   $ 238,862   $ 313,272   $539,123
                           =========   =========   ========
</TABLE>

     A reconciliation of income tax expense at the statutory rate to the
     Company's actual income tax expense is shown below:

<TABLE>
<CAPTION>
                                                 2006        2005        2004
                                              ---------   ---------   ---------
<S>                                           <C>         <C>         <C>
Computed at the statutory rate (34%)          $ 460,595   $ 530,729   $ 600,731
Increase (decrease) resulting from
   Tax exempt interest                         (165,132)   (198,900)   (135,071)
   State income taxes                            35,419      67,667      55,329
   Increase in cash surrender value of life
      insurance                                 (61,761)    (58,513)    (59,313)
   Other                                        (30,259)    (27,711)     77,447
                                              ---------   ---------   ---------
      Actual tax expense                      $ 238,862   $ 313,272   $ 539,123
                                              =========   =========   =========
</TABLE>


                                       69
<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     The tax effects of temporary differences related to deferred taxes shown on
     the balance sheets were:

<TABLE>
<CAPTION>
                                                            2006          2005
                                                        -----------   -----------
<S>                                                     <C>           <C>
Deferred tax assets
   Allowance for loan losses                            $   862,879   $ 1,033,361
   Reserve for uncollected interest                          23,668        12,984
   Deferred compensation                                    167,422       135,178
   Unrealized losses on available-for-sale securities       436,152       427,283
   Net operating losses                                     858,166       946,366
   Other                                                    175,132        48,735
                                                        -----------   -----------
                                                          2,523,419     2,603,907
                                                        -----------   -----------
Deferred tax liabilities
   Depreciation                                            (301,836)      (58,706)
   Federal Home Loan Bank stock dividends                  (349,503)     (616,098)
   Capitalized loan servicing rights                       (134,354)     (174,326)
   Purchase accounting difference                          (199,604)     (337,314)
   Other                                                    (48,256)      (35,952)
                                                        -----------   -----------
                                                         (1,033,553)   (1,222,396)
                                                        -----------   -----------
      Net deferred tax asset                            $ 1,489,866   $ 1,381,511
                                                        ===========   ===========
</TABLE>

     The Company received net operating losses from the acquisition of Rantoul
     First Bank, SB. The remaining federal and state net operating losses
     totaling $2,451,017 and $340,000, respectively, can be utilized by the
     Company and expire in 2020.

     Retained earnings at December 31, 2006 and 2005, include approximately
     $2,573,000 for which no deferred federal income tax liability has been
     recognized. This amount represents an allocation of income to bad debt
     deductions for tax purposes only. Reduction of amounts so allocated for
     purposes other than tax bad debt losses or adjustments arising from
     carryback of net operating losses would create income for tax purposes
     only, which would be subject to the then-current corporate income tax rate.
     The deferred income tax liabilities on the preceding amounts that would
     have been recorded if they were expected to reverse into taxable income in
     the foreseeable future were approximately $998,324 at December 31, 2006 and
     2005.


                                       70

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 14: OTHER COMPREHENSIVE INCOME (LOSS)

     Other comprehensive income (loss) components and related taxes were as
     follows:

<TABLE>
<CAPTION>
                                                  2006         2005        2004
                                                --------   -----------   --------
<S>                                             <C>        <C>           <C>
Unrealized gains (loss) on available-for-sale
   securities                                   $(10,754)  $(1,664,047)  $198,109
Less reclassification adjustment for realized
   gains included in income                       12,106       117,959     97,036
                                                --------   -----------   --------
      Other comprehensive income (loss),
         before tax effect                       (22,960)   (1,782,006)   101,073
Tax expense (benefit)                             (8,869)     (701,356)    41,439
                                                --------   -----------   --------
      Other comprehensive income (loss)         $(13,991)  $(1,080,650)  $ 59,634
                                                ========   ===========   ========
</TABLE>

NOTE 15: STOCKHOLDERS' EQUITY

     On April 19, 2004, the Board of Directors of the Company approved a two for
     one stock split of the Company's common stock payable as a 100% stock
     dividend on May 21, 2004 to shareholders of record on April 30, 2004. Prior
     period financial information has been adjusted to reflect the stock split.

     The Bank is subject to various regulatory capital requirements administered
     by the federal banking agencies. Failure to meet minimum capital
     requirements can initiate certain mandatory and possibly additional
     discretionary actions by regulators that, if undertaken, could have a
     direct material effect on the Company's financial statements. Under capital
     adequacy guidelines and the regulatory framework for prompt corrective
     action, the Bank must meet specific capital guidelines that involve
     quantitative measures of assets, liabilities, and certain off-balance-sheet
     items as calculated under regulatory accounting practices. The capital
     amounts and classification are also subject to qualitative judgments by the
     regulators about components, risk weightings and other factors.

     Quantitative measures established by regulation to ensure capital adequacy
     require the Bank to maintain minimum amounts and ratios (set forth in the
     following table). Management believes, as of December 31, 2006 and 2005,
     that the Bank meets all capital adequacy requirements to which it is
     subject.

     As of December 31, 2006, the most recent notification from the regulatory
     agencies categorized the Bank as well capitalized under the regulatory
     framework for prompt corrective action. To be categorized as well
     capitalized, the Bank must maintain capital ratios as set forth in the
     table. There are no conditions or events since that notification that
     management believes have changed the Bank's category.


                                       71

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     The Bank's actual capital amounts and ratios are also presented in the
     following table.

<TABLE>
<CAPTION>
                                                                         TO BE WELL
                                                                        CAPITALIZED
                                                                        UNDER PROMPT
                                                      FOR CAPITAL        CORRECTIVE
                                                        ADEQUACY           ACTION
                                       ACTUAL           PURPOSES         PROVISIONS
                                  ---------------   ---------------   ---------------
                                   AMOUNT   RATIO    AMOUNT   RATIO    AMOUNT   RATIO
                                  -------   -----   -------   -----   -------   -----
                                                 (DOLLARS IN THOUSANDS)
<S>                               <C>       <C>     <C>       <C>     <C>       <C>
As of December 31, 2006
   Total capital
      (to risk-weighted assets)   $32,492   17.1%   $15,213    8.0%   $19,016   10.0%
   Tier I capital
      (to risk-weighted assets)    30,270   15.9      7,606    4.0     11,410    6.0
   Tier I capital
      (to average assets)          30,270   10.4     11,679    4.0     14,598    5.0

As of December 31, 2005
   Total capital
      (to risk-weighted assets)   $31,754   19.6%   $12,961    8.0%   $16,202   10.0%
   Tier I capital
      (to risk-weighted assets)    29,721   18.3      6,481    4.0      9,721    6.0
   Tier I capital
      (to average assets)          29,721   11.4     10,432    4.0     13,040    5.0
</TABLE>

     The Bank is permitted to pay dividends to the Company in an amount equal to
     its net profits in any fiscal year; however, in the event that capital is
     less than 6% to total assets, the Bank can pay up to 50% of its net profits
     for that year without prior approval of the State of Illinois Department of
     Financial and Professional Regulation. In addition, the Bank is unable to
     pay dividends in an amount which would reduce its capital below the greater
     of (i) the amount required by the FDIC or (ii) the amount required by the
     Bank's liquidation account. The FDIC and the Commissioner also have the
     authority to prohibit the payment of any dividends by the Bank if they
     determine that the distribution would constitute an unsafe or unsound
     practice. At December 31, 2006, the Bank could declare up to approximately
     $103,658 without receiving regulatory approval.


                                       72

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 16: RELATED PARTY TRANSACTIONS

     At December 31, 2006 and 2005, the Company had loans outstanding to
     executive officers, directors, significant stockholders and their
     affiliates (related parties).

     The aggregate amount of loans, as defined, to such related parties were as
     follows:

<TABLE>
<S>                                           <C>
Balance, January 1, 2006                      $ 581,526
   Change in composition of related parties    (212,572)
   New loans, including renewals                397,294
   Payments, etc., including renewals          (107,645)
                                              ---------
Balance, December 31, 2006                    $ 658,603
                                              =========
</TABLE>

     In management's opinion, such loans and other extensions of credit were
     made in the ordinary course of business and were made on substantially the
     same terms (including interest rates and collateral) as those prevailing at
     the time for comparable transactions with other persons. Further, in
     management's opinion, these loans did not involve more than normal risk of
     collectibility or present other unfavorable features.

NOTE 17: EMPLOYEE BENEFIT PLANS

     The Company has a retirement savings 401(k) covering substantially all
     employees. The Company may contribute to the plan at the discretion of the
     Board of Directors. Employer contributions charged to expense for 2006,
     2005 and 2004 were $5,076, $5,289 and $4,109, respectively.

     The Company also maintains a voluntary employee's benefit association
     (VEBA) for the benefit of substantially all of its full-time employees.
     Those benefits available under the VEBA include major medical, life,
     accidental death and dismemberment, and disability insurance. These
     benefits are available to all employees who have attained a minimum age and
     length of service. The VEBA is funded through voluntary contributions from
     employees and contributions of the Company. Employer contributions totaled
     $375,000, $325,000 and $400,000 for the years ended December 31, 2006, 2005
     and 2004. The VEBA has been determined to be a tax-exempt organization with
     its fiscal year ending December 31.

     The Company has a deferred director fee plan covering certain directors
     whereby each director may elect to defer their annual fees. For the years
     ended December 31, 2006, 2005 and 2004, fees deferred and interest expense
     related to the plan totaled $83,860, $74,908 and $69,745, respectively. The
     liability related to these plans was $431,501 and $347,641 as of December
     31, 2006 and 2005.


                                       73

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     The Company also has deferred compensation agreements with certain
     directors and officers of the former Rantoul First Bank, SB. The
     agreements, which include specific service requirements, provide benefits
     to certain retired directors and officers upon attainment of specified
     ages, disability or death. The deferred compensation charged to earnings
     were $3,900 and $16,380 for the year ended December 31, 2006 and 2005. The
     deferred compensation liability related to these agreements was $146,767
     and $161,921 as of December 31, 2006 and 2005.

NOTE 18: EMPLOYEE STOCK OWNERSHIP PLAN

     The Company has an employee stock ownership plan (ESOP) covering
     substantially all employees who work 20 or more hours per week. The ESOP
     borrowed $1,406,297 from the Company and used those funds to acquire
     243,340 shares of the Company's common stock at an average price of $5.78.

     Shares issued to the ESOP are allocated to ESOP participants based on
     principal repayments made by the ESOP on the loan from the Company. The
     loan is secured by shares purchased with the loan proceeds and will be
     repaid by the ESOP with funds from the Bank's discretionary contributions
     to the ESOP and earnings on ESOP assets. Dividends on unallocated ESOP
     shares will be applied to reduce the loan. Principal payments are scheduled
     to occur in even annual amounts over an eight year period. However, in the
     event contributions exceed the minimum debt service requirements,
     additional principal payments will be made.

     Stock totaling 30,408 shares for 2006, 2005 and 2004 with an average fair
     value of $11.87, $12.43 and $12.40 were committed to be released, resulting
     in ESOP compensation expense of $360,977, $378,050 and $376,999 for 2006,
     2005 and 2004, respectively. The ESOP shares as of December 31 were as
     follows:

<TABLE>
<CAPTION>
                                                   2006        2005         2004
                                                 --------   ----------   ----------
<S>                                              <C>        <C>          <C>
Allocated shares                                  174,846      144,438      114,030
Shares released for allocation                         --           --           --
Unreleased shares                                  68,494       98,902      129,310
                                                 --------   ----------   ----------
   Total ESOP shares                              243,340      243,340      243,340
                                                 ========   ==========   ==========
Fair value of unreleased shares at December 31   $808,229   $1,211,550   $1,533,617
                                                 ========   ==========   ==========
</TABLE>

     The Company is obligated at the option of each beneficiary to repurchase
     shares of the ESOP upon the beneficiary's termination or after retirement.
     At December 31, 2006, the fair value of the 174,846 allocated shares held
     by the ESOP is $2,063,183.


                                       74

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 19: INCENTIVE PLAN

     The Company has a stock award program or incentive plan which provides for
     the award and issuance of up to 121,670 shares of the Company stock to
     members of the Board of Directors and management. The incentive plan
     purchased 121,670 shares of the Company stock in the open market in 2002.
     The Company believes that such awards better align the interests of its
     employees and Board of Directors with those of its shareholders.

     At December 31, 2006, 116,470 shares had been awarded. In 2002, the Company
     awarded 68,492 shares under the incentive plan which vests ratably over a
     five-year period, commencing with the date of the award. An additional
     53,178 of performance based shares were awarded in December 2005 to members
     of the Board of Directors and management which will vest based on the
     achievement of year-over-year goals for profitability improvement and
     cumulative profitability over a five-year period beginning in 2006
     established by the Board of Directors. Expense recognized under the
     incentive plan totaled $190,174 for 2006, and $109,632 for 2005 and 2004.
     The recognized tax benefit related thereto was $73,788 for 2006, and
     $42,537 for 2005 and 2004.

     A summary of the status of the Company's nonvested shares as of December
     31, 2006, and changes during the year then ended, is presented below:

<TABLE>
<CAPTION>
                                       2006
                               --------------------
                                          WEIGHTED-
                                           AVERAGE
                                         GRANT-DATE
                                SHARES   FAIR VALUE
                               -------   ----------
<S>                            <C>       <C>
Nonvested, beginning of year    80,574     $10.96
Granted                             --
Vested                         (13,698)      8.00
Forfeited                       (5,200)     12.32
                               -------
Nonvested, end of year          61,676     $11.51
                                ======
</TABLE>

     As of December 31, 2006 and 2005, there was $360,129 and $810,369 of total
     unrecognized compensation cost related to nonvested share-based
     compensation arrangements granted under the Plan. During 2006, management
     reviewed the likelihood of achieving the goals related to the performance
     based shares and determined that it is unlikely that the Company will
     achieve its goals for all years in addition to the cumulative goals.
     Therefore, management adjusted the anticipated compensation expense related
     to the performance based shares.

     The unrecognized cost as of December 31, 2006 is expected to be recognized
     over a weighted-average period of 2.4 years. The total fair value of shares
     vested during the years ended December 31, 2006, 2005 and 2004, was
     $109,584 for each year.


                                       75
<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            DECEMBER 31,2006 AND 2005

NOTE 20: STOCK OPTION PLAN

     The Company has a fixed option plan, which is shareholder approved, under
     which the Company may grant options that vest over five years to selected
     employees for up to 304,174 shares of common stock. The Company believes
     that such awards better align the interests of its employees with those of
     its shareholders. The exercise price of each option is intended to equal
     the fair value of the Company's stock on the date of grant. An option's
     maximum term is ten years. In December 2005, the Company accelerated the
     vesting of 182,504 options on shares of the Company's stock. The exercise
     price and remaining terms of the options remained the same. As of December
     31, 2006 and 2005, all of the stock options are fully vested.

     The fair value of each option award is estimated on the date of grant
     Black-Scholes option pricing model. Expected volatility is based on
     historical volatility of the Company's stock and other factors. The Company
     uses historical data to estimate option exercise and employee termination
     within the valuation model; separate groups of employees that have similar
     historical exercise behavior are considered separately for valuation
     purposes. The expected term of options granted is derived from the output
     of the option valuation model and represents the period of time that
     options granted are expected to be outstanding; the range given below
     results from certain groups of employees exhibiting different behavior. The
     risk-free rate for periods within the contractual life of the option is
     based on the U.S. Treasury yield curve in effect at the time of grant.

     A summary of option activity under the Plan as of December 31, 2006 and
     changes during the year then ended, is presented below:

<TABLE>
<CAPTION>

                                           2006
                       ---------------------------------------------
                                              WEIGHTED-
                                 WEIGHTED-     AVERAGE
                                  AVERAGE     REMAINING    AGGREGATE
                                 EXERCISE    CONTRACTUAL   INTRINSIC
                        SHARES     PRICE        TERM         VALUE
                       -------   ---------   -----------   ---------
<S>                    <C>       <C>         <C>           <C>
Outstanding,
   beginning of year   299,974    $9.87
   Granted                  --       --
   Exercised            10,000     9.87
   Forfeited or
      expired               --       --
                       -------
Outstanding, end of
   year                289,974    $9.87       6.3 years     $559,650
                       =======                =========     ========
Exercisable, end of
   year                289,974    $9.87       6.3 years     $559,650
                       =======                =========     ========
</TABLE>


                                       76

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            DECEMBER 31,2006 AND 2005

     Cash received from option exercise of the stock option plan for the years
     ended December 31, 2006, 2005 and 2004 was $98,700, $41,454 and $0,
     respectively. The actual tax benefit realized for the tax deductions from
     option exercise of the share-based payment arrangements totaled $8,079,
     $4,798 and $0, respectively, for the years ended December 31, 2006, 2005
     and 2004.

NOTE 21: LEASES

     The Company has several noncancellable operating leases, including a
     building lease for the Savoy facility, and leases for other various types
     of equipment, including imaging equipment and other computer and network
     components. The building lease was originated in 2004 for a term of five
     years, with a renewal option for an additional five year term, and requires
     the lessee to pay all executory costs such as real estate taxes,
     maintenance and insurance. The equipment operating leases expire over the
     next five years, and generally contain renewal options for one year to five
     years. Total rental expense for all operating leases was $494,297, $460,792
     and $389,000 for the years ended December 31, 2006, 2005 and 2004,
     respectively.

     Future minimum lease payments under operating leases are:

<TABLE>
<S>                               <C>
2007                              $397,007
2008                               176,988
2009                                96,411
2010                                13,928
2011                                   406
                                  --------
   Total minimum lease payments   $684,740
                                  ========
</TABLE>


                                       77

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            DECEMBER 31,2006 AND 2005

NOTE 22: EARNINGS PER SHARE

     Earnings per share (EPS) were computed as follows:

<TABLE>
<CAPTION>
                                              YEAR ENDED DECEMBER 31, 2006
                                          -----------------------------------
                                                        WEIGHTED-
                                                         AVERAGE    PER SHARE
                                            INCOME       SHARES       AMOUNT
                                          ----------   ----------   ---------
<S>                                       <C>          <C>          <C>
Net income                                $1,115,829    2,207,980
Basic earnings per share
   Income available to common
      stockholders                                                     $.51
                                                                       ====
Effect of dilutive securities
   Stock options                                           39,003
   Unearned incentive plan shares                          66,999
                                                       ----------
Diluted earnings per share
   Income available to common
   stockholders and assumed
   conversions                            $1,115,829    2,313,982      $.48
                                          ==========   ==========      ====
</TABLE>

<TABLE>
<CAPTION>
                                              YEAR ENDED DECEMBER 31, 2005
                                          -----------------------------------
                                                        WEIGHTED-
                                                         AVERAGE    PER SHARE
                                            INCOME       SHARES       AMOUNT
                                          ----------   ----------   ---------
<S>                                       <C>          <C>          <C>
Net income                                $1,247,695    2,237,853
Basic earnings per share
   Income available to common
      stockholders                                                    $0.56
                                                                      =====
Effect of dilutive securities
   Stock options                                           52,146
   Unearned incentive plan shares                          87,132
                                                        ---------
Diluted earnings per share
   Income available to common
   stockholders and assumed conversions   $1,247,695    2,377,131     $0.52
                                          ==========    =========     =====
</TABLE>


                                       78

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            DECEMBER 31,2006 AND 2005

<TABLE>
<CAPTION>
                                              YEAR ENDED DECEMBER 31, 2004
                                          -----------------------------------
                                                        WEIGHTED-
                                                         AVERAGE    PER SHARE
                                            INCOME       SHARES       AMOUNT
                                          ----------   ----------   ---------
<S>                                       <C>          <C>          <C>
Net income                                $1,227,733    2,264,866
Basic earnings per share
   Income available to common
      stockholders                                                     $0.54
                                                                       =====
Effect of dilutive securities
   Stock options                                           51,664
   Unearned incentive plan shares                         102,414
                                                        ---------
Diluted earnings per share
   Income available to common
      stockholders and assumed
      conversions                         $1,227,733    2,418,944      $0.51
                                          ==========    =========      =====
</TABLE>


                                       79

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            DECEMBER 31,2006 AND 2005

NOTE 23: ACQUISITION

     On October 1, 2005, the Company acquired all of the outstanding common
     stock of Rantoul First Bank, SB located in Rantoul, Illinois. This
     acquisition expanded the Company's banking presence in east Central
     Illinois into Rantoul and surrounding communities. Under the terms of the
     agreement, the Company acquired all of the outstanding shares of common
     stock for $22.10 per share for a total purchase price of $4.2 million. The
     transaction was accounted for as a purchase, and the results of operations
     of both entities since the acquisition date have been included in the
     consolidated financial statements. The following table summarizes the
     estimated fair values of the assets acquired and liabilities assumed at the
     date of this transaction.

<TABLE>
<S>                                                   <C>
Cash and cash equivalents                             $ 1,972,552
Securities                                              9,503,128
Loans, net of allowance for loan losses of $200,201    14,504,337
Premises and equipment                                  1,387,844
Federal Home Loan Bank stock                            2,120,800
Foreclosed assets held for sale, net                      640,136
Interest receivable                                       162,955
Deferred income taxes                                     600,337
Goodwill                                                  541,474
Core deposit intangibles                                  422,128
Other assets                                              179,801
                                                      -----------
   Total assets acquired                               32,035,492
Deposits                                               26,736,981
Federal Home Loan Bank advances                           700,000
Other liabilities                                         292,519
                                                      -----------
   Total liabilities assumed                           27,729,500
                                                      -----------
   Net assets acquired                                $ 4,305,992
                                                      ===========
</TABLE>

     Transaction costs related to the completion of the transaction totaled
     $85,754. The fair value of deposits acquired in the transaction exceeded
     the book value, resulting in a core deposit intangible asset of $422,000,
     which will be amortized over 10 years. The total fair value of the assets
     and liabilities acquired exceeded the book value, resulting in goodwill of
     $541,474, which is not subject to amortization. The core deposit intangible
     and goodwill are not deductible for tax purposes.


                                       80

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                            DECEMBER 31,2006 AND 2005

     The results of operations relating to Rantoul First Bank, SB, have been
     reflected in the Company's consolidated statements of income beginning as
     of the acquisition date. The following proforma disclosures, including the
     effect of the purchase accounting adjustments, depict the results of
     operations as though the merger had taken place at the beginning of each
     period.

<TABLE>
<CAPTION>
                             YEAR ENDED DECEMBER 31,
                             -----------------------
                                2005         2004
                             ----------   ----------
<S>                          <C>          <C>
Net interest income          $8,088,751   $8,010,483
Net income                    1,024,773      937,813
Basic earnings per share           0.46         0.41
Diluted earnings per share         0.43         0.39

</TABLE>


                                       81
<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 24: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

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

<TABLE>
<CAPTION>
                                     DECEMBER 31, 2006             DECEMBER 31, 2005
                                ---------------------------   ---------------------------
                                  CARRYING          FAIR        CARRYING          FAIR
                                   AMOUNT          VALUE         AMOUNT          VALUE
                                ------------   ------------   ------------   ------------
<S>                             <C>            <C>            <C>            <C>
Financial assets
   Cash and cash equivalents    $ 28,791,349   $ 28,791,349   $ 12,447,133   $ 12,447,133
   Available-for-sale
      securities                  64,515,293     64,515,293     76,424,175     76,424,175
   Held-to-maturity
      securities                   4,779,948      4,661,650      3,437,417      3,383,547
   Loans held for sale               835,904        835,904        642,198        642,198
   Loans, net allowance of
      loan losses                185,443,561    185,796,000    156,884,910    155,150,383
   Federal Home Loan Bank
      stock                        3,748,855      3,748,855      6,608,412      6,608,412
   Interest receivable             2,919,235      2,919,235      2,415,689      2,415,689

Financial liabilities
   Deposits                      242,603,081    242,728,000    193,975,267    193,904,000
   Federal funds purchased                --             --      2,500,000      2,500,000
   Federal Home Loan Bank
      advances                    32,800,000      32,881,00     43,200,000     43,022,000
   Junior subordinated
      debentures                   6,186,000      6,084,000      6,186,000      6,402,000
   Pass through payments
      received on loans sold         122,282        122,282         74,695         74,695
   Advances by borrowers
      for taxes and insurance        148,051        148,051        189,366        189,366
   Interest payable                  929,094        929,094        245,118        245,118

Unrealized financial
   instruments (net of
   contract amount)
   Commitments to originate
      loans                                0              0              0              0
   Lines of credit                         0              0              0              0
</TABLE>


                                       82

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     The following methods and assumptions were used to estimate the fair value
     of each class of financial instruments.

CASH AND CASH EQUIVALENTS AND FEDERAL HOME LOAN BANK STOCK

     The carrying amount approximates fair value.

SECURITIES

     Fair values equal quoted market prices, if available. If quoted market
     prices are not available, fair value is estimated based on quoted market
     prices of similar securities.

LOANS HELD FOR SALE

     For homogeneous categories of loans, such as loans held for sale, fair
     value is estimated using the quoted market prices for securities backed by
     similar loans, adjusted for differences in loans characteristics.

LOANS

     The fair value of loans is estimated by discounting the future cash flows
     using the current rates at which similar loans would be made to borrowers
     with similar credit ratings and for the same remaining maturities. Loans
     with similar characteristics were aggregated for purposes of the
     calculations. The carrying amount of accrued interest approximates its fair
     value.

DEPOSITS

     The fair value of demand deposits, savings accounts, NOW accounts, and
     certain money market deposits is the amount payable on demand at the
     reporting date, i.e., their carrying amount. The fair value of
     fixed-maturity time deposits is estimated using a discounted cash flow
     calculation that applies the rates currently offered for deposits of
     similar remaining maturities. The carrying amount of accrued interest
     payable approximates its fair value.

FEDERAL HOME LOAN BANK ADVANCES AND JUNIOR SUBORDINATED DEBENTURES

     Rates currently available to the Company for debt with similar terms and
     remaining maturities are used to estimate fair value of existing debt.

FEDERAL FUNDS PURCHASED, PASS THROUGH PAYMENTS RECEIVED ON LOAN SOLD AND ADVANCE
PAYMENTS BY BORROWERS FOR TAXES AND INSURANCE

     The fair value approximates the carrying value.


                                       83

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

COMMITMENTS TO ORIGINATE LOANS AND LINES OF CREDIT

     The fair value of commitments is estimated using the fees currently charged
     to enter into similar agreements, taking into account the remaining terms
     of the agreements and the present creditworthiness of the counterparties.
     The fair value of lines of credit is based on fees currently charged for
     similar agreements or on the estimated cost to terminate or otherwise
     settle the obligations with the counterparties at the reporting date.

NOTE 25: SIGNIFICANT ESTIMATES AND CONCENTRATIONS

     Accounting principles generally accepted in the United States of America
     require disclosure of certain significant estimates and current
     vulnerabilities due to certain concentrations. Estimates related to the
     allowance for loan losses, loan servicing rights and foreclosed assets held
     for sale are reflected in the footnotes regarding loans, loan servicing
     rights and foreclosed assets held for sale. Current vulnerabilities due to
     certain concentrations of credit risk are discussed in the footnote on
     commitments and credit risk.

NOTE 26: COMMITMENTS, CREDIT RISK, AND CONTINGENT LIABILITIES

     The Company generates commercial, mortgage and consumer loans and receives
     deposits from customers located primarily in Edgar, Clark, Vermilion and
     Champaign counties as well as the surrounding communities. The Company's
     loans are generally secured by specific items of collateral including real
     property, consumer assets and business assets. Although the Company has a
     diversified loan portfolio, a substantial portion of its debtors' ability
     to honor their contracts is dependent upon economic conditions in the
     agricultural industry.

COMMITMENTS TO ORIGINATE LOANS

     Commitments to originate loans are agreements to lend to a customer as long
     as there is no violation of any condition established in the contract.
     Commitments generally have fixed expiration dates or other termination
     clauses and may require payment of a fee. Since a portion of the
     commitments may expire without being drawn upon, the total commitment
     amounts do not necessarily represent future cash requirements. Each
     customer's creditworthiness is evaluated on a case-by-case basis. The
     amount of collateral obtained, if deemed necessary, is based on
     management's credit evaluation of the counterparty. Collateral held varies,
     but may include accounts receivable, inventory, property, plant and
     equipment, commercial real estate and residential real estate.


                                       84

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

     At December 31, 2006 and 2005, the Company had outstanding commitments to
     originate loans aggregating approximately $5,686,007 and $7,214,425,
     respectively. The commitments extended over varying periods of time with
     the majority being disbursed within a one-year period. Loan commitments at
     fixed rates of interest amounted to $3,886,507 and $5,327,800 at December
     31, 2006 and 2005, respectively, with the remainder at floating market
     rates. At December 31, 2006, the Company had outstanding commitments to
     purchase $3,260,000 of federally guaranteed agricultural loans secured by
     farmland and farm equipment.

LINES OF CREDIT

     Lines of credit are agreements to lend to a customer as long as there is no
     violation of any condition established in the contract. Lines of credit
     generally have fixed expiration dates. Since a portion of the line may
     expire without being drawn upon, the total unused lines do not necessarily
     represent future cash requirements. Each customer's creditworthiness is
     evaluated on a case-by-case basis. The amount of collateral obtained, if
     deemed necessary, is based on management's credit evaluation of the
     counterparty. Collateral held varies but may include accounts receivable,
     inventory, property, plant and equipment, commercial real estate and
     residential real estate. Management uses the same credit policies in
     granting lines of credit as it does for on-balance-sheet instruments.

     At December 31, 2006, the Company had granted unused lines of credit to
     borrowers aggregating approximately $7,871,388 and $4,600,140 for
     commercial lines and open-end consumers lines, respectively. At December
     31, 2005, unused lines of credit to borrowers aggregated approximately
     $8,491,906 for commercial lines and $4,746,217 for open-end consumer lines.

OTHER CREDIT RISKS AND CONTINGENT LIABILITIES

     The Company had a concentration of funds on deposit with the Federal Home
     Loan Bank totaling $15,513,505 and $5,526,245 at December 31, 2006 and
     2005. The Company had deposits from two customers totaling approximately
     $33,510,770 and $12,259,000 as of December 31, 2006 and 2005.

NOTE 27: SUBSEQUENT EVENT

     The Company negotiated a revolving line of credit for $2,000,000 with
     LaSalle Bank National Association on March 13, 2007 for a term of one year.
     The interest rate, currently 7.09%, is subject to change monthly, and is
     based on the LIBOR rate plus 175 basis points. Interest payments will be
     due quarterly. Principal payments may be made at month end without penalty.
     The loan is secured by all of the First Bank & Trust, s.b. stock owned by
     the Company. The initial draw of $225,000 occurred on March 13, 2007.


                                       85

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 28: FUTURE CHANGE IN ACCOUNTING PRINCIPLE

     In September 2006, the Financial Accounting Standards Board (FASB) ratified
     Emerging Issues Task Force No. 06-4, Postretirement Benefits Associated
     with Split-Dollar Life Insurance (EITF 06-4). EITF 06-4 requires
     deferred-compensation or postretirement benefit aspects of an
     endorsement-type split-dollar life insurance arrangement to be recognized
     as a liability by the employer. The liability for future benefits should be
     recognized based on the substantive agreement with the employee, which may
     be either to provide a future death benefit or to pay for the future cost
     of the life insurance. EITF 06-4 is effective for fiscal years beginning
     after December 15, 2007. The Company is evaluating the impact of the
     adoption of EITF 06-4 on its financial condition, results of operations and
     cash flows.


                                       86

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 29: CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

     Presented below is condensed financial information as to financial
     position, results of operations and cash flows of the Company:

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                          DECEMBER 31,
                                                   -------------------------
                                                       2006          2005
                                                   -----------   -----------
<S>                                                <C>           <C>
ASSETS
   Cash and due from banks                         $       350   $       175
   Interest bearing demand deposits                    139,268       267,015
                                                   -----------   -----------
      Total cash and cash equivalents                  139,618       267,190
   Available-for-sale securities                       101,762        65,859
   ESOP loan to subsidiaries                           395,837       571,570
   Premises and equipment                              152,240       152,240
   Investment in consolidated subsidiaries:
      First Bank & Trust, S.B.                      31,099,161    30,381,825
      ECS Service Corporation                          331,999       333,275
      First Charter Service Corporation                 74,340        73,758
   Investment in FBTC Statutory Trust                  186,000       186,000
   Cash surrender value of life insurance               68,478        65,078
   Other assets                                        317,777       158,970
                                                   -----------   -----------
      Total assets                                 $32,867,212   $32,255,765
                                                   ===========   ===========
LIABILITIES
   Junior subordinated debentures                  $ 6,186,000   $ 6,186,000
   Other liabilities                                    25,346        23,587
                                                   -----------   -----------
      Total liabilities                              6,211,346     6,209,587
                                                   -----------   -----------
STOCKHOLDERS' EQUITY                                26,655,866    26,046,178
                                                   -----------   -----------
      Total liabilities and stockholders' equity   $32,867,212   $32,255,765
                                                   ===========   ===========
</TABLE>


                                       87

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                       YEAR ENDING DECEMBER 31,
                                                 ------------------------------------
                                                    2006         2005         2004
                                                 ----------   ----------   ----------
<S>                                              <C>          <C>          <C>
INCOME
   Dividends from First Bank & Trust, S.B.       $1,400,000   $  150,000   $  500,000
   Dividends from ECS Service Corporation            50,000           --      150,000
   Interest and dividend income                      51,398       71,830       54,823
   Net realized gains on sales of
      available-for-sale securities                      --      117,959       97,036
   Other income                                       3,399          113           55
                                                 ----------   ----------   ----------
      Total income                                1,504,797      339,902      801,914
                                                 ----------   ----------   ----------
EXPENSES-OTHER                                      797,272      564,200      364,437
                                                 ----------   ----------   ----------
INCOME (LOSS) BEFORE INCOME TAX AND EQUITY IN
   UNDISTRIBUTED INCOME OF SUBSIDIARIES             707,525     (224,298)     437,477
INCOME TAX BENEFIT                                 (305,340)    (147,331)     (84,876)
                                                 ----------   ----------   ----------
INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED
   INCOME OF SUBSIDIARIES                         1,012,865      (76,967)     522,353
EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES      102,964    1,324,662      705,380
                                                 ----------   ----------   ----------
NET INCOME                                       $1,115,829   $1,247,695   $1,227,733
                                                 ==========   ==========   ==========
</TABLE>


                                       88
<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                           YEAR ENDING DECEMBER 31,
                                                    --------------------------------------
                                                        2006          2005         2004
                                                    -----------   -----------   ----------
<S>                                                 <C>           <C>           <C>
OPERATING ACTIVITIES
   Net income                                       $ 1,115,829   $ 1,247,695   $1,227,733
   Items not requiring (providing) cash
      Net realized gains on available-for-sale
         securities                                          --      (117,959)     (97,036)
      Equity in undistributed income of
         subsidiaries                                  (102,964)   (1,324,662)    (705,380)
   Changes in
      Other assets                                     (160,947)      (68,171)     (93,810)
      Other liabilities                                     473        13,735      (34,553)
                                                    -----------   -----------   ----------
      Net cash provided by operating activities         852,391      (249,362)     296,954
                                                    -----------   -----------   ----------
INVESTING ACTIVITIES
   Net change in ESOP loan                              175,733       175,733      175,732
   Purchases of available-for-sale securities           (35,834)     (185,945)    (299,051)
   Proceeds from the sales of available-for-sale
      securities                                             --       985,299      514,235
   Purchase of premises and equipment                        --      (152,240)          --
   Purchase of life insurance policy                         --            --      (62,065)
   Investment in FBTC Statutory Trust                        --      (186,000)          --
   Purchase of Rantoul First Bank, SB                        --    (4,305,992)          --
                                                    -----------   -----------   ----------
      Net cash provided by (used in) investing
         activities                                     139,899    (3,669,145)     328,851
                                                    -----------   -----------   ----------
FINANCING ACTIVITIES
   Purchase of treasury stock                          (684,334)   (1,639,297)     (69,104)
   Dividends paid                                      (542,548)     (581,970)    (574,768)
   Issuance of long-term debt                                --     6,186,000           --
   Exercise of stock options                             98,700        41,454           --
   Tax benefit related to stock options exercised         8,320         4,941           --
                                                    -----------   -----------   ----------
      Net cash provided by (used in) financing
         activities                                  (1,119,862)    4,011,128     (643,872)
                                                    -----------   -----------   ----------
NET CHANGE IN CASH AND CASH EQUIVALENTS                (127,572)       92,621      (18,067)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR          267,190       174,569      192,636
                                                    -----------   -----------   ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR            $   139,618   $   267,190   $  174,569
                                                    ===========   ===========   ==========
</TABLE>


                                       89

<PAGE>

                           FIRST BANCTRUST CORPORATION
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2006 AND 2005

NOTE 30: QUARTERLY FINANCIAL INFORMATION

     The following is a summary of selected quarterly results of operations for
     the years ended December 31, 2006 and 2005:

<TABLE>
<CAPTION>
                                                  QUARTER ENDED
                                ------------------------------------------------
                                DECEMBER 31   SEPTEMBER 30    JUNE 30   MARCH 31
                                -----------   ------------   --------   --------
                                        (In thousands, except share data)
<S>                             <C>           <C>            <C>        <C>
2006
   Net interest income             $1,950        $1,992       $1,948     $2,017
   Provision for loan losses           67            68           50         45
   Noninterest income                 848           897          931        785
   Noninterest expense              2,351         2,491        2,452      2,489
   Income before income tax           380           330          377        268
   Net income                         336           272          281        727
   Basic earnings per share          0.16          0.12         0.13       0.10
   Diluted earnings per share        0.14          0.12         0.12       0.10

2005
   Net interest income             $2,056        $1,863       $1,908     $1,839
   Provision for loan losses          223            99           94         94
   Noninterest income                 838           848          842        810
   Noninterest expense              2,344         2,305        2,127      2,157
   Income before income tax           327           307          529        398
   Net income                         283           262          400        303
   Basic earnings per share          0.13          0.12         0.18       0.13
   Diluted earnings per share        0.12          0.11         0.17       0.12
</TABLE>


                                       90

<PAGE>

                           FIRST BANCTRUST CORPORATION
                             SHAREHOLDER INFORMATION

STOCK LISTING AND PRICE INFORMATION

The Company's common stock trades on the Nasdaq Capital Market under the symbol
"FBTC". As of March 9, 2007, the number of outstanding shares of common stock of
the Company totaled 2,293,400. These shares were held by 435 persons or
entities, which does not individually count each person or entity holding stock
in nominee of street name through various brokers or banks.

The following schedule shows the high and low bid prices for each of the
quarters in 2004, 2005, and 2006:

<TABLE>
<CAPTION>
  Quarter Ended:      High    Low
  --------------     -----   -----
<S>                  <C>     <C>
March 31, 2004       13.07   11.75
June, 30 2004        13.32   12.25
September 30, 2004   12.53   11.50
December 31, 2004    12.74   11.80
March 31, 2005       12.89   11.71
June, 30 2005        12.65   10.85
September 30, 2005   12.90   12.59
December 31, 2005    12.90   11.95
March 31, 2006       13.49   11.63
June, 30 2006        12.23   10.95
September 30, 2006   12.20   11.35
December 31, 2006    12.00   11.02
</TABLE>

At March 9, 2007, the closing price of a common share was $11.75. Such prices do
not necessarily reflect retail markups, markdowns, or commissions. During the
years ended December 31, 2004, 2005, and 2006, the Company declared dividends as
follows:

<TABLE>
<CAPTION>
  Date Declared        Record Date         Payment Date          Amount
  -------------     -----------------   ------------------   -------------
<S>                 <C>                 <C>                  <C>
February 12, 2004   February 24, 2004   March 5, 2004            $0.05
March 25, 2004      April 30, 2004      May 21, 2004         2 for 1 split
May 13, 2004        June 4, 2004        June 11, 2004            $0.06
August 12, 2004     August 30, 2004     September 8, 2004        $0.06
November 12, 2004   November 29, 2004   December 17, 2004        $0.06
February 10, 2005   February 25, 2005   March 8, 2005            $0.06
May 12, 2005        June 3, 2005        June 14, 2005            $0.06
August 11, 2005     August 26, 2005     September 9, 2005        $0.06
November 10, 2005   December 2, 2005    December 16, 2005        $0.06
February 9, 2006    February 21, 2006   March 6, 2006            $0.06
May 11, 2006        June 5, 2006        June 14, 2006            $0.06
August 10, 2006     September 1, 2006   September 15, 2006       $0.06
November 9, 2006    December 4, 2006    December 15, 2006        $0.06
</TABLE>

All dividends per share have been adjusted to reflect the stock split.


                                       91

<PAGE>

The following graph compares the cumulative total stockholder return on the
Company's common stock ("FBTC"), with the cumulative return for the NASDAQ,
Total Return Index and the SNL Less Than $250 Million Thrift Index over the same
period, assuming the investment of $100 on April 19, 2001, and reinvestment of
all dividends.

                           FIRST BANCTRUST CORPORATION

                               (PERFORMANCE GRAPH)

<TABLE>
<CAPTION>
                                                       PERIOD ENDING
                              ---------------------------------------------------------------
INDEX                         12/31/01   12/31/02   12/31/03   12/31/04   12/31/05   12/31/06
-----                         --------   --------   --------   --------   --------   --------
<S>                           <C>        <C>        <C>        <C>        <C>        <C>
First BancTrust Corporation    100.00     112.63     166.49     165.85     174.58     171.62
NASDAQ Composite               100.00      68.76     103.67     113.16     115.57     127.58
SNL <$250M Thrift Index        100.00     124.61     173.38     175.97     170.07     170.14
</TABLE>

SOURCE : SNL FINANCIAL LC, CHARLOTTESVILLE, VA                    (434) 977-1600
(C) 2007                                                             www.snl.com


                                       92

<PAGE>

Stockholders, investors and analysts interested in additional information may
contact:

Sarah Aguirre
Administrative Assistant
First BancTrust Corporation
101 S. Central Avenue
Paris, IL 61944-0880

ANNUAL REPORT ON FORM 10-K

A copy of the annual report on Form 10-K for the fiscal year ended December 31,
2006, filed with the Securities and Exchange Commission is available to
stockholders (excluding exhibits) at no charge, upon written request to Sarah
Aguirre, Administrative Assistant, at the above address.

SPECIAL REGULATORY COUNSEL

Howard & Howard Attorneys, P.C.
The Pinehurst Office Center, Suite 101
39400 Woodward Avenue
Bloomfield Hills, MI 48304-5151

INDEPENDENT ACCOUNTANTS

BKD, LLP
225 North Water Street
Suite 400
Decatur, IL 62525-1580

ANNUAL MEETING OF STOCKHOLDERS

The Annual Meeting of Stockholders of First BancTrust Corporation will be held
at 10:00 a.m. April 23, 2007 at:

Human Resources Center
118 E. Court Street
Paris, Illinois 61944

TRANSFER AGENT

Inquiries regarding stock transfer, registration, lost certificates or changes
in name and address should be directed to the transfer agent:

Illinois Stock Transfer Company
209 W. Jackson Boulevard
Suite 903
Chicago, Illinois 60606
(312) 427-2953


                                       93

<PAGE>

                                    DIRECTORS

JOHN W. WELBORN
Chairman of the Board; Retired Facilities Manager, TRW, Inc., Marshall, Illinois

JOSEPH R. SCHROEDER
Attorney in private practice with the law firm of Bennett, Schroeder & Wieck,
Marshall, Illinois

VICK N. BOWYER
Co-owner and registered principal of Linsco/Private Ledger Branch, a registered
broker-dealer, Marshall, Illinois

JAMES D. MOTLEY
Self employed owner of accounting firm James D. Motley, C.P.A. Paris, Illinois

TERRY T. HUTCHISON
Self-employed Business Consultant, Paris, Illinois

DAVID W. DICK
Senior Partner Gladding & Dick Insurance; agents for Country Insurance and
Financial Services, Bloomington, Illinois; Illinois licensed embalmer and
funeral director

JOHN P. GRAHAM
Director of Accounting, Regency Associates, Champaign, Illinois

TERRY J. HOWARD
President and Chief Executive Officer of the Company and First Bank

                               EXECUTIVE OFFICERS

TERRY J. HOWARD
Director, President and Chief Executive Officer of the Company and First Bank &
Trust, s.b.

ELLEN M. LITTERAL
Chief Financial Officer and Treasurer of the Company and Senior Vice President
of First Bank & Trust, s.b.

JACK R. FRANKLIN
Sr. Vice President of the Company and President of the First Bank of Savoy, a
branch of First Bank & Trust, s.b.

DAVID F. SULLIVAN
Vice President of the Company and President of First Bank of Paris, a branch of
First Bank & Trust, s.b.

LARRY W. STROHM
Vice President of the Company and President of First Bank of Marshall, a branch
of First Bank & Trust, s.b.

                                BANKING LOCATIONS

                                   MAIN OFFICE

                            101 South Central Avenue
                              Paris, Illinois 61944
                                 (217) 465-6381

                                 BRANCH OFFICES

610 North Michigan Avenue
Marshall, Illinois 62441
(217) 826-6308

1500 East Grove Avenue
Rantoul, Illinois 61866
(217) 893-8100

826 West Champaign
Rantoul, Illinois 61866
(217) 892-9111

1251 Woodfield Drive
Savoy, Illinois 61874
(217) 351-3526

10 East Cumberland
Martinsville, Illinois 62442
(217) 382-3430

Community Finance
208 West Washington St
Paris, Illinois 61944
(217) 465-5626


                                       94