**U.S. SECURITIES AND EXCHANGECOMMISSION**

**Washington,DC  20549**

**FORM 10-KSB**
| **x**                                                                                                                                                                                                                       | **Annual report under Section 13 or 15(d) of the  Securities Exchange Act of 1934**     |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|
| ** **                                                                                                                                                                                                                  | ** **                                                                              |
| **For the  fiscal year ended December 31, 2006**                                                                                                                                                                            |
| ** **                                                                                                                                                                                                                  | ** **                                                                              |
| **o**                                                                                                                                                                                                                       | **Transition report under Section 13 or 15(d) of  the Securities Exchange Act of 1934** |
|                                                                                                                                                                                                                        |                                                                                    |
| **For the  transition period  from               to               .** |

 

**CommissionFile No.:  000-51104**

**CommerceFirst Bancorp, Inc.**

(Name of Small Business Issuer inits Charter)

| **Maryland**                              |      | **52-2180744**                        |
|-------------------------------------------|-----------|---------------------------------------|
| (State or other  jurisdiction             |      | (I.R.S. Employer  Identification No.) |
| of incorporation  or organization)        |      |                                  |
|                                      |      |                                  |
| **1804  West Street, Annapolis MD**       | **21401** |
| (Address of  Principal Executive Offices) |      | (Zip Code)                            |
|                                           |           |                                       |  |

 

Issuer’s Telephone Number:**  410-280-6695**

Securities registered underSection 12(b) of the Act: **Common Stock, $0.01 parvalue**

Securities registered underSection 12(g) of the Act:  **None**

Indicate by check mark if the registrant is not required to file reportspursuant to Section 13 or Section 15(d) of the Act

Yes  o  No  x.

Check whether the Issuer; (1) filed all reports required to be filed bySection 13 or 15(d) of the Exchange Act during the past 12 months (or for suchshorter period that the registrant was required to file such reports; and (2)has been subject to such filing requirements for the past 90 days.

Yes  x  No  o.

Check if there is no disclosureof delinquent filers in response to Item 405 of Regulation S-B contained inthis form, and no disclosure will be contained, to the best of registrant’sknowledge, in definitive proxy or information statements incorporated byreference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB     o

Indicate by check mark whether the registrant is a shell company (as definedin Rule 12b-2 of the Exchange Act).

Yes  o  No  x.

The issuer’s revenues forthe fiscal year ended December 31, 2006 were approximately $8,839,000.

The aggregate market value of theoutstanding Common Stock held by non-affiliates as of March 9, 2007 wasapproximately $20,509,000.

As of March 12, 2007, the numberof outstanding shares of the Common Stock, $0.01 par value, of CommerceFirstBancorp, Inc. was 1,803,583.

Transitional SmallBusiness Disclosure Format  Yes  o  No  x.

DOCUMENTS INCORPORATED BYREFERENCE

Portions of the followingdocuments are hereby incorporated by reference in this Form 10-KSB:  the Company’s Annual Report to Shareholdersfor the Year Ended December 31, 2006—Part II ; the Company’s Proxy Statementfor the Annual Meeting of Shareholders to be held on April 18, 2007—Part III.

 

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**PART I**

**ITEM 1.  Description of Business.**

CommerceFirst Bancorp, Inc. (the “Company”)was incorporated under the laws of the State of Maryland on July 9, 1999, toserve as the bank holding company for a newly formed Maryland charteredcommercial bank.  The Company was formedby a group of local businessmen and professionals with significant priorexperience in community banking in the Company’s market area, together with anexperienced community bank senior management team. The Company’s solesubsidiary, CommerceFirst Bank (the “Bank”), a Maryland chartered commercialbank and member of the Federal Reserve System, commenced banking operations onJune 29, 2000.

The Bank operates from itsheadquarters in Annapolis, Maryland, and from branch offices in Lanham (openedin September 2004), Glen Burnie (opened in June 2006), and Columbia (opened inAugust 2006), Maryland.  In January 2007,regulatory approval to open the Bank’s fifth banking office, to be located inSeverna Park, Maryland, was received. The new office is expected to open in the second quarter of 2007.  The Bank expects that it will seek to openadditional branch offices in Anne Arundel, Prince George’s and Howard Countiesand possibly neighboring counties in locations with high concentrations of businesscustomers.  The goal is to establish anaverage of at least one additional branch per year over the next three to fiveyears.  It is the plan to continueto expand the banking franchise by selectively opening additional branches, andby attracting additional experienced lending officers to build the customerbase within our target market area.  TheBank believes it is well positioned to continue to grow assets and increaseshareholder value while maintaining loan quality and individualized customer service.There can be no assurance that the Bank willopen any additional branches in its market area, the timing of any branchdevelopment, that any branch will be profitable, or that branching activitywill add to shareholder value.

The Bank operates as a communitybank alternative to the super-regional financial institutions that dominate itsprimary market area. The cornerstone of the Bank’s philosophy is to providesuperior, individualized service to its customers.  The Bank focuses on relationship banking,providing each customer with a number of services, familiarizing itself with,and addressing itself to, customer needs in a proactive, personalized fashion.

*Description ofServices. *The Bank offers full commercial banking servicesto its business and professional clients. The Bank emphasizes providingcommercial banking services to sole proprietorships, small and medium-sizedbusinesses, partnerships, corporations, and non-profit organizations andassociations in and near the Bank’s primary service area.  Limited retail banking services are offeredto accommodate the individual needs of commercial customers as well as membersof the communities the Bank serves.

The Bank is developing a loanportfolio consisting primarily of business loans with variable rates and/orshort maturities where the cash flow of the borrower is the principal source ofdebt service, with a secondary emphasis on collateral.  Real estate loansare made generally for commercial purposes and are structured with fixed ratesthat adjust in three to five years, generally with maturities of five to tenyears, or with variable rates tied to various external indices and adjusting asthe indices change.

In general, the Bank offers thefollowing credit services:
|        | 1) |   | Commercial loans for business purposes including  working capital, equipment purchases, real estate, lines of credit, and  government contract financing. Asset based lending and accounts receivable  financing are available on a selective basis. |
|--------|----|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | 2) |   | Real estate  loans for business and investment purposes.                                                                                                                                                                                             |
|   | 3) |   | Commercial lines  of credit.                                                                                                                                                                                                                         |
|   | 4) |   | Merchant credit  card services are offered through an outside vendor.                                                                                                                                                                                |

 

TheBank has developed an expertise in making loans under the guarantee programs ofthe SBA. The Bank currently expects that it will sell the guaranteed portion ofSBA loans to secondary market investors as soon as possible after funding,while retaining the uninsured portion. The sale of the guaranteed portion ofsuch loans is expected to result

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in gains, and the Bankexpects to receive fees for servicing the loans.  SBA guaranteed loans are subjected to thesame underwriting standards applied to other loans.

The direct lending activities inwhich the Bank engages each carries the risk that the borrowers will be unableto perform on their obligations.  Assuch, interest rate policies of the Federal Reserve Board and general economicconditions, nationally and in the Bank’s primary market area, have asignificant impact on the Bank’s and the Company’s results of operations.  To the extent that economic conditionsdeteriorate, business and individual borrowers may be less able to meet theirobligations to the Bank in full in a timely manner, resulting in decreasedearnings or losses to the Bank.  To theextent the Bank makes fixed rate loans, general increases in interest rateswill tend to reduce the Bank’s spread as the interest rates the Bank must payfor deposits increase while interest income is flat.  Economic conditions and interest rates mayalso adversely affect the value of property pledged as security for loans.

Deposit services include businessand personal checking accounts, NOW accounts, savings accounts, and a tieredMoney Market Account basing the payment of interest on balances on deposit. Certificates of Deposits are offered using a tiered rate structure and variousmaturities.  The acceptance of brokered deposits in limited amounts****is utilized when deemed appropriate by management in orderto have available funding sources for loans and investments.

Other services for businessaccounts include Internet banking services, cash management services such assweep accounts-repurchase agreements, a limited lockbox processing service, andcredit card depository. An after hours depository is also available.

Bills have been introduced in each of the lastseveral Congresses that would permit banks to pay interest on checking anddemand deposit accounts established by businesses, a practice which iscurrently prohibited by regulation. If the legislation effectively permittingthe payment of interest on business demand deposits is enacted, of which therecan be no assurance, it is likely that the Bank may be required to pay intereston some portion of its non-interest bearing deposits in order to competeagainst other banks.  As a significantportion of its deposits are non-interest bearing demand deposits established bybusinesses, payment of interest on these deposits could have a significantnegative impact on its net income, net interest income, interest margin, returnon assets and equity, and other indices of financial performance.  The Bank expects that other banks would befaced with similar negative impacts.  TheBank also expects that the primary focus of competition would continue to bebased on other factors, such as quality of service.

*Source of Business. *Management believes that the market segments which the Bank targets,small to medium sized businesses and the professional base of the Bank’s marketarea, demand the convenience and personal service that a smaller, independentfinancial institution such as the Bank can offer.  It is these themes ofconvenience and personal service that form the basis for the Bank’s businessdevelopment strategies.  The Bank provides services from its strategicallylocated main office in Annapolis, Maryland, and from its branch offices inLanham, Glen Burnie and Columbia, Maryland. It believes these locations meetthe needs of the Bank’s existing and potential customers, and provide prospectsfor additional growth and expansion. Subject to obtaining necessary regulatory approvals, capital adequacy,the identification of appropriate sites, then current business demand and otherfactors, the Company plans for the Bank to consider establishment of additionalbranch offices.  There can be noassurance that the Bank will establish any additional branches or that anybranch will be profitable.  The Bankopened two branches in 2006, one in Glen Burnie, Maryland in the secondquarter, and one in Columbia, Maryland in the third quarter.

The Bank has capitalized upon theextensive business and personal contacts and relationships of its Directors andExecutive Officers to establish the Bank’s initial customer base.  To introduce new customers to the Bank,reliance is placed on aggressive officer-originated calling programs anddirector, customer and shareholder referrals.

The risk of nonpayment (ordeferred payment) of loans is inherent in commercial banking.  The Bank’smarketing focus on small to medium-sized businesses may result in theassumption by the Bank of certain lending risks that are different from thoseattendant to loans to larger companies.  Management of the Bank carefullyevaluates all loan applications and attempts to minimize its credit riskexposure by use of thorough loan application, approval and monitoringprocedures; however, there can be no assurance that such procedures cansignificantly reduce such lending risks.

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**Employees**

At December 31, 2006 the Bankemployed 29 full time equivalents, two of whom as executive officers. TheChairman of the Board, an attorney in private practice, devotes considerabletime each month to the advancement of the Bank, principally in businessdevelopment activities. The Company (as distinguished from the Bank) does not haveany employees or officers who are not employees or officers of the Bank.  None of the Bank’s employees are representedby any collective bargaining group, and the Bank believes that its employeerelations are good.  The Bank provides abenefit program that includes health and dental insurance, a 401(k) plan, andlife and long-term disability insurance for substantially all full timeemployees.

**Market Area and Competition**

*Location and Market Area. *The main office and the headquarters are locatedat 1804 West Street, Annapolis, Maryland 21401. The second office is located at 4451 Parliament Place, Lanham, Maryland20706, and opened in the third quarter of 2004. The third office is located at910 Cromwell Park Drive, Glen Burnie, Maryland 21061 and opened late in thesecond quarter of 2006. The fourth office is located at 6230 Old Dobbin Lane,Columbia, Maryland and opened in the third quarter of 2006. In December 2006, the Bank filed for regulatorypermission to open a new branch office, its fifth banking office, in leasedspace in the Severna Park Market Center in Severna Park, Maryland.

TheCompany is located in one of the most dynamic regions in the United States. TheFederal Government has a major direct and indirect influence on the economies,infrastructure and land use management of Washington, D.C. and the Maryland andVirginia counties surrounding Washington. According to the State of Maryland’s Department of Business and EconomicDevelopment (the “Department”), the region is the nation’s 4th largest market — with a population of 6.9million and a workforce of 3.4 million — and is the home to three majorairports, the nation’s capital and a highly educated workforce. The regionaleconomy is perennially strong and diverse, boasts consistently high job growthand low unemployment and is increasingly service sector and small businessoriented.  Information technology, themedical industry and tourism are all major growth industries for the region.  These industries are characterized by smallniche oriented enterprises that thrive on their ability to tap the highlyeducated workforce and abundant access to the region’s substantialcommunications infrastructure.

The Bank’s market strategy is to grow within the CentralMaryland corridor, which consists of Anne Arundel, Prince George’s, Montgomeryand Howard counties.  The Bank iscurrently focused on Anne Arundel, Prince George’s and Howard counties, areaswhich it believes have significant growth opportunities.

*AnneArundel County* evolved from a bedroom community to Baltimoreto be more heavily influenced by Washington growth factors.  Based on data provided by the County’sEconomic Development Corporation, in the past two decades, the county hasdeveloped its own unique and diverse economy. This has occurred due to growthopportunities presented by Baltimore/Washington International Airport, whichserved over 20 million passengers in 2006 and has long been considered one ofthe State of Maryland’s prime economic engines; the National Security Agency,which has approximately 25 thousand employees; Northrop Grumman, ahigh-technology firm with over 7 thousand employees, the largest private sectoremployer in the county; the United States Naval Academy; the increasing tourismindustry in the historic City of Annapolis and recently the Arundel Mills Mall.These unique attributes create attractive opportunities for small businesses toservice both highly sophisticated enterprises and rapidly developingfirms.  The local economy is dominated bysmall and mid-sized service sector enterprises. Anne Arundel County is home to over 14 thousand businesses, 97% of whichhave fewer than 100 employees. The county’s economy has deep roots in Internetbased services; high-technology telecommunications; product distribution, aresult of proximity of goods arriving to the Port of Baltimore and BWI Airport;and technical support services.  Oncehome to large Maryland-based regional banks, financial services are nowprimarily provided by larger super-regional institutions such as Bank ofAmerica, SunTrust, Wachovia, M & T Bank and BB&T, all of which expandedinto this highly attractive banking market over the past decade by acquisition.Based on data from the 2000 Census and in projected figures by the County’sEconomic Development Corporation, Anne Arundel County has a population inexcess of 600 thousand and provides 285 thousand civilian labor force jobs, 70%of which are in the service sector, and has a low 3.7% unemployment rate.  The mean household income of $76 thousandcompares very favorably to the national average.

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*PrinceGeorge’s County*. Relocating and expanding businesses havebeen increasingly attracted to Prince George’s County due to its competitivelypriced land and buildings, an integrated transportation system, proximity toWashington, D.C., and attractive business incentives such as the county’sRevitalization Tax Credit, a new High Technology Incentive Package, EnterpriseZone benefits and a foreign trade zone. Increasingly restrictive land use policies in Montgomery and AnneArundel counties have provided significant growth opportunities in PrinceGeorge’s.  The county closely mirrorsAnne Arundel County with respect to small business enterprises, with 97% of theover 14 thousand employers having fewer than 100 workers, according to theDepartment.  Based on further data fromthe Department, government is also a significant influence, with 75 thousandFederal, state and county employees, led by Andrews Air Force Base, which has17 thousand employees, and the University of Maryland which has over 11thousand employees.  Similar to AnneArundel County, large super-regional banking institutions have obtainedadditional market share in the suburban Washington market from the acquisitionof many of the community banks that once existed in this area. Prince George’sCounty has a population of 805 thousand and an unemployment rate of 4.8%.  A favorable and accommodative businessclimate has helped fuel the strong housing market, with average sale pricesabove $300 thousand, and has attracted a highly educated workforce with anaverage household income of $55 thousand, according to Department figures.

*Howard County*. Expansion intoneighboring Howard County is a natural extension of the Bank’s strategic growthplan. Howard County is situated in the heartof the corridor between Washington, D.C. and Baltimore. Howard County’sgeographic location has resulted in the substantial growth of a wide variety ofindustries, including high-tech and life science businesses, in addition totransportation and education related activities. Accessible to I-95 and I-70,the county is located within a 20-minute drive of Baltimore/WashingtonInternational Airport and the Port of Baltimore, and serves as a bedroomcommunity for both Baltimore and Washington DC area employers, in addition tohaving a strong economic base of its own. Howard County’s almost 8 thousandbusinesses employ about 12 thousand workers; only 250 of those businesses havemore than 100 workers. Like the other counties in which the Company operates,the population and workforce of Howard County is highly educated, and incomelevels are favorably high.  Per capitaincome for 2002 in Howard County was in excess of $45 thousand, as compared to$36 thousand for Maryland as a whole and almost $31,000 nationally.

*Competition. *Deregulation of financial institutions and holding company acquisitionsof banks across state lines has resulted in widespread, fundamental changes inthe financial services industry.  This transformation, although occurringnationwide, is particularly intense in the greater Baltimore/Washington, DCarea.  In Anne Arundel, Prince George’sand Howard Counties, competition is exceptionally keen from large bankinginstitutions headquartered outside of Maryland.  In addition, the Bankcompetes with other community banks, savings and loan associations, creditunions, mortgage companies, finance companies and others providing financialservices.  Among the advantages that many of these institutions have overthe Bank are their abilities to finance extensive advertising campaigns,maintain extensive branch networks and technology investments, and to directlyoffer certain services, such as international banking and trust services, whichthe Bank does not directly offer.  Further, the greater capitalization ofthe larger institutions allows for substantially higher lending limits than theBank.  Certain of these competitors haveother advantages, such as tax exemption in the case of credit unions, andlesser regulation in the case of mortgage companies and finance companies.

**Regulation**

The following summaries ofstatutes and regulations affecting bank holding companies do not purport to becomplete discussions of all aspects of such statutes and regulations and arequalified in their entirety by reference to the full text thereof.

*The Company. *The Company is a bank holding company registered under the Bank HoldingCompany Act of 1956, as amended, (the “Act”) and is subject to supervision bythe Federal Reserve Board.  As a bank holding company, the Company isrequired to file with the Federal Reserve Board an annual report and such otheradditional information as the Federal Reserve Board may require pursuant to theAct.  The Federal Reserve Board may also make examinations of the Companyand each of its subsidiaries.

The Act requires approval of theFederal Reserve Board for, among other things, the acquisition by a proposedbank holding company of control of more than five percent (5%) of the votingshares, or substantially all the assets, of

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any bank or the merger or consolidation by a bankholding company with another bank holding company.  The Act also generallypermits the acquisition by a bank holding company of control or substantiallyall the assets of any bank located in a state other than the home state of thebank holding company, except where the bank has not been in existence for theminimum period of time required by state law, but if the bank is at least 5years old, the Federal Reserve Board may approve the acquisition.

With certain limited exceptions,a bank holding company is prohibited from acquiring control of any votingshares of any company which is not a bank or bank holding company and fromengaging directly or indirectly in any activity other than banking or managingor controlling banks or furnishing services to or performing service for itsauthorized subsidiaries.  A bank holding company may, however, engage inor acquire an interest in, a company that engages in activities which theFederal Reserve Board has determined by order or regulation to be so closelyrelated to banking or managing or controlling banks as to be properly incidentthereto.  In making such a determination, the Federal Reserve Board isrequired to consider whether the performance of such activities can reasonablybe expected to produce benefits to the public, such as convenience, increasedcompetition or gains in efficiency, which outweigh possible adverse effects,such as undue concentration of resources, decreased or unfair competition,conflicts of interest or unsound banking practices.  The Federal ReserveBoard is also empowered to differentiate between activities commenced *de novo* and activities commenced by the acquisition, inwhole or in part, of a going concern.  Some of the activities that theFederal Reserve Board has determined by regulation to be closely related tobanking include making or servicing loans, performing certain data processingservices, acting as a fiduciary or investment or financial advisor, and making investmentsin corporations or projects designed primarily to promote community welfare.

Subsidiary banks of a bankholding company are subject to certain restrictions imposed by the FederalReserve Act on any extensions of credit to the bank holding company or any ofits subsidiaries, or investments in the stock or other securities thereof, andon the taking of such stock or securities as collateral for loans to anyborrower.  Further, a holding company and any subsidiary bank areprohibited from engaging in certain tie-in arrangements in connectionwith the extension of credit.  A subsidiary bank may not extend credit,lease or sell property, or furnish any services, or fix or vary theconsideration for any of the foregoing on the condition that: (i) the customerobtain or provide some additional credit, property or services from or to suchbank other than a loan, discount, deposit or trust service; (ii) the customerobtain or provide some additional credit, property or service from or to theCompany or any other subsidiary of the Company; or (iii) the customer notobtain some other credit, property or service from competitors, except forreasonable requirements to assure the soundness of credit extended.

Effective on March 11, 2000, the Gramm-Leach-Bliley Act of 1999 (the “GLBAct”) allows a bank holding company or other company to certify status as afinancial holding company, which allows such company to engage in activitiesthat are financial in nature, that are incidental to such activities, or arecomplementary to such activities. The GLB Act enumerates certain activitiesthat are deemed financial in nature, such as underwriting insurance or actingas an insurance principal, agent or broker, underwriting, dealing in or makingmarkets in securities, and engaging in merchant banking under certainrestrictions.  It also authorizes theFederal Reserve Board to determine by regulation what other activities arefinancial in nature, or incidental or complementary thereto. The GLB Act allows a wider array of companies toown banks, which could result in companies with resources substantially inexcess of the Company’s entering into competition with the Company and theBank.

The GLB Act made substantialchanges in the historic restrictions on non-bank activities of bank holdingcompanies, and allows affiliations between types of companies that werepreviously prohibited.  The GLB Act alsoallows banks to engage in a wider array of non-banking activities through “financialsubsidiaries.”

*The Bank. *The Bank, as a Maryland chartered commercial bank which is a member ofthe Federal Reserve System (a “state member bank”) and whose accounts will beinsured by the Bank Insurance Fund of the Federal Deposit Insurance Corporation(the “FDIC”) up to the maximum legal limits of the FDIC, is subject toregulation, supervision and regular examination by the Maryland Department ofFinancial Institutions and the Federal Reserve Board.  The regulations of these various agenciesgovern most aspects of the Bank’s business, including required reserves againstdeposits, loans, investments, mergers and acquisitions, borrowing, dividendsand location and number of branch offices. The laws and regulations governingthe Bank generally have been promulgated to protect depositors and the depositinsurance funds, and not for the purpose of protecting stockholders.

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Competition among commercialbanks, savings and loan associations, and credit unions has increased followingenactment of legislation that greatly expanded the ability of banks and bankholding companies to engage in interstate banking or acquisitionactivities.  As a result of federal andstate legislation, banks in the Washington D.C./Maryland/Virginia area can,subject to limited restrictions, acquire or merge with a bank in another of thejurisdictions, and can branch *de novo* in anyof the jurisdictions.  Additionally,legislation has been proposed which may result in non-banking companies beingauthorized to own banks, which could result in companies with resourcessubstantially in excess of the Company’s entering into competition with theCompany and the Bank.

Banking is a business thatdepends on interest rate differentials.  In general, the differencesbetween the interest paid by a bank on its deposits and its other borrowings andthe interest received by a bank on loans extended to its customers andsecurities held in its investment portfolio constitute the major portion of thebank’s earnings.  Thus, the earnings and growth of the Bank will besubject to the influence of economic conditions generally, both domestic andforeign, and also to the monetary and fiscal policies of the United States andits agencies, particularly the Federal Reserve Board, which regulates thesupply of money through various means including open market dealings in UnitedStates government securities.  The nature and timing of changes in suchpolicies and their impact on the Bank cannot be predicted.

*Branching and InterstateBanking.*  The federal banking agencies are authorizedto approve interstate bank merger transactions without regard to whether suchtransaction is prohibited by the law of any state, unless the home state of oneof the banks has opted out of the interstate bank merger provisions of theRiegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the “Riegle-NealAct”) by adopting a law after the date of enactment of the Riegle-Neal Act andprior to June 1, 1997 which applies equally to all out-of-state banks andexpressly prohibits merger transactions involving out-of-state banks.  Interstate acquisitions of branches arepermitted only if the law of the state in which the branch is located permitssuch acquisitions.  Such interstate bankmergers and branch acquisitions are also subject to the nationwide andstatewide insured deposit concentration limitations described in theRiegle-Neal Act.

The Riegle-Neal Act authorizesthe federal banking agencies to approve interstate branching *de novo*by national and state banks in states thatspecifically allow for such branching. The District of Columbia, Maryland and Virginia have all enacted lawsthat permit interstate acquisitions of banks and bank branches and permitout-of-state banks to establish *de novo*branches.

*USA Patriot Act.*  Under theUniting and Strengthening America by Providing Appropriate Tools Required toIntercept and Obstruct Terrorism Act, commonly referred to as the “USA PatriotAct” or the “Patriot Act”, financial institutions are subject to prohibitionsagainst specified financial transactions and account relationships, as well asenhanced due diligence standards intended to detect, and prevent, the use ofthe United States financial system for money laundering and terrorist financingactivities.  The Patriot Act requiresfinancial institutions, including banks, to establish anti-money launderingprograms, including employee training and independent audit requirements, meetminimum standards specified by the act, follow minimum standards for customeridentification and maintenance of customer identification records, andregularly compare customer lists against lists of suspected terrorists,terrorist organizations and money launderers. The costs or other effects of the compliance burdens imposed by thePatriot Act or future anti-terrorist, homeland security or anti-moneylaundering legislation or regulations cannot be predicted with certainty.

*Capital AdequacyGuidelines.*  The Federal Reserve Board and the FDIC haveadopted risk based capital adequacy guidelines pursuant to which they assessthe adequacy of capital in examining and supervising banks and bank holdingcompanies and in analyzing bank regulatory applications.  Risk-based capital requirements determine theadequacy of capital based on the risk inherent in various classes of assets andoff-balance sheet items.

State member banks are expectedto meet a minimum ratio of total qualifying capital (the sum of core capital(Tier 1) and supplementary capital (Tier 2)) to risk weighted assets of8%.  At least half of this amount (4%)should be in the form of core capital. These requirements apply to the Bank and will apply to the Company (abank holding company) once its total assets equal $150,000,000 or more, itengages in certain highly leveraged activities or it has publicly held debtsecurities.

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Tier 1 Capital generally consistsof the sum of common stockholders’ equity and perpetual preferred stock(subject in the case of the latter to limitations on the kind and amount ofsuch stock which may be included as Tier 1 Capital), less goodwill, withoutadjustment for changes in the market value of securities classified as “availablefor sale” in accordance with FAS 115. Tier 2 Capital consists of the following: hybrid capital instruments;perpetual preferred stock which is not otherwise eligible to be included as Tier1 Capital; term subordinated debt and intermediate-term preferred stock; and,subject to limitations, general allowances for loan losses.  Assets are adjusted under the risk-basedguidelines to take into account different risk characteristics, with the categoriesranging from 0% (requiring no risk-based capital) for assets such as cash, to100% for the bulk of assets which are typically held by a bank holding company,including certain multi-family residential and commercial real estate loans,commercial business loans and consumer loans. Residential first mortgage loans on one to four family residential realestate and certain seasoned multi-family residential real estate loans, whichare not 90 days or more past-due or non-performing and which have been made inaccordance with prudent underwriting standards are assigned a 50% level in therisk-weighing system, as are certain privately-issued mortgage-backedsecurities representing indirect ownership of such loans.  Off-balance sheet items also are adjusted totake into account certain risk characteristics.

In addition to the risk-basedcapital requirements, the Federal Reserve Board has established a minimum 3.0%Leverage Capital Ratio (Tier 1 Capital to total adjusted assets) requirementfor the most highly-rated banks, with an additional cushion of at least 100 to200 basis points for all other banks, which effectively increases the minimumLeverage Capital Ratio for such other banks to 4.0% - 5.0% or more.  The highest-rated banks are those that arenot anticipating or experiencing significant growth and have well diversifiedrisk, including no undue interest rate risk exposure, excellent asset quality,high liquidity, good earnings and, in general, those which are considered astrong banking organization.  A bankhaving less than the minimum Leverage Capital Ratio requirement shall, within60 days of the date as of which it fails to comply with such requirement,submit a reasonable plan describing the means and timing by which the bankshall achieve its minimum Leverage Capital Ratio requirement.  A bank which fails to file such plan isdeemed to be operating in an unsafe and unsound manner, and could subject thebank to a cease-and-desist order. Any insured depository institution with aLeverage Capital Ratio that is less than 2.0% is deemed to be operating in anunsafe or unsound condition pursuant to Section 8(a) of the Federal DepositInsurance Act (the “FDIA”) and is subject to potential termination of depositinsurance.  However, such an institution willnot be subject to an enforcement proceeding solely on account of its capitalratios, if it has entered into and is in compliance with a written agreement toincrease its Leverage Capital Ratio and to take such other action as may benecessary for the institution to be operated in a safe and sound manner.  The capital regulations also provide, amongother things, for the issuance of a capital directive, which is a final orderissued to a bank that fails to maintain minimum capital or to restore its capitalto the minimum capital requirement within a specified time period.  Such directive is enforceable in the samemanner as a final cease-and-desist order.

*Prompt Corrective Action.*  UnderSection 38 of the FDIA, each federal banking agency is required to implement asystem of prompt corrective action for institutions that it regulates.  The federal banking agencies have promulgatedsubstantially similar regulations to implement the system of prompt correctiveaction established by Section 38 of the FDIA. Under the regulations, a bank shall be deemed to be: (i) “wellcapitalized” if it has a Total Risk Based Capital Ratio of 10.0% or more, aTier 1 Risk Based Capital Ratio of 6.0% or more, a Leverage Capital Ratio of5.0% or more and is not subject to any written capital order or directive; (ii)“adequately capitalized” if it has a Total Risk Based Capital Ratio of 8.0% ormore, a Tier 1 Risk Based Capital Ratio of 4.0% or more and a Tier 1 LeverageCapital Ratio of 4.0% or more (3.0% under certain circumstances) and does notmeet the definition of “well capitalized;” (iii) “undercapitalized” if it has aTotal Risk Based Capital Ratio that is less than 8.0%, a Tier 1 Risk basedCapital Ratio that is less than 4.0% or a Leverage Capital Ratio that is lessthan 4.0% (3.0% under certain circumstances); (iv) “significantlyundercapitalized” if it has a Total Risk Based Capital Ratio that is less than6.0%, a Tier 1 Risk Based Capital Ratio that is less than 3.0% or a LeverageCapital Ratio that is less than 3.0%; and (v) “critically undercapitalized” ifit has a ratio of tangible equity to total assets that is equal to or less than2.0%.

An institution generally mustfile a written capital restoration plan which meets specified requirements withan appropriate federal banking agency within 45 days of the date theinstitution receives notice or is deemed to have notice that it isundercapitalized, significantly undercapitalized or criticallyundercapitalized.  A federal bankingagency must provide the institution with written notice of approval ordisapproval within 60 days after receiving a capital restoration plan, subjectto extensions by the applicable agency.

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An institution that is requiredto submit a capital restoration plan must concurrently submit a performanceguaranty by each company that controls the institution.  Such guaranty shall be limited to the lesserof (i) an amount equal to 5.0% of the institution’s total assets at the timethe institution was notified or deemed to have notice that it was undercapitalizedor (ii) the amount necessary at such time to restore the relevant capitalmeasures of the institution to the levels required for the institution to beclassified as adequately capitalized. Such a guaranty shall expire after the federal banking agency notifiesthe institution that it has remained adequately capitalized for each of fourconsecutive calendar quarters.  Aninstitution which fails to submit a written capital restoration plan within therequisite period, including any required performance guaranty, or fails in anymaterial respect to implement a capital restoration plan, shall be subject tothe restrictions in Section 38 of the FDIA which are applicable tosignificantly undercapitalized institutions.

A “critically undercapitalizedinstitution” is to be placed in conservatorship or receivership within 90 daysunless the FDIC formally determines that forbearance from such action wouldbetter protect the deposit insurance fund. Unless the FDIC or other appropriate federal banking regulatory agencymakes specific further findings and certifies that the institution is viableand is not expected to fail, an institution that remains criticallyundercapitalized on average during the fourth calendar quarter after the dateit becomes critically undercapitalized must be placed in receivership.  The general rule is that the FDIC will beappointed as receiver within 90 days after a bank becomes criticallyundercapitalized unless extremely good cause is shown and the federalregulators agree to an extension.  Ingeneral, good cause is defined as capital that has been raised and isimminently available for infusion into the Bank except for certain technicalrequirements that may delay the infusion for a period of time beyond the 90 daytime period.

Immediately upon becomingundercapitalized, an institution shall become subject to the provisions ofSection 38 of the FDIA, which (i) restrict payment of capital distributions andmanagement fees; (ii) require that the appropriate federal banking agency monitorthe condition of the institution and its efforts to restore its capital; (iii)require submission of a capital restoration plan; (iv) restrict the growth ofthe institution’s assets; and (v) require prior approval of certain expansionproposals.  The appropriate federalbanking agency for an undercapitalized institution also may take any number ofdiscretionary supervisory actions if the agency determines that any of theseactions is necessary to resolve the problems of the institution at the leastpossible long-term cost to the deposit insurance fund, subject in certain casesto specified procedures.  Thesediscretionary supervisory actions include: requiring the institution to raiseadditional capital; restricting transactions with affiliates; requiringdivestiture of the institution or the sale of the institution to a willingpurchaser; and any other supervisory action that the agency deemsappropriate.  These and additionalmandatory and permissive supervisory actions may be taken with respect to significantlyundercapitalized and critically undercapitalized institutions.

Additionally, under Section11(c)(5) of the FDIA, a conservator or receiver may be appointed for aninstitution where:  (i) an institution’sobligations exceed its assets;  (ii)there is substantial dissipation of the institution’s assets or earnings as aresult of any violation of law or any unsafe or unsound practice;  (iii) the institution is in an unsafe orunsound condition;  (iv) there is awillful violation of a cease-and-desist order; (v) the institution is unable to pay its obligations in the ordinarycourse of business;  (vi) losses orthreatened losses deplete all or substantially all of an institution’s capital,and there is no reasonable prospect of becoming “adequately capitalized”without assistance;  (vii) there is anyviolation of law or unsafe or unsound practice or condition that is likely tocause insolvency or substantial dissipation of assets or earnings, weaken theinstitution’s condition, or otherwise seriously prejudice the interests ofdepositors or the insurance fund;  (viii)an institution ceases to be insured; (ix) the institution is undercapitalized and has no reasonable prospectthat it will become adequately capitalized, fails to become adequately capitalizedwhen required to do so, or fails to submit or materially implement a capitalrestoration plan; or (x) the institution is critically undercapitalized orotherwise has substantially insufficient capital.

*Regulatory EnforcementAuthority*.  Federal banking law grants substantialenforcement powers to federal banking regulators.  This enforcement authority includes, amongother things, the ability to assess civil money penalties, to issuecease-and-desist or removal orders and to initiate injunctive actions againstbanking organizations and institution-affiliated parties.  In general, these enforcement actions may beinitiated for violations of laws and regulations and unsafe or unsoundpractices.  Other actions or inactionsmay provide the basis for enforcement action, including misleading or untimelyreports filed with regulatory authorities.

9

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*Deposit Insurance Premiums.*  Pursuantto deposit insurance reform legislation, in December 2006 the FDIC adopted anew risk based assessment system for determining deposit insurance premiums.Under the new requirements, four risk categories (I-IV), each subject todifferent premium rates, are established, based upon an institution’s status aswell capitalized, adequately capitalized or undercapitalized, and the institution’ssupervisory rating.  Under the new rules,all insured depository institutions will pay deposit insurance premiums,currently ranging between 5 and 7 basis points on an institution’s assessmentbase for institution’s in risk category I (well capitalized institutionsperceived as posing the least risk to the insurance fund), and 10, 28 and 40basis points for institutions in risk categories II, III and IV.  The levels of rates are subject to periodicadjustment by the FDIC.

**ITEM 2.  Description of Property.**

The main office of the Bank andthe executive offices of the Bank and the Company are located at 1804 WestStreet, Annapolis, Maryland, in a brick and masonry structure. The Companyleases 8,100 square feet in the building under a five-year lease, whichcommenced in April 2000. Rent expense was $196,842 and $192,017 for the yearsended December 31, 2006 and 2005, respectively.   The Company has exercised the first of threefive-year renewal options.

The second office of the Bank islocated at 4451 Parliament Place, Lanham, Maryland in a masonry structure. TheBank leases 2,100 square feet in the building under a ten-year lease (with anexit option at the end of five years) which commenced in June 2004. Rentexpense was $31,317 and $29,274 for the years ended December 31, 2006 and 2005,respectively.

The third office of the Bank islocated at 910 Cromwell Park Drive, Glen Burnie, Maryland in a masonrystructure. The Bank leases 2,600 square feet in the building under a five-yearlease (with one five-year renewal option) which commenced in June 2006.  Rent expense was $32,833 for the partial yearended December 31, 2006.

The fourth office of the Bank islocated at 6230 Old Dobbin Lane, Columbia, Maryland in a masonry structure. TheBank leases 2,400 square feet in the building under a ten-year lease (with onefive-year renewal option) which commenced in August 2006.  Rent expense was $20,233 for the partial yearended December 31, 2006.

The fifth office of the Bank willbe located at 485 Ritchie Highway, Severna Park, Maryland in a masonrystructure. The Bank will lease approximately 1,500 square feet in the buildingunder a five-year lease (with two five-year renewal options) which is expectedto commence in the second quarter of 2007.

Management believes adequateinsurance coverage is in force on all of its properties.

**ITEM 3.  Legal Proceedings.**

In the ordinary course of itsbusiness, the Company may become involved in routine legal proceedings.  At December 31, 2006, there were no pending,or to the knowledge of the Company, threatened legal proceedings.

**ITEM 4.  Submission of Matters to a Vote of SecurityHolders.**

No matters were submitted to avote of security holders during the fourth quarter of the year ended December31, 2006.

**PART II**

**ITEM 5.  Market for Common Equity and RelatedStockholder Matters.**

*(a) Market for Common Stock andDividends.*****The information regarding the market for theCompany’s Common Stock, the number of holders of the common stock and dividendhistory required under Item 5(a) is hereby incorporated herein by referencefrom the material under the caption “Market for Common Stock and Dividends” onpage 15 of the Company’s AnnualReport for the fiscal year ended December 31, 2006.  See Item 11 of this report for EquityCompensation Plan Information.

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*Recent Sales of Unregistered Shares. * None.

*(b) Use of Proceeds:* Notapplicable

(c) *Issuer Repurchases of Securities**during theFourth Quarter of 2006.*  None.

**ITEM 6. Management’s Discussion and Analysis.**

The information required by this item is incorporatedby reference to the material appearing under the caption “Management Discussionand Analysis” appearing at pages 2 to 15 of the Company’s Annual Report toShareholders for the year ended December 31, 2006.

**ITEM 7. Financial Statements.**

The information required by this item is incorporatedby reference to the Consolidated Financial****Statementsappearing at pages 16 to 39 of the****Company’sAnnual Report to Shareholders for the year ended December 31, 2006.

**ITEM 8. Changes in and Disagreements with Accountants on Accounting andFinancial Disclosure.**

None.

**ITEM 8A.  Controls and Procedures**

The Company’s management, under the supervision andwith the participation of the Chief Executive Officer and Chief FinancialOfficer, evaluated, as of the last day of the period covered by this report,the effectiveness of the design and operation of the Company’s disclosurecontrols and procedures, as defined in Rule 15d-15 under the SecuritiesExchange Act of 1934. Based on that evaluation, the Chief Executive Officer andChief Financial Officer concluded that the Company’s disclosure controls andprocedures were effective. There were no changes in the Bank’s internal controlover financial reporting (as defined in Rule 13a-15 under the Securities Act of1934) during the quarter ended December 31, 2006 that has materially affected,or is reasonably likely to materially affect, the Bank’s internal control overfinancial reporting.

**ITEM 8B.  Other Information**

None.

**Part III**

**ITEM 9. Directors, Executive Officers, Promoter, Control Persons and CorporateGovernance of Registrant; Compliance with Section 16(a) of the Exchange Act.**

The information required underItem 9 is hereby incorporated herein by reference from the material under thecaption “Election of Directors” contained on pages 4 -12, and under the caption“Compliance with Section 16(a) of the Securities Exchange Act of 1934” on page13, of the Company’s Proxy Statement for the Annual Meeting of Stockholders tobe held on April 18, 2007.

*Code of Ethics.*  The Company has adopted a Code of Ethics thatapplies to the President/Chief Executive Officer and Executive VicePresident/Chief Financial Officer.  TheCompany will provide a copy of the Code of Ethics without charge upon writtenrequest directed to Candace M. Springmann, Corporate Secretary, CommerceFirstBancorp, Inc, 1804 West Street, Annapolis, Maryland 21401.

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** **

**ITEM 10. Executive Compensation.**

Theinformation required by Item 10 is hereby incorporated herein by reference fromthe material under the caption “Election of Directors - Executive Compensation,”contained at pages 10-11 of the of theCompany’s Proxy Statement for the Annual Meeting of Stockholders to be held on April18, 2007.

**ITEM 11. Security Ownership of Certain BeneficialOwners and Management and Related Stockholder Matters.**

*Securities Authorized forIssuance under Equity Compensation Plans*The following table sets forth informationregarding outstanding options and other rights to purchase common stock underthe Company’s compensation plans.

**EquityCompensation Plan Information**

** **
| **Plan category**                                      | ** ** | **Number of securities to be issued   upon exercise of outstanding   options, warrants and rights** | ** ** | **Weighted average exercise price of   outstanding options, warrants and   rights** | ** ** | **Number of securities   remaining available for   future issuance under equity   compensation plans   (excluding securities   reflected in column (a)** | ** ** |
|-------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                                                        |       | (a)                                                                                                                                                                  |       | (b)                                                                                                                              |       | (c)                                                                                                                                                                                                                                           |       |
| Equity compensation  plans approved by security holders (1) |       | 0                                                                                                                                                                    |       | N/A                                                                                                                              |       | 0                                                                                                                                                                                                                                             |       |
| Equity compensation  plans not approved by security holders |       | 143,337(1)                                                                                                                                                           |       | $10.00                                                                                                                           |       | 0                                                                                                                                                                                                                                             |       |
| Total                                                       |       | 143,337(1)                                                                                                                                                           |       | $10.00                                                                                                                           |       | 0                                                                                                                                                                                                                                             |       |

 

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(1) Column (a)reflects 123,337 shares of common stock subject to issuance upon the exerciseof warrants issued to organizers of the Company and Bank under the Organizer’sAgreement and related Warrant Plan, as amended and restated, which provided forthe issuance to organizers of warrants to purchase an aggregate of 15% of thenumber of shares sold in the Company’s initial registered offering of shares ofits common stock. The warrants are fully vested, and have a term ending inAugust 2010. The warrants are subject to call by the Company upon theoccurrence of certain events, and are subject to mandatory exercise orforfeiture upon certain regulatory events. Column (a) also includes options topurchase 20,000 shares of common stock at an exercise price of $10.00 per shareissuable to certain officers of the Company under the Company’s 2004Non-qualified Stock Option Plan. No additional options may be issued under theNon-qualified Stock Option Plan.

 

Theother information required by Item 11 is hereby incorporated herein byreference from the material under the caption “Voting Securities and PrincipalShareholders” contained at page 3 of the ofthe Company’s Proxy Statement for the Annual Meeting of Stockholders to be heldon April 18, 2007.

**ITEM 12. Certain Relationships and RelatedTransactions, and Director Independence.**

Theinformation required by Item 12 is hereby incorporated herein by reference fromthe material under the caption “Election of Directors” contained at pages 4-12of the of the Company’s Proxy Statement forthe Annual Meeting of Stockholders to be held on April 18, 2007.

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**ITEM 13. Exhibits**
| Exhibit No. |   | Description of Exhibits                                             |   |   |
|-------------|--------|---------------------------------------------------------------------|--------|--------|
|        |   |                                                                |   |   |
| 3(a)        |   | Certificate of Incorporation of the Company, as  amended (1)        |
| 3(b)        |   | Bylaws of the Company (1)                                           |
| 10(a)       |   | Employment Agreement between Richard J. Morgan and  the Company (2) |
| 10(b)       |   | Employment Agreement between Lamont Thomas and the  Company (3)     |
| 10(c)       |   | 2004 Non Incentive Option Plan (4)                                  |
| 11          |   | Statement Regarding Computation of Per Share Income                 |
| 13          |   | Annual Report to Shareholders                                       |
| 21          |   | Subsidiaries of the Registrant                                      |
|             |        |                                                                     |        |        |  |

 

The sole subsidiary of the Registrant is CommerceFirstBank, a Maryland chartered commercial bank.
| 23    |   | Consent of Trice Geary & Myers, LLC                                               |
|-------|--------|---------------------------------------------------------------------------------------|
| 31(a) |   | Certification of Richard J. Morgan, President and  CEO                                |
| 31(b) |   | Certification of Lamont Thomas, Executive Vice  President and CFO                     |
| 32(a) |   | Certification of Richard J. Morgan, President and  Chief Executive Officer            |
| 32(b) |   | Certification of Lamont Thomas, Executive Vice  President and Chief Financial Officer |
| 99(a) |   | Amended and Restated Organizers Agreement (5)                                         |

 

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| (1) |   | Incorporated by reference to exhibit of the same  number filed with the Company’s Registration Statement on Form SB-2, as  amended, (File No. 333-91817) |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Incorporated by reference to exhibit 10(b) to the  Company’s to Registration Statement on Form SB-2, as amended) (File No.  333-91817)                   |
| (3) |   | Incorporated by reference to exhibits 10(c) to the  Company’s to Registration Statement on Form SB-2, as amended) (File No.  333-91817)                  |
| (4) |   | Incorporated by reference to Exhibit 4 to the  Company’s Registration Statement on Form S-8 (File No. 333-119138).                                       |
| (5) |   | Incorporated by reference to Exhibit 4 to the  Company’s Registration Statement on Form S-8 (File No. 333-119988).                                       |

 

**ITEM 14                Principal Accountant Fees andServices**

Theinformation required by Item 14 is hereby incorporated herein by reference fromthe material under the caption “Independent Registered Public Accounting Firm”contained at page 12 of the of the Company’sProxy Statement for the Annual Meeting of Stockholders to be held onApril 18, 2007.

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**SIGNATURES**

In accordance with Section 13 of the SecuritiesExchange Act of 1934, the registrant caused this report to be signed on itsbehalf by the undersigned, thereunto duly authorized.
|                | COMMERCEFIRST BANCORP, INC           |
|----------------|--------------------------------------|
|           |
| March 12, 2007 | By:                                  | /s/ Richard  J. Morgan |   |
|           | Richard J. Morgan, President and CEO |
|           |

 

In accordance with the Exchange Act, this report hasbeen signed below by the following persons on behalf of the registrant and inthe capacities and on the dates indicated.
|        | ** ** | **Name**                       | ** ** | ** ** | ** ** | **Position**                          | ** ** | ** ** | ** ** | **Date**       |
|--------|------------|--------------------------------|------------|------------|------------|---------------------------------------|------------|------------|------------|----------------|
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ Milton D.  Jernigan II      |       |       |       | Chairman of the Board of Directors    |       |       |       | March 12, 2007 |
|   |       | Milton D. Jernigan II          |       |       |       | of the Company and the Bank           |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ Richard J.  Morgan          |       |       |       | Director, President and CEO of the    |       |       |       | March 12, 2007 |
|   |       | Richard J. Morgan              |       |       |       | Company and the Bank                  |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ Lamont  Thomas              |       |       |       | Director and Executive Vice President |       |       |       | March 12, 2007 |
|   |       | Lamont Thomas                  |       |       |       | of the Company and the Bank           |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ Edward B.  Howlin, Jr.      |       |       |       | Director of the Company and the Bank  |       |       |       | March 12, 2007 |
|   |       | Edward B. Howlin, Jr.          |       |       |       |                                  |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ Charles L.  Hurtt, Jr., CPA |       |       |       | Director of the Company and the Bank  |       |       |       | March 12, 2007 |
|   |       | Charles L. Hurtt, Jr., CPA     |       |       |       |                                  |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ Robert R.  Mitchell         |       |       |       | Director of the Company and the Bank  |       |       |       | March 12, 2007 |
|   |       | Robert R. Mitchell             |       |       |       |                                  |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ John A.  Richardson, Sr.    |       |       |       | Director of the Company and the Bank  |       |       |       | March 12, 2007 |
|   |       | John A. Richardson, Sr.        |       |       |       |                                  |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ George C.  Shenk, Jr.       |       |       |       | Director of the Company and the Bank  |       |       |       | March 12, 2007 |
|   |       | George C. Shenk, Jr.           |       |       |       |                                  |       |       |       |           |
|   |       |                           |       |       |       |                                  |       |       |       |           |
|   |       | s/ Jerome A.  Watts            |       |       |       | Director of the Company and the Bank  |       |       |       | March 12, 2007 |
|   |       | Jerome A. Watts                |       |       |       |                                  |       |       |       |           |

 

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