----

| (Mark      One)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| [      X ] Quarterly Report Pursuant to Section 13 or 15(d) of the      Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
| for      the quarterly period ended June 30, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Or                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
| [      ]Transition Report Pursuant to Section 13 or 15(d) of the      Securities Exchange Act of 1934                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| for      the transition period      from                                                            to                                                |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |
| Commission      File Number 000-50266                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |   |

| New      Mexico                                       |   | 85-0242376                                   |
|-------------------------------------------------------|--------|----------------------------------------------|
| (State      of incorporation)                         |   | (I.R.S.      Employer Identification Number) |
|                                                  |   |                                         |
| 1200      Trinity Drive, Los Alamos, New Mexico 87544 |
| (Address      of principal executive offices)         |
|                                                  |   |                                         |
| (505) 662-5171                                   |
| Telephone      number                                 |

----

| Large      Accelerated Filer  [ ] | Accelerated      Filer  [ X ] |   |
|---------------------------------------------|-----------------------------------------|--------|
| Non-Accelerated      Filer  [ ]   | Smaller      Reporting Company[ ]       |   |

----

| PART      I. FINANCIAL INFORMATION |
|------------------------------------|
|                               |   |
| Item      1.                       | Financial      Statements |
|                               |   |
| Item      2.                       | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations |
|                               |   |
| Item      3.                       | Quantitative      and Qualitative Disclosures About Market Risk |
|                               |   |
| Item      4.                       | Controls      and Procedures |
|                               |   |
| PART      II. OTHER INFORMATION    |
|                               |   |
| Item      1.                       | Legal      Proceedings |
|                               |   |
| Item      1A.                      | Risk      Factors |
|                               |   |
| Item      2.                       | Unregistered      Sales of Equity Securities and Use of Proceeds |
|                               |   |
| Item      3.                       | Defaults      Upon Senior Securities |
|                               |   |
| Item      4.                       | Removed      and Reserved |
|                               |   |
| Item      5.                       | Other      Information |
|                               |   |
| Item      6.                       | Exhibits |
|                               |   |
|                               | SIGNATURES |
|                               |   |
|                               | CERTIFICATIONS |

----

|                                                                                                                                                     |   | June      30, 2010 |      |   | December      31, 2009 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|------------------------|--------|
|                                                                                                                                                     |   | (Unaudited)        |      |   |                   |   |
| ASSETS                                                                                                                                                   |   |               |      |   |                   |   |
| Cash      and due from banks                                                                                                                             |   | $                  | 20,424    |   |                   | $      | 18,761 |   |
| Interest-bearing      deposits with banks                                                                                                                |   |               | 72,591    |   |                   |   | 188,114 |   |
| Federal      funds sold and securities purchased under resellagreements                                                                                  |   |               | 112       |   |                   |   | 620 |   |
|     Cash      and cash equivalents                                                                                                   |   |               | 93,127    |   |                   |   | 207,495 |   |
| Investment      securities available for sale                                                                                                            |   |               | 182,669   |   |                   |   | 136,756 |   |
| Investment      securities held to maturity, at amortized cost (fair value of $11,424 at      June 30, 2010 and $10,808 at  December 31, 2009) |   |               | 11,271    |   |                   |   | 11,436 |   |
| Other      investments                                                                                                                                   |   |               | 9,397     |   |                   |   | 9,568 |   |
| Loans      (net of allowance for loan losses of $29,658 at June 30, 2010 and $24,504      at December 31, 2009)                                          |   |               | 1,158,389 |   |                   |   | 1,215,282 |   |
| Loans      held for sale                                                                                                                                 |   |               | 7,948     |   |                   |   | 9,245 |   |
| Premises      and equipment, net                                                                                                                         |   |               | 31,058    |   |                   |   | 31,949 |   |
| Leased      property under capital leases, net                                                                                                           |   |               | 2,211     |   |                   |   | 2,211 |   |
| Accrued      interest receivable                                                                                                                         |   |               | 7,232     |   |                   |   | 6,840 |   |
| Mortgage      servicing rights, net                                                                                                                      |   |               | 7,044     |   |                   |   | 7,647 |   |
| Other      intangible assets                                                                                                                             |   |               | 594       |   |                   |   | 830 |   |
| Other      real estate owned                                                                                                                             |   |               | 29,513    |   |                   |   | 16,750 |   |
| Prepaid      expenses                                                                                                                                    |   |               | 7,329     |   |                   |   | 8,648 |   |
| Net      deferred tax assets                                                                                                                             |   |               | 7,015     |   |                   |   | 4,979 |   |
| Other      assets                                                                                                                                        |   |               | 8,057     |   |                   |   | 7,105 |   |
|     Total      assets                                                                                                                |   | $                  | 1,562,854 |   |                   | $      | 1,676,741 |   |

----

|                                                                                                                                                                                                                |   | June      30, 2010 |      |   | December      31, 2009 |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|------------------------|--------|
|                                                                                                                                                                                                                |   | (Unaudited)        |      |   |                   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                                                           |   |               |      |   |                   |   |
| Liabilities                                                                                                                                                                                                         |   |               |      |   |                   |   |
|     Deposits:                                                                                                                                                                                   |   |               |      |   |                   |   |
|         Noninterest-bearing                                                                                                                                                 |   | $                  | 85,896    |   |                   | $      | 87,238 |   |
|         Interest-bearing                                                                                                                                                    |   |               | 1,276,540 |   |                   |   | 1,381,207 |   |
|             Total      deposits                                                                                                                         |   |               | 1,362,436 |   |                   |   | 1,468,445 |   |
|     Short-term      borrowings                                                                                                                                                                  |   |               | 1,173     |   |                   |   | 20,000 |   |
|     Long-term      borrowings                                                                                                                                                                   |   |               | 32,300    |   |                   |   | 13,493 |   |
|     Long-term      capital lease obligations                                                                                                                                                    |   |               | 2,211     |   |                   |   | 2,211 |   |
|     Junior      subordinated debt owed to unconsolidated trusts                                                                                                                                 |   |               | 37,116    |   |                   |   | 37,116 |   |
|     Accrued      interest payable                                                                                                                                                               |   |               | 4,644     |   |                   |   | 5,038 |   |
|     Other      liabilities                                                                                                                                                                      |   |               | 4,777     |   |                   |   | 7,536 |   |
|             Total      liabilities                                                                                                                      |   |               | 1,444,657 |   |                   |   | 1,553,839 |   |
|                                                                                                                                                                                                                |   |               |      |   |                   |   |   |   |
| Stock      owned by Employee Stock Ownership Plan (ESOP) participants; 636,585 shares      and 627,030 shares at June 30, 2010 and December 31, 2009, respectively,      at fair value                              |   | $                  | 9,230     |   |                   | $      | 12,541 |   |
| Commitments      and contingencies (Note 13)                                                                                                                                                                        |   |               |      |   |                   |   |   |   |
| Stockholders'      equity                                                                                                                                                                                           |   |               |      |   |                   |   |   |   |
| Preferred      stock, no par, authorized 1,000,000 shares                                                                                                                                                           |   |               |      |   |                   |   |   |   |
|      Series      A, 5% cumulative perpetual, 35,539 shares issued and outstanding at June      30, 2010 and December 31, 2009, $1,000.00 liquidation value, at amortized      cost         |   |               | 33,702    |   |                   |   | 33,597 |   |
|      Series      B, 9% cumulative perpetual, 1,777 shares issued and outstanding at June      30, 2010 and December 31, 2009, $1,000.00 liquidation value, at amortized      cost          |   |               | 2,061     |   |                   |   | 2,077 |   |
|     Common      stock, no par, authorized 20,000,000 shares; issued 6,856,800 shares,      shares outstanding 6,450,339 and 6,440,784 at June 30, 2010 and December      31, 2009, respectively |   |               | 6,836     |   |                   |   | 6,836 |   |
|     Additional      paid-in capital                                                                                                                                                             |   |               | 1,827     |   |                   |   | 1,869 |   |
|     Retained      earnings                                                                                                                                                                      |   |               | 75,148    |   |                   |   | 77,054 |   |
|     Accumulated      other comprehensive gain                                                                                                                                                   |   |               | 359       |   |                   |   | 142 |   |
|             Total      stockholders' equity before treasury stock                                                                                       |   |               | 119,933   |   |                   |   | 121,575 |   |
| Treasury      stock, at cost, 406,461 shares and 416,016 shares at June 30, 2010 and      December 31, 2009, respectively                                                                                           |   |               | (10,966   | )      |                   |   | (11,214 | ) |
|             Total      stockholders' equity                                                                                                             |   |               | 108,967   |   |                   |   | 110,361 |   |
|             Total      liabilities and stockholders' equity                                                                                             |   | $                  | 1,562,854 |   |                   | $      | 1,676,741 |   |

----

|                                                        |   | Three      Months EndedJune      30, |   |   | Six      Months EndedJune      30, |   |
|-------------------------------------------------------------|--------|--------------------------------------|--------|--------|------------------------------------|--------|
|                                                        |   | 2010                                 |   |   | 2009                               |   |   | 2010 |   |   | 2009 |   |
| Interest      income:                                       |   |                                 |   |   |                               |   |   |   |   |   |   |   |
| Loans,      including fees                                  |   | $                                    | 16,638 |   |                               | $      | 18,998 |   |   | $ | 33,910 |   |   | $ | 37,990 |   |
| Investment      securities:                                 |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                     |   |                                 | 776    |   |                               |   | 946 |   |   |   | 1,409 |   |   |   | 1,144 |   |
| Nontaxable                                                  |   |                                 | 299    |   |                               |   | 263 |   |   |   | 597 |   |   |   | 480 |   |
| Federal      funds sold                                     |   |                                 | -      |   |                               |   | - |   |   |   | - |   |   |   | 1 |   |
| Other      interest-bearing deposits                        |   |                                 | 75     |   |                               |   | 77 |   |   |   | 180 |   |   |   | 86 |   |
| Investment      in unconsolidated trusts                    |   |                                 | 21     |   |                               |   | 21 |   |   |   | 41 |   |   |   | 42 |   |
| Total      interest income                                  |   |                                 | 17,809 |   |                               |   | 20,305 |   |   |   | 36,137 |   |   |   | 39,743 |   |
| Interest      expense:                                      |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                    |   |                                 | 3,605  |   |                               |   | 5,017 |   |   |   | 7,568 |   |   |   | 9,933 |   |
| Short-term      borrowings                                  |   |                                 | 17     |   |                               |   | 189 |   |   |   | 233 |   |   |   | 252 |   |
| Long-term      borrowings                                   |   |                                 | 253    |   |                               |   | 213 |   |   |   | 381 |   |   |   | 524 |   |
| Long-term      capital lease obligations                    |   |                                 | 67     |   |                               |   | 67 |   |   |   | 134 |   |   |   | 134 |   |
| Junior      subordinated debt owed to unconsolidated trusts |   |                                 | 684    |   |                               |   | 697 |   |   |   | 1,367 |   |   |   | 1,406 |   |
| Total      interest expense                                 |   |                                 | 4,626  |   |                               |   | 6,183 |   |   |   | 9,683 |   |   |   | 12,249 |   |
| Net      interest income                                    |   |                                 | 13,183 |   |                               |   | 14,122 |   |   |   | 26,454 |   |   |   | 27,494 |   |
| Provision      for loan losses                              |   |                                 | 11,101 |   |                               |   | 12,632 |   |   |   | 15,358 |   |   |   | 16,793 |   |
| Net      interest income after provision for loan losses    |   |                                 | 2,082  |   |                               |   | 1,490 |   |   |   | 11,096 |   |   |   | 10,701 |   |
| Other      income:                                          |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage      loan servicing fees                           |   |                                 | 654    |   |                               |   | 435 |   |   |   | 1,300 |   |   |   | 1,222 |   |
| Trust      fees                                             |   |                                 | 456    |   |                               |   | 329 |   |   |   | 811 |   |   |   | 705 |   |
| Loan      and other fees                                    |   |                                 | 804    |   |                               |   | 706 |   |   |   | 1,470 |   |   |   | 1,319 |   |
| Service      charges on deposits                            |   |                                 | 433    |   |                               |   | 453 |   |   |   | 841 |   |   |   | 860 |   |
| Gain      on sale of loans                                  |   |                                 | 758    |   |                               |   | 2,426 |   |   |   | 1,478 |   |   |   | 5,495 |   |
| Gain      on sale of securities                             |   |                                 | -      |   |                               |   | 36 |   |   |   | 47 |   |   |   | 734 |   |
| Title      insurance premiums                               |   |                                 | 274    |   |                               |   | 424 |   |   |   | 462 |   |   |   | 865 |   |
| Other      operating income                                 |   |                                 | 85     |   |                               |   | 152 |   |   |   | 111 |   |   |   | 255 |   |
| Total      other income                                     |   |                                 | 3,464  |   |                               |   | 4,961 |   |   |   | 6,520 |   |   |   | 11,455 |   |

----

|                                                         |   | Three      Months EndedJune      30, |   |   | Six      Months EndedJune      30, |   |
|--------------------------------------------------------------|--------|--------------------------------------|--------|--------|------------------------------------|--------|
|                                                         |   | 2010                                 |   |   | 2009                               |   |   | 2010 |   |   | 2009 |   |
| Other      expenses:                                         |   |                                 |   |   |                               |   |   |   |   |   |   |   |
| Salaries      and employee benefits                          |   | $                                    | 5,091  |   |                               | $      | 4,658 |   |   | $ | 10,169 |   |   | $ | 9,702 |   |
| Occupancy                                                    |   |                                 | 1,028  |   |                               |   | 789 |   |   |   | 2,005 |   |   |   | 1,613 |   |
| Data      processing                                         |   |                                 | 709    |   |                               |   | 693 |   |   |   | 1,433 |   |   |   | 1,324 |   |
| Marketing                                                    |   |                                 | 375    |   |                               |   | 440 |   |   |   | 731 |   |   |   | 888 |   |
| Amortization      and valuation of mortgage servicing rights |   |                                 | 974    |   |                               |   | (99 | ) |   |   | 1,283 |   |   |   | 887 |   |
| Amortization      and valuation of other intangible assets   |   |                                 | 97     |   |                               |   | 10 |   |   |   | 222 |   |   |   | 133 |   |
| Supplies                                                     |   |                                 | 118    |   |                               |   | 166 |   |   |   | 209 |   |   |   | 352 |   |
| Loss      on sale of other real estate owned                 |   |                                 | 1,053  |   |                               |   | 313 |   |   |   | 1,485 |   |   |   | 531 |   |
| Postage                                                      |   |                                 | 161    |   |                               |   | 117 |   |   |   | 322 |   |   |   | 284 |   |
| Bankcard      and ATM network fees                           |   |                                 | 335    |   |                               |   | 324 |   |   |   | 498 |   |   |   | 654 |   |
| Legal,      professional and accounting fees                 |   |                                 | 573    |   |                               |   | 613 |   |   |   | 1,326 |   |   |   | 981 |   |
| FDIC      insurance premiums                                 |   |                                 | 934    |   |                               |   | 937 |   |   |   | 1,832 |   |   |   | 1,184 |   |
| Collection      expenses                                     |   |                                 | 448    |   |                               |   | 169 |   |   |   | 828 |   |   |   | 291 |   |
| Other                                                        |   |                                 | 781    |   |                               |   | 517 |   |   |   | 1,319 |   |   |   | 1,312 |   |
| Total      other expense                                     |   |                                 | 12,677 |   |                               |   | 9,647 |   |   |   | 23,662 |   |   |   | 20,136 |   |
| (Loss)      Income before income taxes                       |   |                                 | (7,131 | )      |                               |   | (3,196 | ) |   |   | (6,046 | ) |   |   | 2,020 |   |
| (Benefit)      provision for income taxes                    |   |                                 | (2,537 | )      |                               |   | (1,392 | ) |   |   | (1,888 | ) |   |   | 593 |   |
| Net      (loss) income                                       |   | $                                    | (4,594 | )      |                               | $      | (1,804 | ) |   | $ | (4,158 | ) |   | $ | 1,427 |   |
| Dividends      and discount accretion on preferred shares    |   |                                 | 528    |   |                               |   | 529 |   |   |   | 1,057 |   |   |   | 552 |   |
| Net      (loss) income available to common shareholders      |   | $                                    | (5,122 | )      |                               | $      | (2,333 | ) |   | $ | (5,215 | ) |   | $ | 875 |   |
| Basic      (loss) earnings per common share                  |   | $                                    | (0.80  | )      |                               | $      | (0.36 | ) |   | $ | (0.81 | ) |   | $ | 0.14 |   |
| Diluted      (loss) earnings per common share                |   | $                                    | (0.80  | )      |                               | $      | (0.36 | ) |   | $ | (0.81 | ) |   | $ | 0.14 |   |

----

|                                                                                             |   | Six      Months Ended June 30, |    |
|--------------------------------------------------------------------------------------------------|--------|--------------------------------|---------|
|                                                                                             |   | 2010                           |    |   | 2009 |   |
| Cash      Flows From Operating Activities                                                        |   |                           |    |   |
| Net      (loss) income                                                                           |   | $                              | (4,158  | ) |   | $ | 1,427 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities:      |   |
| Depreciation      and amortization                                                               |   |                           | 1,551   |   |   |   | 1,244 |   |
| Net      amortization of:                                                                        |   |                           |    |   |   |   |   |   |
| Mortgage      servicing rights                                                                   |   |                           | 924     |   |   |   | 1,289 |   |
| Other      intangible assets                                                                     |   |                           | 236     |   |   |   | 133 |   |
| Premium      and discounts on investment securities, net                                         |   |                           | 308     |   |   |   | 10 |   |
| Junior      subordinated debt owed to unconsolidated trusts issuance    costs                    |   |                           | 7       |   |   |   | 7 |   |
| Provision      for loan losses                                                                   |   |                           | 15,358  |   |   |   | 16,793 |   |
| Change      in mortgage servicing rights valuation allowance                                     |   |                           | 359     |   |   |   | (402 | ) |
| Loss      on disposal of premises and equipment                                                  |   |                           | 9       |   |   |   | - |   |
| (Gain)      on sale of investment securities                                                     |   |                           | (47     | ) |   |   | (734 | ) |
| Federal      Home Loan Bank (FHLB) stock dividends received                                      |   |                           | (5      | ) |   |   | (3 | ) |
| Loss      on venture capital investments                                                         |   |                           | 98      |   |   |   | 274 |   |
| Gain      on sale of loans                                                                       |   |                           | (1,478  | ) |   |   | (5,495 | ) |
| Loss      on disposal of other real estate owned                                                 |   |                           | 424     |   |   |   | 270 |   |
| Write-down      of value of other real estate owned                                              |   |                           | 1,079   |   |   |   | 270 |   |
| (Increase)      in other assets                                                                  |   |                           | (2,167  | ) |   |   | (3,603 | ) |
| (Decrease)      increase in other liabilities                                                    |   |                           | (1,414  | ) |   |   | 609 |   |
| Stock      options and stock appreciation rights expenses                                        |   |                           | 72      |   |   |   | 73 |   |
| Tax      benefit recognized for exercise of stock options                                        |   |                           | -       |   |   |   | (10 | ) |
| Net      cash provided by operating activities before originations and gross sales      of loans |   |                           | 11,156  |   |   |   | 12,152 |   |
| Gross      sales of loans held for sale                                                          |   |                           | 67,237  |   |   |   | 262,068 |   |
| Origination      of loans held for sale                                                          |   |                           | (65,142 | ) |   |   | (263,193 | ) |
| Net      cash provided by operating activities                                                   |   |                           | 13,251  |   |   |   | 11,027 |   |

----

|                                                                                         |   | Six      Months Ended June 30, |     |
|----------------------------------------------------------------------------------------------|--------|--------------------------------|----------|
|                                                                                         |   | 2010                           |     |   | 2009 |   |
| Cash      Flows From Investing Activities                                                    |   |                           |     |   |
| Proceeds      from maturities and paydowns of investment securities, available for      sale |   | $                              | 50,146   |   |   | $ | 3,109 |   |
| Proceeds      from maturities and paydowns of investment securities, held to      maturity   |   |                           | 165      |   |   |   | 122 |   |
| Proceeds      from maturities and paydowns of investment securities,    other                |   |                           | 171      |   |   |   | - |   |
| Proceeds      from sale of investment securities, available for sale                         |   |                           | 3,422    |   |   |   | 42,910 |   |
| Purchase      of investment securities available for sale                                    |   |                           | (99,426  | ) |   |   | (52,385 | ) |
| Purchase      of investment securities other                                                 |   |                           | (93      | ) |   |   | (2,466 | ) |
| Proceeds      from sale of other real estate owned                                           |   |                           | 5,063    |   |   |   | 3,907 |   |
| Loans      funded, net of repayments                                                         |   |                           | 22,206   |   |   |   | (43,882 | ) |
| Purchases      of loans                                                                      |   |                           | -        |   |   |   | (1,101 | ) |
| Purchases      of premises and equipment                                                     |   |                           | (669     | ) |   |   | (6,131 | ) |
| Net      cash (used in) investing activities                                                 |   |                           | (19,015  | ) |   |   | (55,917 | ) |
| Cash      Flows From Financing Activities                                                    |   |                           |     |   |   |
| Net      (decrease) in demand deposits, NOW accounts and savings      accounts               |   |                           | (99,001  | ) |   |   | (25,621 | ) |
| Net      (decrease) in time deposits                                                         |   |                           | (7,008   | ) |   |   | 107,643 |   |
| Proceeds      from issuances of borrowings                                                   |   |                           | 20,000   |   |   |   | 30,000 |   |
| Repayment      of borrowings                                                                 |   |                           | (20,020  | ) |   |   | (19 | ) |
| Purchase      of treasury stock                                                              |   |                           | -        |   |   |   | (473 | ) |
| Issuance      of common stock                                                                |   |                           | 134      |   |   |   | 290 |   |
| Issuance      of preferred stock                                                             |   |                           | -        |   |   |   | 35,539 |   |
| Common      shares dividend payments                                                         |   |                           | (1,739   | ) |   |   | (2,580 | ) |
| Preferred      shares dividend payments                                                      |   |                           | (970     | ) |   |   | (258 | ) |
| Tax      benefit recognized for exercise of stock options                                    |   |                           | -        |   |   |   | 10 |   |
| Net      cash (used in) provided by financing activities                           |   |                           | (108,604 | ) |   |   | 144,531 |   |
| Net      (decrease) increase in cash and cash equivalents                                    |   |                           | (114,368 | ) |   |   | 99,641 |   |
| Cash      and cash equivalents:                                                              |   |                           |     |   |   |   |   |   |
| Beginning      of period                                                                     |   |                           | 207,495  |   |   |   | 25,262 |   |
| End      of period                                                                           |   | $                              | 93,127   |   |   | $ | 124,903 |   |
|                                                                                         |   |                           |     |   |   |   |   |   |
| Supplemental      Disclosures of Cash Flow Information                                       |   |
| Cash      payments for:                                                                      |   |                           |     |   |   |   |   |   |
| Interest                                                                                     |   | $                              | 10,077   |   |   | $ | 12,732 |   |
| Income      taxes                                                                            |   |                           | 72       |   |   |   | 4,623 |   |
| Non-cash      investing and financing activities:                                            |   |
| Transfers      from loans to other real estate owned                                         |   |                           | 19,329   |   |   |   | 9,761 |   |
| Dividends      declared, not yet paid                                                        |   |                           | 242      |   |   |   | 2,824 |   |
| Change      in unrealized gain on investment securities, net of taxes                        |   |                           | 217      |   |   |   | (1,935 | ) |

----

----

|                                                         |   | Three      Months EndedJune      30, |   |   | Six      Months EndedJune      30, |   |
|--------------------------------------------------------------|--------|--------------------------------------|--------|--------|------------------------------------|--------|
|                                                         |   | 2010                                 |   |   | 2009                               |   |   | 2010 |   |   | 2009 |   |
|                                                         |   | (Unaudited;      in thousands)       |   |
| Net      (loss) income                                       |   | $                                    | (4,594 | )      |                               | $      | (1,804 | ) |   | $ | (4,158 | ) |   | $ | 1,427 |   |
| Securities      available for sale:                          |   |                                 |   |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Net      change in unrealized (losses)                       |   |                                 | 711    |   |                               |   | (736 | ) |   |   | 316 |   |   |   | (1,201 | ) |
| Related      income tax expense                              |   |                                 | (220   | )      |                               |   | 286 |   |   |   | (67 | ) |   |   | 548 |   |
| Net      securities gains reclassified into earnings         |   |                                 | -      |   |                               |   | (36 | ) |   |   | (47 | ) |   |   | (734 | ) |
| Related      income tax benefit                              |   |                                 | -      |   |                               |   | 16 |   |   |   | 15 |   |   |   | 215 |   |
| Net      effect on other comprehensive income for the period |   |                                 | 491    |   |                               |   | (470 | ) |   |   | 217 |   |   |   | (1,172 | ) |
| Comprehensive      (loss) income                             |   | $                                    | (4,103 | )      |                               | $      | (2,274 | ) |   | $ | (3,941 | ) |   | $ | 255 |   |

|                                                                           |   | Three      Months EndedJune      30,                            |      |   | Six      Months EndedJune      30, |   |
|--------------------------------------------------------------------------------|--------|-----------------------------------------------------------------|-----------|--------|------------------------------------|--------|
|                                                                           |   | 2010                                                            |      |   | 2009                               |   |   | 2010 |   |   | 2009 |   |
|                                                                           |   | (Unaudited;      in thousands, except share and per share data) |      |
| Net      (loss) income                                                         |   | $                                                               | (4,594    | )      |                               | $      | (1,804 | ) |   | $ | (4,158 | ) |   | $ | 1,427 |   |
| Dividends      and discount accretion on preferred shares                      |   |                                                            | 528       |   |                               |   | 529 |   |   |   | 1,057 |   |   |   | 552 |   |
| Net      (loss) income available to common shareholders                        |   | $                                                               | (5,122    | )      |                               | $      | (2,333 | ) |   | $ | (5,215 | ) |   | $ | 875 |   |
| Weighted      average common shares issued                                     |   |                                                            | 6,856,800 |   |                               |   | 6,856,800 |   |   |   | 6,856,800 |   |   |   | 6,856,800 |   |
| LESS:      Weighted average treasury stock shares                              |   |                                                            | (415,071  | )      |                               |   | (409,720 | ) |   |   | (415,541 | ) |   |   | (408,990 | ) |
| Weighted      average common shares outstanding, net                           |   |                                                            | 6,441,729 |   |                               |   | 6,447,080 |   |   |   | 6,441,259 |   |   |   | 6,447,810 |   |
| Basic      (loss) earnings per common share                                    |   | $                                                               | (0.80     | )      |                               | $      | (0.36 | ) |   | $ | (0.81 | ) |   | $ | 0.14 |   |
| Weighted      average dilutive shares from stock option plan                   |   |                                                            | -         |   |                               |   | - |   |   |   | - |   |   |   | 7,922 |   |
| Weighted      average common shares outstanding including derivative    shares |   |                                                            | 6,441,729 |   |                               |   | 6,447,080 |   |   |   | 6,441,259 |   |   |   | 6,455,732 |   |
| Diluted      (loss) earnings per common share                                  |   | $                                                               | (0.80     | )      |                               | $      | (0.36 | ) |   | $ | (0.81 | ) |   | $ | 0.14 |   |

----

| AVAILABLE      FOR SALE                     |   | Amortized      Cost |    |   | Gross      Unrealized Gains |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |
|---------------------------------------------|--------|---------------------|---------|--------|-----------------------------|--------|--------|------------------------------|--------|--------|-----------------|--------|
|                                        |   | (In      thousands) |    |
| June      30, 2010                          |   |                |    |   |                        |   |   |                         |   |   |            |   |
| U.S.      Government sponsored agencies     |   | $                   | 85,114  |   |                        | $      | 172    |                         |   | $      | (5              | )      |   | $ | 85,281 |   |
| States      and political subdivisions      |   |                | 26,550  |   |                        |   | 529    |                         |   |   | (23             | )      |   |   | 27,056 |   |
| Residential      mortgage-backed securities |   |                | 70,453  |   |                        |   | 885    |                         |   |   | (1,006          | )      |   |   | 70,332 |   |
| Totals                                      |   | $                   | 182,117 |   |                        | $      | 1,586  |                         |   | $      | (1,034          | )      |   | $ | 182,669 |   |
|                                        |   |                |    |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| December      31, 2009                      |   |                |    |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| U.S.      Government sponsored agencies     |   | $                   | 68,502  |   |                        | $      | 23     |                         |   | $      | (143            | )      |   | $ | 68,382 |   |
| States      and political subdivisions      |   |                | 26,112  |   |                        |   | 494    |                         |   |   | (87             | )      |   |   | 26,519 |   |
| Residential      mortgage-backed securities |   |                | 41,906  |   |                        |   | 563    |                         |   |   | (614            | )      |   |   | 41,855 |   |
| Totals                                      |   | $                   | 136,520 |   |                        | $      | 1,080  |                         |   | $      | (844            | )      |   | $ | 136,756 |   |

----

| HELD      TO MATURITY                  |   | Amortized      Cost |   |   | Gross      Unrealized Gains |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |
|----------------------------------------|--------|---------------------|--------|--------|-----------------------------|--------|--------|------------------------------|--------|--------|-----------------|--------|
|                                   |   | (In      thousands) |   |
| June      30, 2010                     |   |                |   |   |                        |   |   |                         |   |   |            |   |
| States      and political subdivisions |   | $                   | 11,271 |   |                        | $      | 420    |                         |   | $      | (267            | )      |   | $ | 11,424 |   |
| Totals                                 |   | $                   | 11,271 |   |                        | $      | 420    |                         |   | $      | (267            | )      |   | $ | 11,424 |   |
|                                   |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| December      31, 2009                 |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| States      and political subdivisions |   | $                   | 11,436 |   |                        | $      | -      |                         |   | $      | (628            | )      |   | $ | 10,808 |   |
| Totals                                 |   | $                   | 11,436 |   |                        | $      | -      |                         |   | $      | (628            | )      |   | $ | 10,808 |   |

| OTHER      INVESTMENTS                                               |   | Amortized      Cost |   |   | Gross      Unrealized Gains |   |   | Gross      Unrealized Losses |   |   | Fair      Value |   |
|----------------------------------------------------------------------|--------|---------------------|--------|--------|-----------------------------|--------|--------|------------------------------|--------|--------|-----------------|--------|
|                                                                 |   | (In      thousands) |   |
| June      30, 2010                                                   |   |                |   |   |                        |   |   |                         |   |   |            |   |
| Non-marketable      equity securities (including FRB and FHLB stock) |   | $                   | 8,281  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 8,281 |   |
| Investment      in unconsolidated trusts                             |   |                | 1,116  |   |                        |   | -      |                         |   |   | -               |   |   |   | 1,116 |   |
| Totals                                                               |   | $                   | 9,397  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 9,397 |   |
|                                                                 |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| December      31, 2009                                               |   |                |   |   |                        |   |   |                         |   |   |            |   |   |   |   |   |
| Non-marketable      equity securities (including FRB and FHLB stock) |   | $                   | 8,452  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 8,452 |   |
| Investment      in unconsolidated trusts                             |   |                | 1,116  |   |                        |   | -      |                         |   |   | -               |   |   |   | 1,116 |   |
| Totals                                                               |   | $                   | 9,568  |   |                        | $      | -      |                         |   | $      | -               |   |   | $ | 9,568 |   |

|                       |   | Three      Months Ended June 30, |   |   | Six      Months Ended June 30, |   |
|----------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                       |   | 2010                             |   |   | 2009                           |   |   | 2010 |   |   | 2009 |   |
|                       |   | (In      thousands)              |   |
| Gross      realized gains  |   | $                                | -      |   |                           | $      | 36 |   |   | $ | 47 |   |   | $ | 734 |   |
| Gross      realized losses |   |                             | -      |   |                           |   | - |   |   |   | - |   |   |   | - |   |
| Net      gains             |   | $                                | -      |   |                           | $      | 36 |   |   | $ | 47 |   |   | $ | 734 |   |

----

|                                        |   | Less      than 12 Months |   |   | 12      Months or Longer |   |   | Total           |   |
|---------------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-----------------|--------|
| AVAILABLE      FOR SALE                     |   | Fair      Value          |   |   | Unrealized      Losses   |   |   | Fair      Value |   |   | Unrealized      Losses |   |   | Fair      Value |   |   | Unrealized      Losses |   |
|                                        |   | (In      thousands)      |   |
| June      30, 2010                          |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government sponsored agencies     |   | $                        | 10,076 |   |                     | $      | (5     | )               |   | $ | - |   |   | $ | - |   |   | $ | 10,076 |   |   | $ | (5 | ) |
| States      and political subdivisions      |   |                     | 4,788  |   |                     |   | (2     | )               |   |   | 1,979 |   |   |   | (21 | ) |   |   | 6,767 |   |   |   | (23 | ) |
| Residential      mortgage-backed securities |   |                     | 22,756 |   |                     |   | (859   | )               |   |   | 5,031 |   |   |   | (147 | ) |   |   | 27,787 |   |   |   | (1,006 | ) |
| Totals                                      |   | $                        | 37,620 |   |                     | $      | (866   | )               |   | $ | 7,010 |   |   | $ | (168 | ) |   | $ | 44,630 |   |   | $ | (1,034 | ) |
|                                        |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2009                      |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government sponsored agencies     |   | $                        | 25,855 |   |                     | $      | (143   | )               |   | $ | - |   |   | $ | - |   |   | $ | 25,855 |   |   | $ | (143 | ) |
| States      and political subdivisions      |   |                     | 4,540  |   |                     |   | (87    | )               |   |   | - |   |   |   | - |   |   |   | 4,540 |   |   |   | (87 | ) |
| Residential      mortgage-backed securities |   |                     | 20,579 |   |                     |   | (527   | )               |   |   | 1,481 |   |   |   | (87 | ) |   |   | 22,060 |   |   |   | (614 | ) |
| Totals                                      |   | $                        | 50,974 |   |                     | $      | (757   | )               |   | $ | 1,481 |   |   | $ | (87 | ) |   | $ | 52,455 |   |   | $ | (844 | ) |

|                                   |   | Less      than 12 Months |   |   | 12      Months or Longer |   |   | Total           |   |
|----------------------------------------|--------|--------------------------|--------|--------|--------------------------|--------|--------|-----------------|--------|
| HELD      TO MATURITY                  |   | Fair      Value          |   |   | Unrealized      Losses   |   |   | Fair      Value |   |   | Unrealized      Losses |   |   | Fair      Value |   |   | Unrealized      Losses |   |
|                                   |   | (In      thousands)      |   |
| June      30, 2010                     |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |
| States      and political subdivisions |   | $                        | -      |   |                     | $      | -      |            |   | $ | 1,416 |   |   | $ | (267 | ) |   | $ | 1,416 |   |   | $ | (267 | ) |
| Totals                                 |   | $                        | -      |   |                     | $      | -      |            |   | $ | 1,416 |   |   | $ | (267 | ) |   | $ | 1,416 |   |   | $ | (267 | ) |
|                                   |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2009                 |   |                     |   |   |                     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| States      and political subdivisions |   | $                        | 9,937  |   |                     | $      | (297   | )               |   | $ | 1,499 |   |   | $ | (331 | ) |   | $ | 11,436 |   |   | $ | (628 | ) |
| Totals                                 |   | $                        | 9,937  |   |                     | $      | (297   | )               |   | $ | 1,499 |   |   | $ | (331 | ) |   | $ | 11,436 |   |   | $ | (628 | ) |

|                                            |   | Available      for Sale |    |   | Held      to Maturity |   |    | Other      Investments |   |
|-------------------------------------------------|--------|-------------------------|---------|--------|-----------------------|--------|---------|------------------------|--------|
|                                            |   | Amortized      Cost     |    |   | Fair      Value       |   |    | Amortized      Cost    |   |   | Fair      Value |   |   | Amortized      Cost |   |   | Fair      Value |   |
|                                            |   | (In      thousands)     |    |
| One      year or less                           |   | $                       | 6,740   |   |                  | $      | 6,753   |                   |   | $ | - |   |   | $ | - |   |   | $ | 100 |   |   | $ | 100 |   |
| One      to five years                          |   |                    | 93,766  |   |                  |   | 94,109  |                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Five      to ten years                          |   |                    | 35,849  |   |                  |   | 36,143  |                   |   |   | 1,416 |   |   |   | 1,149 |   |   |   | - |   |   |   | - |   |
| Over      ten years                             |   |                    | 45,762  |   |                  |   | 45,664  |                   |   |   | 9,855 |   |   |   | 10,275 |   |   |   | 1,116 |   |   |   | 1,116 |   |
| Equity      investments with no stated maturity |   |                    | -       |   |                  |   | -       |                   |   |   | - |   |   |   | - |   |   |   | 8,181 |   |   |   | 8,181 |   |
|                                            |   | $                       | 182,117 |   |                  | $      | 182,669 |                   |   | $ | 11,271 |   |   | $ | 11,424 |   |   | $ | 9,397 |   |   | $ | 9,397 |   |

----

|                           |   | June      30,       |      |   | December      31, |   |
|--------------------------------|--------|---------------------|-----------|--------|-------------------|--------|
|                           |   | 2010                |      |   | 2009              |   |
|                           |   | (In      thousands) |      |
| Commercial                     |   | $                   | 135,111   |   |              | $      | 137,684 |   |
| Commercial      real estate    |   |                | 429,500   |   |              |   | 452,235 |   |
| Residential      real estate   |   |                | 414,389   |   |              |   | 399,588 |   |
| Construction      real estate  |   |                | 158,663   |   |              |   | 194,179 |   |
| Installment      and other     |   |                | 52,501    |   |              |   | 58,456 |   |
| Total      loans               |   |                | 1,190,164 |   |              |   | 1,242,142 |   |
| Unearned      income           |   |                | (2,117    | )      |              |   | (2,356 | ) |
| Gross      loans               |   |                | 1,188,047 |   |              |   | 1,239,786 |   |
| Allowance      for loan losses |   |                | (29,658   | )      |              |   | (24,504 | ) |
| Net      loans                 |   | $                   | 1,158,389 |   |              | $      | 1,215,282 |   |

|                            |   | At      June 30, 2010 |   | At      December 31, 2009 |   |
|---------------------------------|--------|-----------------------|--------|---------------------------|--------|
|                            |   | (In      thousands)   |   |
| Non-accruing      loans         |   | $                     | 52,010 |                      |   | $ | 65,035 |   |
| Total      non-performing loans |   |                  | 52,010 |                      |   |   | 65,035 |   |

|                                                               |   | June      30,       |   |   | December      31, |   |
|--------------------------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                                               |   | 2010                |   |   | 2009              |   |
|                                                               |   | (In      thousands) |   |
| Loans      for which there was a related allowance for loan losses |   | $                   | 4,843  |   |              | $      | - |   |
| Other      impaired loans                                          |   |                | 52,020 |   |              |   | 67,736 |   |
| Total      impaired loans                                          |   | $                   | 56,863 |   |              | $      | 67,736 |   |
|                                                               |   |                |   |   |              |   |   |   |
| Related      allowance for loan losses                             |   | $                   | 529    |   |              | $      | - |   |

----

|                                |   | Three      Months EndedJune      30, |   |   | Six      Months EndedJune      30, |   |
|-------------------------------------|--------|--------------------------------------|--------|--------|------------------------------------|--------|
|                                |   | 2010                                 |   |   | 2009                               |   |   | 2010 |   |   | 2009 |   |
|                                |   | (Dollars      in thousands)          |   |
| Balance      at beginning of period |   | $                                    | 24,822 |   |                               | $      | 17,963 |   |   | $ | 24,504 |   |   | $ | 15,230 |   |
| Provision      for loan losses      |   |                                 | 11,101 |   |                               |   | 12,632 |   |   |   | 15,358 |   |   |   | 16,793 |   |
| Total      charge-offs              |   |                                 | (6,406 | )      |                               |   | (5,791 | ) |   |   | (10,465 | ) |   |   | (7,310 | ) |
| Total      recoveries               |   |                                 | 141    |   |                               |   | 60 |   |   |   | 261 |   |   |   | 151 |   |
| Net      charge-offs                |   |                                 | (6,265 | )      |                               |   | (5,731 | ) |   |   | (10,204 | ) |   |   | (7,159 | ) |
| Balance      at end of period       |   | $                                    | 29,658 |   |                               | $      | 24,864 |   |   | $ | 29,658 |   |   | $ | 24,864 |   |

|                          |   | At      June 30,2010 |   |   | At      December 31, 2009 |   |
|-------------------------------|--------|----------------------|--------|--------|---------------------------|--------|
|                          |   | (In      thousands)  |   |
| Construction      real estate |   | $                    | 15,310 |   |                      | $      | 12,782 |   |
| Residential      real estate  |   |                 | 7,078  |   |                      |   | 3,337 |   |
| Commercial      real estate   |   |                 | 7,125  |   |                      |   | 631 |   |
| Total                         |   | $                    | 29,513 |   |                      | $      | 16,750 |   |

----

|                                |   | Shares |    |   | Weighted-Average      Exercise Price |   |   | Weighted-Average      Remaining Contractual Term, in years |   |   | Aggregate      Intrinsic Value (in thousands) |   |
|-------------------------------------|--------|--------|---------|--------|--------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|
| Outstanding      at January 1, 2010 |   |   | 412,500 |   |                                 | $      | 27.03  |                                                       |   |   |                                          |   |   |   |
| Granted                             |   |   | -       |   |                                 |   | -      |                                                       |   |   |                                          |   |   |   |
| Exercised                           |   |   | -       |   |                                 |   | -      |                                                       |   |   |                                          |   |   |   |
| Forfeited      or expired           |   |   | -       |   |                                 |   | -      |                                                       |   |   |                                          |   |   |   |
| Outstanding      at June 30, 2010   |   |   | 412,500 |   |                                 | $      | 27.03  |                                                       |   |   | 2.32                                          |   |   | $ | 1,729 |   |
| Exercisable      at June 30, 2010   |   |   | 229,000 |   |                                 | $      | 26.77  |                                                       |   |   | 3.09                                          |   |   | $ | 995 |   |

| Maturity      Date          |   | Rate   |   | Principal      due |             | Amount |   |
|-----------------------------|--------|--------|--------|--------------------|------------------|--------|--------|
| (Dollars      in thousands) |   |
| 03/23/2015                  |   |   | 3.05   | %                  | At      maturity |   | $      | 20,000 |   |
| 04/27/2021                  |   |   | 6.34   |               | At      maturity |   |   | 2,300 |   |
|                        |   |   |   |               |             |   | $      | 22,300 |   |

----

|                                                            |   | Trust      I                |   |   | Trust      III         |                  |   | Trust      IV          |   |   | Trust      V            |   |
|-----------------------------------------------------------------|--------|-----------------------------|--------|--------|------------------------|-----------------------|--------|------------------------|--------|--------|-------------------------|--------|
|                                                            |   | (Dollars      in thousands) |   |
| Date      of Issue                                              |   | March      23, 2000         |   |   | May      11, 2004      |                  |   | June      29, 2005     |   |   | September      21, 2006 |   |
| Amount      of trust preferred securities issued                |   | $                           | 10,000 |   |                   | $                     | 6,000  |                   |   | $      | 10,000                  |   |   | $ | 10,000 |   |
| Rate      on trust preferred securities                         |   |                        | 10.875 | %      |                   | 3.24%      (variable) |   |                   |   | 6.88   | %                       |   |   | 6.83 | % |
| Maturity                                                        |   | March      8, 2030          |   |   | September      8, 2034 |                  |   | November      23, 2035 |   |   | December      15, 2036  |   |
| Date      of first redemption                                   |   | March      8, 2010          |   |   | September      8, 2009 |                  |   | August      23, 2010   |   |   | September      15, 2011 |   |
| Common      equity securities issued                            |   | $                           | 310    |   |                   | $                     | 186    |                   |   | $      | 310                     |   |   | $ | 310 |   |
| Junior      subordinated deferrable interest debentures owed    |   | $                           | 10,310 |   |                   | $                     | 6,186  |                   |   | $      | 10,310                  |   |   | $ | 10,310 |   |
| Rate      on junior subordinated deferrable interest debentures |   |                        | 10.875 | %      |                   | 3.24%      (variable) |   |                   |   | 6.88   | %                       |   |   | 6.83 | % |

----

|                                            |   | Contract      Amount |    |
|-------------------------------------------------|--------|----------------------|---------|
|                                            |   | June      30, 2010   |    |   | December      31, 2009 |   |
|                                            |   | (In      thousands)  |    |
| Unfunded      commitments under lines of credit |   | $                    | 153,342 |   |   | $ | 155,535 |   |
| Commercial      and standby letters of credit   |   |                 | 18,667  |   |   |   | 14,628 |   |

----

|                                                | Number      of shares issued | Dividend      rate                            |   | Liquidation      value per share |   |   | Original      cost, in thousands |   |
|-----------------------------------------------------|------------------------------|-----------------------------------------------|--------|----------------------------------|--------|--------|----------------------------------|--------|
| Series      A cumulative perpetual preferred shares | 35,539                       | 5 %      for the first 5 years, thereafter 9% |   | $                                | 1,000  |   |                             | $      | 33,437 |   |
| Series      B cumulative perpetual preferred shares | 1,777                        | 9%                                            |   |                             | 1,000  |   |                             |   | 2,102 |   |

----

| · | Level      1: Quoted prices (unadjusted) for identical assets or liabilities in      active markets that the entity has the ability to access as of the      measurement date. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Level      2: Significant other observable inputs other than Level 1 prices such as      quoted prices for similar assets or liabilities; quoted prices in markets      that are not active; or other inputs that are observable or can be      corroborated by observable marketdata. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Level      3: Significant unobservable inputs that reflect a reporting entity’s own      assumptions about the assumptions that market participants would use in      pricing an asset or liability. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| June      30, 2010                                                                                   |   | Total               |   |   | Quoted      Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant      Other Observable Inputs (Level 2) |   |   | Significant      Unobservable Inputs (Level 3) |   |
|------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|------------------------------------------------|--------|
|                                                                                                 |   | (In      thousands) |   |
| Financial      Assets:                                                                               |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |
| Investment      securities available for sale:                                                       |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |
| Government      sponsored agencies                                                                   |   | $                   | 85,281 |   |                                                                | $      | -      |                                               |   | $      | 85,281                                         |   |   | $ | - |   |
| States      and political subdivisions                                                               |   |                | 27,056 |   |                                                                |   | -      |                                               |   |   | 27,056                                         |   |   |   | - |   |
| Residential      mortgage-backed securities                                                          |   |                | 70,332 |   |                                                                |   | -      |                                               |   |   | 70,332                                         |   |   |   | - |   |
| Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs       |   |                | 228    |   |                                                                |   | -      |                                               |   |   | 228                                            |   |   |   | - |   |
|                                                                                                 |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Liabilities:                                                                          |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
|  Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs |   | $                   | 158    |   |                                                                | $      | -      |                                               |   | $      | 158                                            |   |   | $ | - |   |
|                                                                                                 |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Off-balance-sheet      instruments:                                                                  |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Loan      commitments and standby letters of credit                                                  |   | $                   | 26     |   |                                                                | $      | -      |                                               |   | $      | 26                                             |   |   | $ | - |   |
|                                                                                                 |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| December      31, 2009                                                                               |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
|                                                                                                 |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Assets:                                                                               |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Investment      securities available for sale:                                                       |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Government      sponsored agencies                                                                   |   | $                   | 68,382 |   |                                                                | $      | -      |                                               |   | $      | 68,382                                         |   |   | $ | - |   |
| States      and political subdivisions                                                               |   |                | 26,519 |   |                                                                |   | -      |                                               |   |   | 26,519                                         |   |   |   | - |   |
| Residential      mortgage-backed securities                                                          |   |                | 41,855 |   |                                                                |   | -      |                                               |   |   | 41,855                                         |   |   |   | - |   |
| Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs       |   |                | 251    |   |                                                                |   | -      |                                               |   |   | 251                                            |   |   |   | - |   |
|                                                                                                 |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Liabilities:                                                                          |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
|  Interest      rate lock commitments, mandatory forward delivery commitments and pair      offs |   | $                   | 1      |   |                                                                | $      | -      |                                               |   | $      | 1                                              |   |   | $ | - |   |
|                                                                                                 |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Off-balance-sheet      instruments:                                                                  |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Loan      commitments and standby letters of credit                                                  |   | $                   | 24     |   |                                                                | $      | -      |                                               |   | $      | 24                                             |   |   | $ | - |   |

----

----

| June      30, 2010             |   | Total               |   |   | Quoted      Prices in Active Markets for Identical Assets (Level 1) |   |   | Significant      Other Observable Inputs (Level 2) |   |   | Significant      Unobservable Inputs (Level 3) |   |
|--------------------------------|--------|---------------------|--------|--------|---------------------------------------------------------------------|--------|--------|----------------------------------------------------|--------|--------|------------------------------------------------|--------|
|                           |   | (In      thousands) |   |
| Financial      Assets:         |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |
| Impaired      loans            |   | $                   | 11,321 |   |                                                                | $      | -      |                                               |   | $      | -                                              |   |   | $ | 11,321 |   |
| Loans      held for sale       |   |                | -      |   |                                                                |   | -      |                                               |   |   | -                                              |   |   |   | - |   |
| Mortgage      servicing rights |   |                | 5,746  |   |                                                                |   | -      |                                               |   |   | -                                              |   |   |   | 5,746 |   |
| Non-Financial      Assets:     |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Foreclosed      assets         |   |                | 29,513 |   |                                                                |   | -      |                                               |   |   | -                                              |   |   |   | 29,513 |   |
|                           |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| December      31, 2009         |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
|                           |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Financial      Assets:         |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Impaired      loans            |   | $                   | 14,954 |   |                                                                | $      | -      |                                               |   | $      | -                                              |   |   | $ | 14,954 |   |
| Loans      held for sale       |   |                | 3,522  |   |                                                                |   | -      |                                               |   |   | 3,522                                          |   |   |   | - |   |
| Mortgage      servicing rights |   |                | 3,049  |   |                                                                |   | -      |                                               |   |   | -                                              |   |   |   | 3,049 |   |
| Non-Financial      Assets:     |   |                |   |   |                                                                |   |   |                                               |   |   |                                           |   |   |   |   |   |
| Foreclosed      assets         |   |                | 16,750 |   |                                                                |   | -      |                                               |   |   | -                                              |   |   |   | 16,750 |   |

----

|                                                                                |   | June      30, 2010   |      |   | December      31, 2009 |   |
|-------------------------------------------------------------------------------------|--------|----------------------|-----------|--------|------------------------|--------|
|                                                                                |   | Carrying      amount |      |   | Fair      value        |   |   | Carrying      amount |   |   | Fair      value |   |
|                                                                                |   | (In      thousands)  |      |
| Financial      assets:                                                              |   |                 |      |   |                   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                        |   | $                    | 20,424    |   |                   | $      | 20,424 |   |   | $ | 18,761 |   |   | $ | 18,761 |   |
| Interest-bearing      deposits with banks                                           |   |                 | 72,591    |   |                   |   | 72,591 |   |   |   | 188,114 |   |   |   | 188,114 |   |
| Federal      funds sold and securities purchased under resellagreements             |   |                 | 112       |   |                   |   | 112 |   |   |   | 620 |   |   |   | 620 |   |
| Investments:                                                                        |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Available      for sale                                                             |   |                 | 182,669   |   |                   |   | 182,669 |   |   |   | 136,756 |   |   |   | 136,756 |   |
| Held      to maturity                                                               |   |                 | 11,271    |   |                   |   | 11,424 |   |   |   | 11,436 |   |   |   | 10,808 |   |
| Other      investments                                                              |   |                 | 9,397     |   |                   |   | 9,397 |   |   |   | 9,568 |   |   |   | 9,568 |   |
| Loans,      net                                                                     |   |                 | 1,158,389 |   |                   |   | 1,174,179 |   |   |   | 1,215,282 |   |   |   | 1,203,138 |   |
| Loans      held for sale                                                            |   |                 | 7,948     |   |                   |   | 8,101 |   |   |   | 9,245 |   |   |   | 9,268 |   |
| Accrued      interest receivable                                                    |   |                 | 7,232     |   |                   |   | 7,232 |   |   |   | 6,840 |   |   |   | 6,840 |   |
| Mortgage      servicing rights                                                      |   |                 | 7,044     |   |                   |   | 7,152 |   |   |   | 7,647 |   |   |   | 8,754 |   |
| Derivative      financial instruments                                               |   |                 | 228       |   |                   |   | 228 |   |   |   | 251 |   |   |   | 251 |   |
|                                                                                |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      liabilities:                                                         |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest      bearing deposits                                                  |   | $                    | 85,896    |   |                   | $      | 85,896 |   |   | $ | 87,238 |   |   | $ | 87,238 |   |
| Interest      bearing deposits                                                      |   |                 | 1,276,540 |   |                   |   | 1,281,501 |   |   |   | 1,381,207 |   |   |   | 1,385,968 |   |
| Short-term      borrowings                                                          |   |                 | 1,173     |   |                   |   | 1,208 |   |   |   | 20,000 |   |   |   | 20,182 |   |
| Long-term      borrowings                                                           |   |                 | 32,300    |   |                   |   | 34,153 |   |   |   | 13,493 |   |   |   | 14,620 |   |
|     Junior      subordinated debt owed to unconsolidated trusts |   |                 | 37,116    |   |                   |   | 18,339 |   |   |   | 37,116 |   |   |   | 18,118 |   |
| Accrued      interest payable                                                       |   |                 | 4,644     |   |                   |   | 4,644 |   |   |   | 5,038 |   |   |   | 5,038 |   |
| Derivative      financial instruments                                               |   |                 | 158       |   |                   |   | 158 |   |   |   | 1 |   |   |   | 1 |   |
|                                                                                |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance      sheet instruments:                                                 |   |                 |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Standby      letters of credit                                                      |   | $                    | 26        |   |                   | $      | 26 |   |   | $ | 24 |   |   | $ | 24 |   |

----

| ·   | August      23, 2010, $172,000.00 for Trinity Capital Trust  IV |
|--------------------|-----------------------------------------------------------------|

| ·   | September      8, 2010, $543,750.00 for Trinity Capital TrustI |
|--------------------|----------------------------------------------------------------|

| ·   | September      8, 2010, $49,656.08 for Trinity Capital III  |
|--------------------|------------------------------------------------------------------|

| ·   | September      15, 2010, $170,750.00 for Trinity Capital Trust  V |
|--------------------|-------------------------------------------------------------------|

----

| ·   | Create      a Financial Services Oversight Council to identify emerging systemic risks      and improve interagencycooperation; |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | Centralize      responsibility for consumer financial protection by creating a new agency,      the Consumer Financial Protection Bureau, responsible for implementing,      examining and enforcing compliance with federal consumer financial      laws; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Establish      strengthened capital standards for banks and bank holding companies, and      disallow trust preferred securities from being included in a bank’s Tier 1      capital determination (subject to a grandfather provision for existing      trust preferred securities); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Contain      a series of provisions covering mortgage loan original standards      affecting, among other things, originator compensation, minimum repayment      standards and pre-payments; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Require      financial holding companies, such as the Company, to be well-capitalized      and well-managed as of July 21, 2011. Bank holding companies and      banks must also be both well-capitalized and well-managed in order to      acquire banks located outside their homestate; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Grant      the Federal Reserve the power to regulate debit card interchange      fees; |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | Implement      corporate governance revisions, including with regard to executive      compensation and proxy access by shareholders, that apply to all public      companies, not just financialinstitutions; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Make      permanent the $250 thousand limit for federal deposit insurance and      increase the cash limit of Securities Investor Protection Corporation      protection from $100 thousand to $250 thousand and provide      unlimited federal deposit insurance until January 1, 2013 for      non-interest bearing demand transaction accounts at all insured depository      institutions; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Repeal      the federal prohibitions on the payment of interest on demand deposits,      thereby permitting depository institutions to pay interest on business      transaction and other accounts; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Increase      the authority of the Federal Reserve to examine the Company and its      nonbank subsidiaries. |
|--------------------|--------------------------------------------------------------------------------------------------------------|

----

|                                             |   | Three      Months Ended |   |   | Six      Months Ended |   |
|--------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                             |   | June      30,           |   |
|                                             |   | 2010                    |   |   | 2009                  |   |   | 2010 |   |   | 2009 |   |
|                                             |   | (In      thousands)     |   |
| Balance      at beginning of period              |   | $                       | 8,330  |   |                  | $      | 7,746 |   |   | $ | 8,525 |   |   | $ | 6,908 |   |
| Servicing      rights originated and capitalized |   |                    | 373    |   |                  |   | 1,206 |   |   |   | 680 |   |   |   | 2,686 |   |
| Amortization                                     |   |                    | (422   | )      |                  |   | (647 | ) |   |   | (924 | ) |   |   | (1,289 | ) |
|                                             |   | $                       | 8,281  |   |                  | $      | 8,305 |   |   | $ | 8,281 |   |   | $ | 8,305 |   |

|                                             |   | Three      Months Ended |   |   | Six      Months Ended |   |
|--------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                             |   | June      30,           |   |
|                                             |   | 2010                    |   |   | 2009                  |   |   | 2010 |   |   | 2009 |   |
|                                             |   | (In      thousands)     |   |
| Balance      at beginning of period              |   | $                       | (685   | )      |                  | $      | (1,981 | ) |   | $ | (878 | ) |   | $ | (1,637 | ) |
| Aggregate      reductions credited to operations |   |                    | -      |   |                  |   | 746 |   |   |   | 332 |   |   |   | 1,250 |   |
| Aggregate      additions charged to operations   |   |                    | (552   | )      |                  |   | - |   |   |   | (691 | ) |   |   | (848 | ) |
|                                             |   | $                       | (1,237 | )      |                  | $      | (1,235 | ) |   | $ | (1,237 | ) |   | $ | (1,235 | ) |

----

|                                            |   | June      30,2010 |   |   | December      31, 2009 |   |
|-------------------------------------------------|--------|-------------------|--------|--------|------------------------|--------|
| Prepayment      Standard Assumption (PSA) speed |   |              | 308.33 | %      |                   |   | 232.00 | % |
| Discount      rate                              |   |              | 10.75  |   |                   |   | 10.76 |   |
| Earnings      rate                              |   |              | 2.05   |   |                   |   | 2.75 |   |

----

----

|                                                                                  |   | Three      Months Ended June 30, |      |
|---------------------------------------------------------------------------------------|--------|----------------------------------|-----------|
|                                                                                  |   | 2010                             |      |   | 2009 |   |
|                                                                                  |   | Average      Balance             |      |   | Interest |   |   | Yield/Rate |   |   | Average      Balance |   |   | Interest |   |   | Yield/Rate |   |
|                                                                                  |   | (Dollars      in thousands)      |      |
| Interest-earning      Assets:                                                         |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(1)                                                                              |   | $                                | 1,210,503 |   |   | $ | 16,638 |   |   |   | 5.51 | % |   | $ | 1,217,988 |   |   | $ | 18,998 |   |   |   | 6.26 | % |
| Taxable      investment securities                                                    |   |                             | 139,192   |   |   |   | 776 |   |   |   | 2.24 |   |   |   | 75,643 |   |   |   | 946 |   |   |   | 5.02 |   |
| Investment      securities exempt from federal income taxes (2)                       |   |                             | 37,497    |   |   |   | 482 |   |   |   | 5.16 |   |   |   | 30,526 |   |   |   | 419 |   |   |   | 5.51 |   |
| Federal      funds sold                                                               |   |                             | 124       |   |   |   | - |   |   |   | - |   |   |   | 346 |   |   |   | - |   |   |   | - |   |
| Other      interest-bearing deposits                                                  |   |                             | 119,150   |   |   |   | 75 |   |   |   | 0.25 |   |   |   | 138,123 |   |   |   | 77 |   |   |   | 0.22 |   |
| Investment      in unconsolidated trust subsidiaries                                  |   |                             | 1,116     |   |   |   | 21 |   |   |   | 7.55 |   |   |   | 1,116 |   |   |   | 21 |   |   |   | 7.55 |   |
| Total      interest-earning assets                                                    |   |                             | 1,507,582 |   |   |   | 17,992 |   |   |   | 4.79 |   |   |   | 1,463,742 |   |   |   | 20,461 |   |   |   | 5.61 |   |
| Non-interest-earning      assets                                                      |   |                             | 86,698    |   |   |   |   |   |   |   |   |   |   |   | 98,278 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                     |   | $                                | 1,594,280 |   |   |   |   |   |   |   |   |   |   | $ | 1,562,020 |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      Liabilities:                                                    |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                             |   |                             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW      deposits                                                                     |   | $                                | 119,828   |   |   | $ | 67 |   |   |   | 0.22 | % |   | $ | 108,534 |   |   | $ | 116 |   |   |   | 0.43 | % |
| Money      market deposits                                                            |   |                             | 206,264   |   |   |   | 126 |   |   |   | 0.25 |   |   |   | 190,510 |   |   |   | 276 |   |   |   | 0.58 |   |
| Savings      deposits                                                                 |   |                             | 351,323   |   |   |   | 241 |   |   |   | 0.28 |   |   |   | 319,512 |   |   |   | 281 |   |   |   | 0.35 |   |
| Time      deposits over $100,000                                                      |   |                             | 418,263   |   |   |   | 2,115 |   |   |   | 2.03 |   |   |   | 393,183 |   |   |   | 2,915 |   |   |   | 2.97 |   |
| Time      deposits under $100,000                                                     |   |                             | 215,821   |   |   |   | 1,056 |   |   |   | 1.96 |   |   |   | 206,515 |   |   |   | 1,429 |   |   |   | 2.78 |   |
| Short-term      borrowings, including ESOP borrowings under 1 year                    |   |                             | 1,215     |   |   |   | 17 |   |   |   | 5.61 |   |   |   | 39,566 |   |   |   | 189 |   |   |   | 1.92 |   |
| Long-term      borrowings, including ESOP borrowings over 1 year                      |   |                             | 32,300    |   |   |   | 253 |   |   |   | 3.14 |   |   |   | 12,889 |   |   |   | 213 |   |   |   | 6.63 |   |
| Long-term      capital lease obligations                                              |   |                             | 2,211     |   |   |   | 67 |   |   |   | 12.15 |   |   |   | 2,211 |   |   |   | 67 |   |   |   | 12.15 |   |
| Junior      subordinated debt owed to unconsolidated trusts                           |   |                             | 37,116    |   |   |   | 684 |   |   |   | 7.39 |   |   |   | 37,116 |   |   |   | 697 |   |   |   | 7.53 |   |
| Total      interest-bearing liabilities                                               |   |                             | 1,384,341 |   |   |   | 4,626 |   |   |   | 1.34 |   |   |   | 1,310,036 |   |   |   | 6,183 |   |   |   | 1.89 |   |
| Demand      deposits--non-interest-bearing                                            |   |                             | 46,231    |   |   |   |   |   |   |   |   |   |   |   | 40,432 |   |   |   |   |   |   |   |   |   |
| Other      non-interest-bearing liabilities                                           |   |                             | 41,863    |   |   |   |   |   |   |   |   |   |   |   | 82,675 |   |   |   |   |   |   |   |   |   |
| Stockholders'      equity, including stock owned by ESOP                              |   |                             | 121,845   |   |   |   |   |   |   |   |   |   |   |   | 128,877 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders equity                                        |   | $                                | 1,594,280 |   |   |   |   |   |   |   |   |   |   | $ | 1,562,020 |   |   |   |   |   |   |   |   |   |
| Net      interest income on a fully tax-equivalent basis/interest rate      Spread(3) |   | $                                | 13,366    |   |   |   | 3.45 | % |   |   |   |   |   | $ | 14,278 |   |   |   | 3.71 | % |
| Net      interest margin on a fully tax-equivalent basis(4)                           |   |                             |      | 3.56 | % |   |   |   |   |   |   |   |   |   |   | 3.91 | % |
| Net      interest margin(4)                                                           |   |                             |      |   |   |   |   | 3.51 | % |   |   |   |   |   |   |   |   |   |   | 3.87 | % |

|  (1) | Average      loans include non-accrual loans of $64.4 million and $41.4 million for      June 30, 2010 and 2009, respectively. Interest income includes loan      origination fees of $456 thousand and $954 thousand for the three months      ended June 30, 2010 and 2009,respectively. |
|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Non-taxable      investment income is presented on a fully tax-equivalent basis, adjusting      for federal and state exemption of interest income and certain other      permanent tax differences. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (3) | Interest      rate spread represents the difference between the average yield on      interest-earning assets and the average cost of interest-bearing      liabilities and is presented on a fully tax-equivalent    basis. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Net      interest margin represents net interest income as a percentage of average      interest-earning assets. |
|-----|------------------------------------------------------------------------------------------------------------------|

----

|                                                                                  |   | Six      Months Ended June 30, |      |
|---------------------------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                                                  |   | 2010                           |      |   | 2009 |   |
|                                                                                  |   | Average      Balance           |      |   | Interest |   |   | Yield/Rate |   |   | Average      Balance |   |   | Interest |   |   | Yield/Rate |   |
|                                                                                  |   | (Dollars      in thousands)    |      |
| Interest-earning      Assets:                                                         |   |                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans(1)                                                                              |   | $                              | 1,223,197 |   |   | $ | 33,910 |   |   |   | 5.59 | % |   | $ | 1,250,334 |   |   | $ | 37,990 |   |   |   | 6.13 | % |
| Taxable      investment securities                                                    |   |                           | 127,817   |   |   |   | 1,409 |   |   |   | 2.22 |   |   |   | 69,919 |   |   |   | 1,144 |   |   |   | 3.30 |   |
| Investment      securities exempt from federal income taxes (2)                       |   |                           | 37,494    |   |   |   | 963 |   |   |   | 5.18 |   |   |   | 26,356 |   |   |   | 767 |   |   |   | 5.87 |   |
| Federal      funds sold                                                               |   |                           | 316       |   |   |   | - |   |   |   | - |   |   |   | 1,295 |   |   |   | 1 |   |   |   | 0.16 |   |
| Other      interest-bearing deposits                                                  |   |                           | 128,813   |   |   |   | 180 |   |   |   | 0.28 |   |   |   | 88,115 |   |   |   | 86 |   |   |   | 0.20 |   |
| Investment      in unconsolidated trust subsidiaries                                  |   |                           | 1,116     |   |   |   | 41 |   |   |   | 7.41 |   |   |   | 1,116 |   |   |   | 42 |   |   |   | 7.59 |   |
| Total      interest-earning assets                                                    |   |                           | 1,518,753 |   |   |   | 36,503 |   |   |   | 4.85 |   |   |   | 1,437,135 |   |   |   | 40,030 |   |   |   | 5.62 |   |
| Non-interest-earning      assets                                                      |   |                           | 86,867    |   |   |   |   |   |   |   |   |   |   |   | 57,875 |   |   |   |   |   |   |   |   |   |
| Total      assets                                                                     |   | $                              | 1,605,620 |   |   |   |   |   |   |   |   |   |   | $ | 1,495,010 |   |   |   |   |   |   |   |   |   |
|                                                                                  |   |                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      Liabilities:                                                    |   |                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                                             |   |                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW      deposits                                                                     |   | $                              | 111,102   |   |   | $ | 137 |   |   |   | 0.25 |   |   | $ | 107,881 |   |   | $ | 237 |   |   |   | 0.44 | % |
| Money      market deposits                                                            |   |                           | 208,942   |   |   |   | 263 |   |   |   | 0.25 |   |   |   | 193,502 |   |   |   | 450 |   |   |   | 0.47 |   |
| Savings      deposits                                                                 |   |                           | 361,203   |   |   |   | 508 |   |   |   | 0.28 |   |   |   | 319,816 |   |   |   | 661 |   |   |   | 0.42 |   |
| Time      deposits over $100,000                                                      |   |                           | 408,576   |   |   |   | 4,473 |   |   |   | 2.21 |   |   |   | 366,812 |   |   |   | 5,627 |   |   |   | 3.09 |   |
| Time      deposits under $100,000                                                     |   |                           | 215,567   |   |   |   | 2,187 |   |   |   | 2.05 |   |   |   | 209,027 |   |   |   | 2,958 |   |   |   | 2.85 |   |
| Short-term      borrowings, including ESOP borrowings under 1 year                    |   |                           | 10,028    |   |   |   | 233 |   |   |   | 4.69 |   |   |   | 29,938 |   |   |   | 252 |   |   |   | 1.70 |   |
| Long-term      borrowings, including ESOP borrowings over 1 year                      |   |                           | 23,473    |   |   |   | 381 |   |   |   | 3.27 |   |   |   | 20,980 |   |   |   | 524 |   |   |   | 5.04 |   |
| Long-term      capital lease obligations                                              |   |                           | 2,211     |   |   |   | 134 |   |   |   | 12.22 |   |   |   | 2,211 |   |   |   | 134 |   |   |   | 12.22 |   |
| Junior      subordinated debt owed to unconsolidated trusts                           |   |                           | 37,116    |   |   |   | 1,367 |   |   |   | 7.43 |   |   |   | 37,116 |   |   |   | 1,406 |   |   |   | 7.64 |   |
| Total      interest-bearing liabilities                                               |   |                           | 1,378,218 |   |   |   | 9,683 |   |   |   | 1.42 |   |   |   | 1,287,283 |   |   |   | 12,249 |   |   |   | 1.92 |   |
|                                                                                  |   |                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits--non-interest-bearing                                            |   | $                              | 46,017    |   |   |   |   |   |   |   |   |   |   | $ | 45,058 |   |   |   |   |   |   |   |   |   |
| Other      non-interest-bearing liabilities                                           |   |                           | 58,847    |   |   |   |   |   |   |   |   |   |   |   | 45,156 |   |   |   |   |   |   |   |   |   |
| Stockholders'      equity, including stock owned by ESOP                              |   |                           | 122,538   |   |   |   |   |   |   |   |   |   |   |   | 117,513 |   |   |   |   |   |   |   |   |   |
| Total      liabilities and stockholders equity                                        |   | $                              | 1,605,620 |   |   |   |   |   |   |   |   |   |   | $ | 1,495,010 |   |   |   |   |   |   |   |   |   |
| Net      interest income on a fully tax-equivalent basis/interest rate      Spread(3) |   | $                              | 26,820    |   |   |   | 3.43 | % |   |   |   |   |   | $ | 27,781 |   |   |   | 3.70 | % |
| Net      interest margin on a fully tax-equivalent basis(4)                           |   |                           |      | 3.56 | % |   |   |   |   |   |   |   |   |   |   | 3.90 | % |
| Net      interest margin(4)                                                           |   |                           |      |   |   |   |   | 3.51 | % |   |   |   |   |   |   |   |   |   |   | 3.86 | % |

|  (1) | Average      loans include non-accrual loans of $66.1 million and $39.4 million for      June 30, 2010 and 2009, respectively. Interest income includes loan      origination fees of $920 thousand and $1.9 million for the six months      ended June 30, 2010 and 2009, respectively. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  (2) |  Non-taxable      investment income is presented on a fully tax-equivalent basis, adjusting      for federal and state exemption of interest income and certain other      permanent tax differences.                                                                               |

| (3) | Interest      rate spread represents the difference between the average yield on      interest-earning assets and the average cost of interest-bearing      liabilities and is presented on a fully tax-equivalent    basis. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (4) | Net      interest margin represents net interest income as a percentage of average      interest-earning assets. |
|-----|------------------------------------------------------------------------------------------------------------------|

|                                                  |   | Three      Months Ended |   |   | Six      Months Ended |   |
|-------------------------------------------------------|--------|-------------------------|--------|--------|-----------------------|--------|
|                                                  |   | June      30,           |   |
|                                                  |   | 2010                    |   |   | 2009                  |   |   | 2010 |   |   | 2009 |   |
|                                                  |   | (In      thousands)     |   |
| Net      interest income                              |   | $                       | 13,183 |   |                  | $      | 14,122 |   |   | $ | 26,454 |   |   | $ | 27,494 |   |
| Tax-equivalent      adjustment to net interest income |   |                    | 183    |   |                  |   | 156 |   |   |   | 366 |   |   |   | 287 |   |
| Net      interest income, fully tax-equivalent basis  |   | $                       | 13,366 |   |                  | $      | 14,278 |   |   | $ | 26,820 |   |   | $ | 27,781 |   |

----

|                                                                     |   | Three      Months Ended June 30, |   |   | Six      Months Ended June 30, |   |
|--------------------------------------------------------------------------|--------|----------------------------------|--------|--------|--------------------------------|--------|
|                                                                     |   | 2010      Compared to 2009       |   |   | 2010      Compared to 2009     |   |
|                                                                     |   | Change      Due to Volume        |   |   | Change      Due to Rate        |   |   | Total      Change |   |   | Change      Due to Volume |   |   | Change      Due to Rate |   |   | Total      Change |   |
|                                                                     |   | (In      thousands)              |   |
| Interest-earning      Assets:                                            |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |
|  Loans                                                              |   | $                                | (116   | )      |                           | $      | (2,244 | ) |   | $ | (2,360 | ) |   | $ | (811 | ) |   | $ | (3,269 | ) |   | $ | (4,080 | ) |
|  Taxable      investment securities                                 |   |                             | 530    |   |                           |   | (700 | ) |   |   | (170 | ) |   |   | 725 |   |   |   | (460 | ) |   |   | 265 |   |
|  Investment      securities exempt from federal income taxes(1)     |   |                             | 91     |   |                           |   | (28 | ) |   |   | 63 |   |   |   | 294 |   |   |   | (98 | ) |   |   | 196 |   |
|  Federal      funds sold                                            |   |                             | -      |   |                           |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | (1 | ) |   |   | (1 | ) |
|  Other      interest bearing deposits                               |   |                             | (12    | )      |                           |   | 10 |   |   |   | (2 | ) |   |   | 49 |   |   |   | 45 |   |   |   | 94 |   |
|  Investment      in unconsolidated trust subsidiaries               |   |                             | -      |   |                           |   | - |   |   |   | - |   |   |   | - |   |   |   | (1 | ) |   |   | (1 | ) |
|  Total      increase (decrease) in interest income                  |   | $                                | 493    |   |                           | $      | (2,962 | ) |   | $ | (2,469 | ) |   | $ | 257 |   |   | $ | (3,784 | ) |   | $ | (3,527 | ) |
| Interest-bearing      Liabilities:                                       |   |                             |   |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |
|  Now      deposits                                                  |   | $                                | 11     |   |                           | $      | (60 | ) |   | $ | (49 | ) |   | $ | 7 |   |   | $ | (107 | ) |   | $ | (100 | ) |
|  Money      market deposits                                         |   |                             | 21     |   |                           |   | (171 | ) |   |   | (150 | ) |   |   | 34 |   |   |   | (221 | ) |   |   | (187 | ) |
|  Savings      deposits                                              |   |                             | 26     |   |                           |   | (66 | ) |   |   | (40 | ) |   |   | 78 |   |   |   | (231 | ) |   |   | (153 | ) |
|  Time      deposits over $100,000                                   |   |                             | 176    |   |                           |   | (976 | ) |   |   | (800 | ) |   |   | 589 |   |   |   | (1,743 | ) |   |   | (1,154 | ) |
|  Time      deposits under $100,000                                  |   |                             | 61     |   |                           |   | (434 | ) |   |   | (373 | ) |   |   | 90 |   |   |   | (861 | ) |   |   | (771 | ) |
|  Short-term      borrowings, including ESOP borrowings under 1 year |   |                             | (302   | )      |                           |   | 130 |   |   |   | (172 | ) |   |   | (249 | ) |   |   | 230 |   |   |   | (19 | ) |
|  Long-term      borrowings, including ESOP borrowings over 1 year   |   |                             | 196    |   |                           |   | (156 | ) |   |   | 40 |   |   |   | 56 |   |   |   | (199 | ) |   |   | (143 | ) |
|  Long-term      capital lease obligations                           |   |                             | -      |   |                           |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|  Junior      subordinated debt owed to unconsolidated trusts        |   |                             | -      |   |                           |   | (13 | ) |   |   | (13 | ) |   |   | - |   |   |   | (39 | ) |   |   | (39 | ) |
|  Total      increase (decrease) in interest expense                 |   | $                                | 190    |   |                           | $      | (1,747 | ) |   | $ | (1,557 | ) |   | $ | 605 |   |   | $ | (3,171 | ) |   | $ | (2,566 | ) |
|  Increase      (decrease) in net interest income                    |   | $                                | 303    |   |                           | $      | (1,215 | ) |   | $ | (912 | ) |   | $ | (348 | ) |   | $ | (613 | ) |   | $ | (961 | ) |

| (1) | Non-taxable      investment income is presented on a fully tax-equivalent basis, adjusting      for federal and state exemption of interest income and certain other      permanent income tax differences. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                    |   | Three      Months EndedJune      30, |   |   |   |   |   | Six      Months EndedJune      30, |   |   |   |   |
|-----------------------------------------|--------|--------------------------------------|--------|--------|--------|--------|--------|------------------------------------|--------|--------|--------|--------|
|                                    |   | 2010                                 |   |   | 2009   |   |   | Net      difference                |   |   | 2010   |   |   | 2009 |   |   | Net      difference |   |
|                                    |   | (In      thousands)                  |   |
|  Other      income:                |   |                                 |   |   |   |   |   |                               |   |   |   |   |   |   |   |   |   |   |
|  Mortgage      loan servicing fees |   | $                                    | 654    |   |   | $      | 435    |                               |   | $      | 219    |   |   | $ | 1,300 |   |   | $ | 1,222 |   |   | $ | 78 |   |
|  Trust      fees                   |   |                                 | 456    |   |   |   | 329    |                               |   |   | 127    |   |   |   | 811 |   |   |   | 705 |   |   |   | 106 |   |
|  Loan      and other fees          |   |                                 | 804    |   |   |   | 706    |                               |   |   | 98     |   |   |   | 1,470 |   |   |   | 1,319 |   |   |   | 151 |   |
|  Service      charges on deposits  |   |                                 | 433    |   |   |   | 453    |                               |   |   | (20    | )      |   |   | 841 |   |   |   | 860 |   |   |   | (19 | ) |
|  Gain      on sale of loans        |   |                                 | 758    |   |   |   | 2,426  |                               |   |   | (1,668 | )      |   |   | 1,478 |   |   |   | 5,495 |   |   |   | (4,017 | ) |
|  Gain      on sale of securities   |   |                                 | -      |   |   |   | 36     |                               |   |   | (36    | )      |   |   | 47 |   |   |   | 734 |   |   |   | (687 | ) |
|  Title      insurance premiums     |   |                                 | 274    |   |   |   | 424    |                               |   |   | (150   | )      |   |   | 462 |   |   |   | 865 |   |   |   | (403 | ) |
|  Other      operating income       |   |                                 | 85     |   |   |   | 152    |                               |   |   | (67    | )      |   |   | 111 |   |   |   | 255 |   |   |   | (144 | ) |
|                                    |   | $                                    | 3,464  |   |   | $      | 4,961  |                               |   | $      | (1,497 | )      |   | $ | 6,520 |   |   | $ | 11,455 |   |   | $ | (4,935 | ) |

----

|                                                               |   | Three      Months EndedJune      30, |   |   |   |   |   | Six      Months EndedJune      30, |   |   |   |   |
|--------------------------------------------------------------------|--------|--------------------------------------|--------|--------|--------|--------|--------|------------------------------------|--------|--------|--------|--------|
|                                                               |   | 2010                                 |   |   | 2009   |   |   | Net      difference                |   |   | 2010   |   |   | 2009 |   |   | Net      difference |   |
|                                                               |   | (In      thousands)                  |   |
|  Other      expenses:                                         |   |                                 |   |   |   |   |   |                               |   |   |   |   |   |   |   |   |   |   |
|  Salaries      and employee benefits                          |   | $                                    | 5,091  |   |   | $      | 4,658  |                               |   | $      | 433    |   |   | $ | 10,169 |   |   | $ | 9,702 |   |   | $ | 467 |   |
|  Occupancy                                                    |   |                                 | 1,028  |   |   |   | 789    |                               |   |   | 239    |   |   |   | 2,005 |   |   |   | 1,613 |   |   |   | 392 |   |
|  Data      processing                                         |   |                                 | 709    |   |   |   | 693    |                               |   |   | 16     |   |   |   | 1,433 |   |   |   | 1,324 |   |   |   | 109 |   |
|  Marketing                                                    |   |                                 | 375    |   |   |   | 440    |                               |   |   | (65    | )      |   |   | 731 |   |   |   | 888 |   |   |   | (157 | ) |
|  Amortization      and valuation of mortgage servicing rights |   |                                 | 974    |   |   |   | (99    | )                                  |   |   | 1,073  |   |   |   | 1,283 |   |   |   | 887 |   |   |   | 396 |   |
|  Amortization      and valuation of other intangible assets   |   |                                 | 97     |   |   |   | 10     |                               |   |   | 87     |   |   |   | 222 |   |   |   | 133 |   |   |   | 89 |   |
|  Supplies                                                     |   |                                 | 118    |   |   |   | 166    |                               |   |   | (48    | )      |   |   | 209 |   |   |   | 352 |   |   |   | (143 | ) |
|  Loss      on sale of other real estate owned                 |   |                                 | 1,053  |   |   |   | 313    |                               |   |   | 740    |   |   |   | 1,485 |   |   |   | 531 |   |   |   | 954 |   |
|  Postage                                                      |   |                                 | 161    |   |   |   | 117    |                               |   |   | 44     |   |   |   | 322 |   |   |   | 284 |   |   |   | 38 |   |
|  Bankcard      and ATM network fees                           |   |                                 | 335    |   |   |   | 324    |                               |   |   | 11     |   |   |   | 498 |   |   |   | 654 |   |   |   | (156 | ) |
|  Legal,      professional and accounting fees                 |   |                                 | 573    |   |   |   | 613    |                               |   |   | (40    | )      |   |   | 1,326 |   |   |   | 981 |   |   |   | 345 |   |
|  FDIC      insurance premiums                                 |   |                                 | 934    |   |   |   | 937    |                               |   |   | (3     | )      |   |   | 1,832 |   |   |   | 1,184 |   |   |   | 648 |   |
|  Collection      expenses                                     |   |                                 | 448    |   |   |   | 169    |                               |   |   | 279    |   |   |   | 828 |   |   |   | 291 |   |   |   | 537 |   |
|  Other                                                        |   |                                 | 781    |   |   |   | 517    |                               |   |   | 264    |   |   |   | 1,319 |   |   |   | 1,312 |   |   |   | 7 |   |
|                                                               |   | $                                    | 12,677 |   |   | $      | 9,647  |                               |   | $      | 3,030  |   |   | $ | 23,662 |   |   | $ | 20,136 |   |   | $ | 3,526 |   |

----

----

|                                                                 |   | At      June 30, 2010 |    |   | At      December 31, 2009 |   |    | At      June 30, 2009 |   |
|----------------------------------------------------------------------|--------|-----------------------|---------|--------|---------------------------|--------|---------|-----------------------|--------|
|                                                                 |   | Amortized      Cost   |    |   | Fair      Value           |   |    | Amortized      Cost   |   |   | Fair      Value |   |   | Amortized      Cost |   |   | Fair      Value |   |
|                                                                 |   | (In      thousands)   |    |
| Securities      Available for Sale:                                  |   |                  |    |   |                      |   |    |                  |   |   |   |   |   |   |   |   |   |   |
| U.S.      Government sponsored agencies                              |   | $                     | 85,114  |   |                      | $      | 85,281  |                  |   | $ | 68,502 |   |   | $ | 68,382 |   |   | $ | 46,205 |   |   | $ | 47,586 |   |
| States      and political subdivisions                               |   |                  | 26,550  |   |                      |   | 27,056  |                  |   |   | 26,112 |   |   |   | 26,519 |   |   |   | 29,257 |   |   |   | 29,210 |   |
| Residential      mortgage-backed securities                          |   |                  | 70,453  |   |                      |   | 70,332  |                  |   |   | 41,906 |   |   |   | 41,855 |   |   |   | 32,290 |   |   |   | 31,366 |   |
| Total      securities available for sale                             |   | $                     | 182,117 |   |                      | $      | 182,669 |                  |   | $ | 136,520 |   |   | $ | 136,756 |   |   | $ | 107,752 |   |   | $ | 108,162 |   |
| Securities      Held to Maturity                                     |   |                  |    |   |                      |   |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| States      and political subdivisions                               |   | $                     | 11,271  |   |                      | $      | 11,424  |                  |   | $ | 11,436 |   |   | $ | 10,808 |   |   | $ | 8,805 |   |   | $ | 8,842 |   |
| Total      securities held to maturity                               |   | $                     | 11,271  |   |                      | $      | 11,424  |                  |   | $ | 11,436 |   |   | $ | 10,808 |   |   | $ | 8,805 |   |   | $ | 8,842 |   |
| Other      securities:                                               |   |                  |    |   |                      |   |    |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-marketable      equity securities (including FRB and FHLB stock) |   | $                     | 8,281   |   |                      | $      | 8,281   |                  |   | $ | 8,452 |   |   | $ | 8,452 |   |   | $ | 6,722 |   |   | $ | 6,722 |   |
| Investment      in unconsolidated trusts                             |   |                  | 1,116   |   |                      |   | 1,116   |                  |   |   | 1,116 |   |   |   | 1,116 |   |   |   | 1,116 |   |   |   | 1,116 |   |
| Total      other securities                                          |   | $                     | 9,397   |   |                      | $      | 9,397   |                  |   | $ | 9,568 |   |   | $ | 9,568 |   |   | $ | 7,838 |   |   | $ | 7,838 |   |

|                           |   | At      June 30, 2010       |      |   | At      December 31, 2009 |   |   | At      June 30, 2009 |   |
|--------------------------------|--------|-----------------------------|-----------|--------|---------------------------|--------|--------|-----------------------|--------|
|                           |   | Amount                      |      |   | Percent                   |   |   | Amount                |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                           |   | (Dollars      in thousands) |      |
| Commercial                     |   | $                           | 135,111   |   |                      |   | 11.35  | %                     |   | $ | 137,684 |   |   |   | 11.08 | % |   | $ | 119,780 |   |   |   | 9.50 | % |
| Commercial      real estate    |   |                        | 429,500   |   |                      |   | 36.09  |                  |   |   | 452,235 |   |   |   | 36.41 |   |   |   | 433,744 |   |   |   | 34.40 |   |
| Residential      real estate   |   |                        | 414,389   |   |                      |   | 34.82  |                  |   |   | 399,588 |   |   |   | 32.17 |   |   |   | 438,715 |   |   |   | 34.80 |   |
| Construction      real estate  |   |                        | 158,663   |   |                      |   | 13.33  |                  |   |   | 194,179 |   |   |   | 15.63 |   |   |   | 208,116 |   |   |   | 16.51 |   |
| Installment      and other     |   |                        | 52,501    |   |                      |   | 4.41   |                  |   |   | 58,456 |   |   |   | 4.71 |   |   |   | 60,385 |   |   |   | 4.79 |   |
| Total      loans               |   |                        | 1,190,164 |   |                      |   | 100.00 |                  |   |   | 1,242,142 |   |   |   | 100.00 |   |   |   | 1,260,740 |   |   |   | 100.00 |   |
| Unearned      income           |   |                        | (2,117    | )      |                      |   |   |                  |   |   | (2,356 | ) |   |   |   |   |   |   | (2,143 | ) |   |   |   |   |
| Gross      loans               |   |                        | 1,188,047 |   |                      |   |   |                  |   |   | 1,239,786 |   |   |   |   |   |   |   | 1,258,597 |   |   |   |   |   |
| Allowance      for loan losses |   |                        | (29,658   | )      |                      |   |   |                  |   |   | (24,504 | ) |   |   |   |   |   |   | (24,864 | ) |   |   |   |   |
| Net      loans                 |   | $                           | 1,158,389 |   |                      |   |   |                  |   | $ | 1,215,282 |   |   |   |   |   |   | $ | 1,233,733 |   |   |   |   |   |

----

|                                                         |   | At      June 30, 2010       |   |   | At      December 31, 2009 |   |   | At      June 30, 2009 |   |
|--------------------------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|--------|-----------------------|--------|
|                                                         |   | (Dollars      in thousands) |   |
| Non-accruing      loans                                      |   | $                           | 52,010 |   |                      | $      | 65,035 |                  |   | $ | 60,506 |   |
| Loans      90 days or more past due, still accruing interest |   |                        | -      |   |                      |   | -      |                  |   |   | - |   |
| Total      non-performing loans                              |   |                        | 52,010 |   |                      |   | 65,035 |                  |   |   | 60,506 |   |
| Other      real estate owned                                 |   |                        | 29,513 |   |                      |   | 16,750 |                  |   |   | 7,668 |   |
| Other      repossessed assets                                |   |                        | 389    |   |                      |   | 406    |                  |   |   | 411 |   |
| Total      non-performing assets                             |   | $                           | 81,912 |   |                      | $      | 82,191 |                  |   | $ | 68,585 |   |
| Restructured      loans, still accruing interest             |   |                        | 4,633  |   |                      |   | 2,513  |                  |   |   | 1,548 |   |
| Total      non-performing loans to total loans               |   |                        | 4.37   | %      |                      |   | 5.24   | %                     |   |   | 4.80 | % |
| Allowance      for loan losses to non-performing loans       |   |                        | 57.02  | %      |                      |   | 37.68  | %                     |   |   | 41.09 | % |
| Total      non-performing assets to total assets             |   |                        | 5.24   | %      |                      |   | 4.90   | %                     |   |   | 4.38 | % |

----

|                                              |   | Three      Months EndedJune      30, |      |   | Six      Months EndedJune      30, |   |
|---------------------------------------------------|--------|--------------------------------------|-----------|--------|------------------------------------|--------|
|                                              |   | 2010                                 |      |   | 2009                               |   |   | 2010 |   |   | 2009 |   |
|                                              |   | (Dollars      in thousands)          |      |
| Balance      at beginning of period               |   | $                                    | 24,822    |   |                               | $      | 17,963 |   |   | $ | 24,504 |   |   | $ | 15,230 |   |
| Provision      for loan losses                    |   |                                 | 11,101    |   |                               |   | 12,632 |   |   |   | 15,358 |   |   |   | 16,793 |   |
| Total      charge-offs                            |   |                                 | (6,406    | )      |                               |   | (5,791 | ) |   |   | (10,465 | ) |   |   | (7,310 | ) |
| Total      recoveries                             |   |                                 | 141       |   |                               |   | 60 |   |   |   | 261 |   |   |   | 151 |   |
| Net      charge-offs                              |   |                                 | (6,265    | )      |                               |   | (5,731 | ) |   |   | (10,204 | ) |   |   | (7,159 | ) |
| Balance      at end of period                     |   | $                                    | 29,658    |   |                               | $      | 24,864 |   |   | $ | 29,658 |   |   | $ | 24,864 |   |
|                                              |   |                                 |      |   |                               |   |   |   |   |   |   |   |   |   |   |   |
| Gross      loans at end of period                 |   | $                                    | 1,188,047 |   |                               | $      | 1,258,597 |   |   | $ | 1,188,047 |   |   | $ | 1,258,597 |   |
| Ratio      of allowance to total loans            |   |                                 | 2.49      | %      |                               |   | 1.97 | % |   |   | 2.49 | % |   |   | 1.97 | % |
| Ratio      of net charge-offs to average loans(1) |   |                                 | 2.08      | %      |                               |   | 1.89 | % |   |   | 1.68 | % |   |   | 1.15 | % |

| (1) | Net      charge-offs are annualized for the purposes of this      calculation. |
|-----|--------------------------------------------------------------------------------|

|                                        |   | At      June 30, 2010       |   |   | At      December 31, 2009 |   |   | At      June 30, 2009 |   |
|---------------------------------------------|--------|-----------------------------|--------|--------|---------------------------|--------|--------|-----------------------|--------|
|                                        |   | Amount                      |   |   | Percent                   |   |   | Amount                |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                                        |   | (Dollars      in thousands) |   |
| Commercial                                  |   | $                           | 6,570  |   |                      |   | 11.35  | %                     |   | $ | 4,371 |   |   |   | 11.08 | % |   | $ | 4,483 |   |   |   | 9.50 | % |
| Commercial      and residential real estate |   |                        | 9,722  |   |                      |   | 70.91  |                  |   |   | 8,416 |   |   |   | 68.58 |   |   |   | 7,725 |   |   |   | 69.20 |   |
| Construction      real estate               |   |                        | 6,941  |   |                      |   | 13.33  |                  |   |   | 8,637 |   |   |   | 15.63 |   |   |   | 9,146 |   |   |   | 16.51 |   |
| Installment      and other                  |   |                        | 3,255  |   |                      |   | 4.41   |                  |   |   | 3,080 |   |   |   | 4.71 |   |   |   | 3,510 |   |   |   | 4.79 |   |
| Unallocated                                 |   |                        | 3,170  |   |                      |   | N/A    |                  |   |   | - |   |   |   | N/A |   |   |   | - |   |   |   | N/A |   |
| Total                                       |   | $                           | 29,658 |   |                      |   | 100.00 | %                     |   | $ | 24,504 |   |   |   | 100.00 | % |   | $ | 24,864 |   |   |   | 100.00 | % |

----

----

|                                             |   | At      June 30, 2010 |   |   | At      December 31, 2009 |   |   | At      June 30, 2009 |   |
|--------------------------------------------------|--------|-----------------------|--------|--------|---------------------------|--------|--------|-----------------------|--------|
|                                             |   | (In      thousands)   |   |
| Performing      loans classified as:             |   |                  |   |   |                      |   |   |                  |   |
| Substandard                                      |   | $                     | 23,514 |   |                      | $      | 30,648 |                  |   | $ | 62,187 |   |
| Doubtful                                         |   |                  | -      |   |                      |   | -      |                  |   |   | - |   |
| Total      performing adversely classified loans |   | $                     | 23,514 |   |                      | $      | 30,648 |                  |   | $ | 62,187 |   |
| Special      mention loans                       |   | $                     | 699    |   |                      | $      | 5,269  |                  |   | $ | 5,418 |   |

----

| ·   | August      23, 2010, $172,000.00 for Trinity Capital Trust  IV |
|--------------------|-----------------------------------------------------------------|

| ·   | September      8, 2010, $543,750.00 for Trinity Capital TrustI |
|--------------------|----------------------------------------------------------------|

| ·   | September      8, 2010, $49,656.08 for Trinity Capital III  |
|--------------------|------------------------------------------------------------------|

| ·   | September      15, 2010, $170,750.00 for Trinity Capital Trust  V |
|--------------------|-------------------------------------------------------------------|

----

----

----

|                                                        |   | Time      to Maturity or Repricing |    |
|-------------------------------------------------------------|--------|------------------------------------|---------|
| As      of June 30, 2010:                                   |   | 0-90      Days                     |    |   | 91-365      Days |   |   | 1-5      Years |   |   | Over      5 Years |   |   | Total |   |
|                                                        |   | (Dollars      in thousands)        |    |
| Interest-earning      Assets:                               |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                       |   | $                                  | 497,432 |   |   | $ | 394,089 |   |   | $ | 262,794 |   |   | $ | 33,732 |   |   | $ | 1,188,047 |   |
| Loans      held for sale                                    |   |                               | 7,948   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 7,948 |   |
| Investment      securities                                  |   |                               | 37,851  |   |   |   | 21,051 |   |   |   | 89,489 |   |   |   | 53,830 |   |   |   | 202,221 |   |
| Securities      purchased under agreements to resell        |   |                               | 112     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 112 |   |
| Interest-bearing      deposits with banks                   |   |                               | 62,646  |   |   |   | - |   |   |   | 9,945 |   |   |   | - |   |   |   | 72,591 |   |
| Investment      in unconsolidated trusts                    |   |                               | 186     |   |   |   | - |   |   |   | - |   |   |   | 930 |   |   |   | 1,116 |   |
| Total      interest-earning assets                          |   | $                                  | 606,175 |   |   | $ | 415,140 |   |   | $ | 362,228 |   |   | $ | 88,492 |   |   | $ | 1,472,035 |   |
|                                                        |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      Liabilities:                          |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW      deposits                                           |   | $                                  | 51,409  |   |   | $ | 97,404 |   |   | $ | - |   |   | $ | - |   |   | $ | 148,813 |   |
| Money      market deposits                                  |   |                               | 75,572  |   |   |   | 102,261 |   |   |   | - |   |   |   | - |   |   |   | 177,833 |   |
| Savings      deposits                                       |   |                               | 132,679 |   |   |   | 203,455 |   |   |   | - |   |   |   | - |   |   |   | 336,134 |   |
| Time      deposits over $100,000                            |   |                               | 118,468 |   |   |   | 237,630 |   |   |   | 36,105 |   |   |   | 5,223 |   |   |   | 397,426 |   |
| Time      deposits under $100,000                           |   |                               | 50,507  |   |   |   | 140,734 |   |   |   | 22,673 |   |   |   | 2,420 |   |   |   | 216,334 |   |
| Short-term      borrowings                                  |   |                               | 9       |   |   |   | 1,164 |   |   |   | - |   |   |   | - |   |   |   | 1,173 |   |
| Long-term      borrowings                                   |   |                               | -       |   |   |   | - |   |   |   | 10,000 |   |   |   | 22,300 |   |   |   | 32,300 |   |
| Capital      lease obligations                              |   |                               | -       |   |   |   | - |   |   |   | - |   |   |   | 2,211 |   |   |   | 2,211 |   |
| Junior      subordinated debt owed to unconsolidated trusts |   |                               | 6,186   |   |   |   | - |   |   |   | - |   |   |   | 30,930 |   |   |   | 37,116 |   |
| Total      interest-bearing liabilities                     |   | $                                  | 434,830 |   |   | $ | 782,648 |   |   | $ | 68,778 |   |   | $ | 63,084 |   |   | $ | 1,349,340 |   |
| Rate      sensitive assets (RSA)                            |   | $                                  | 606,175 |   |   | $ | 1,021,315 |   |   | $ | 1,383,543 |   |   | $ | 1,472,035 |   |   |   | 1,472,035 |   |
| Rate      sensitive liabilities (RSL)                       |   |                               | 434,830 |   |   |   | 1,217,478 |   |   |   | 1,286,256 |   |   |   | 1,349,340 |   |   |   | 1,349,340 |   |
| Cumulative      GAP (GAP=RSA-RSL)                           |   |                               | 171,345 |   |   |   | (196,163 | ) |   |   | 97,287 |   |   |   | 122,695 |   |   |   | 122,695 |   |
| RSA/Total      assets                                       |   |                               | 38.79   | % |   |   | 65.35 | % |   |   | 88.53 | % |   |   | 94.19 | % |   |   | 94.19 | % |
| RSL/Total      assets                                       |   |                               | 27.82   | % |   |   | 77.90 | % |   |   | 82.30 | % |   |   | 86.34 | % |   |   | 86.34 | % |
| GAP/Total      assets                                       |   |                               | 10.96   | % |   |   | -12.55 | % |   |   | 6.22 | % |   |   | 7.85 | % |   |   | 7.85 | % |
| GAP/RSA                                                     |   |                               | 28.27   | % |   |   | -19.21 | % |   |   | 7.03 | % |   |   | 8.34 | % |   |   | 8.34 | % |

----

|                                     |   |               | At      June 30, 2010 |                | At      December 31, 2009 |               |
|------------------------------------------|--------|--------------------|-----------------------|---------------------|---------------------------|--------------------|
| Changes      in Levels of Interest Rates |   | Dollar      Change |                  | Percent      Change |                      | Dollar      Change |   | Percent      Change |   |
| (Dollars      in thousands)              |   |
|                                     | +2.00  | %                  |                  | $                   | (9,121                    | )                  |   |   | (16.78 | )% |   | $ | (6,584 | ) |   |   | (11.71 | )% |
|                                     | +1.00  |               |                  |                | (2,152                    | )                  |   |   | (3.96 | ) |   |   | (3,329 | ) |   |   | (5.92 | ) |
|                                     | (1.00  | )                  |                  |                | 2,011                     |               |   |   | 3.70 |   |   |   | (281 | ) |   |   | (0.50 | ) |
|                                     | (2.00  | )                  |                  |                | 4,213                     |               |   |   | 7.75 |   |   |   | (394 | ) |   |   | (0.70 | ) |

| 1. | Changes      in interest rates are immediate. |
|----|-----------------------------------------------|

| 2. | It      is our policy that interest rate exposure due to a 2% interest rate rise      or fall be limited to 15% of our annual net interest income, as forecasted      by the simulation model. As demonstrated by the table above, our interest      rate risk exposure was within this policy at June 30, 2010, with the      exception of the +2.00% interest rate scenario where it exceeded our      policy limit by 1.78%.. |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Period                      |   | (a)Total      number of shares issued |   |      | (b)      Average price paid per share |   |   | (c)Total      number of shares issued as part of publically announced plans or      programs |   |   | (d)      Maximum approximate dollar value that may yet be issued under the plans or      programs |   |
|-----------------------------|--------|---------------------------------------|--------|-----------|---------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------|--------|
| April      1-April 30, 2010 |   |                                  | -      |      |                                  | $      | -      |                                                                                         |   |   | -                                                                                                 |   |   | $ | - |   |
| May      1-May 31, 2010     |   |                                  | -      |      |                                  |   | -      |                                                                                         |   |   | -                                                                                                 |   |   |   | - |   |
| June      1-June 30, 2010   |   |                                  | 9,555  | (1)  |                                  |   | 14.50  |                                                                                         |   |   | -                                                                                                 |   |   |   | - |   |
|                        |   |                                  | 9,555  |      |                                  | $      | 14.50  |                                                                                         |   |   | -                                                                                                 |   |   | $ | - |   |

| (1) | The      shares issued during the second quarter of 2010 were issued to the      Employee Stock Ownership Plan as a discretionary annual contribution. The      shares were issued out of the Company’s treasury  stock. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1   | Agreement      by and between Los Alamos National Bank and the Comptroller of the      Currency (incorporated by reference to Exhibit 99.1 to the Company's Form      8-K filed on February 1, 2010) |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                 |
| 31.1   | Certification      of Chief Executive Officer Pursuant to Rule      13a-14(a)/15d-14(a)                                                                                                              |

| 31.2 | Certification      of Chief Financial Officer Pursuant to Rule      13a-14(a)/15d-14(a) |
|------|-----------------------------------------------------------------------------------------|

| 32.1 | Certification      of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification      of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted      Pursuant to Section 906 of the Sarbanes-Oxley Act of  2002 |
|------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                       | TRINITY      CAPITAL CORPORATION |
|----------------------------|----------------------------------|
|                       |                             |
| Date:      August 16, 2010 | By:                              | /s/      WILLIAM C. ENLOE |
|                       |                             | William      C. Enloe |
|                       |                             | President      and Chief Executive Officer |
|                       |                             |   |
| Date:      August 16, 2010 | By:                              | /s/      DANIEL R. BARTHOLOMEW |
|                       |                             | Daniel      R. Bartholomew |
|                       |                             | Chief      Financial Officer |

----