**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C.  20549**

**FORM      10-KSB**

| ý | ANNUAL                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|--------|-----------------------------------------------------------------------------------------------------------------------------------|

**For      the Fiscal Year Ended December 31, 2006**

| o | TRANSITION                REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE                ACT OF                1934 |
|---|---------------------------------------------------------------------------------------------------------------------------------------|

**THIRD      CENTURY BANCORP**

|                                                                            |                                                     |
|---------------------------------------------------------------------------------|----------------------------------------------------------|
| **Indiana**                                                                     | **20-0857725**                                           |
| (State                  or Other Jurisdiction of Incorporation or Organization) | (I.R.S.                  Employer Identification Number) |
|                                                                            |                                                     |
| **80                  East Jefferson Street, Franklin, Indiana**                | **46131**                                                |
| (Address                  of Principal Executive Office)                        | (Zip                  Code)                              |

**(317)      736-7151**

**None**

**Common      Stock, no par value per share**

**DOCUMENTS      INCORPORATED BY REFERENCE**

----

**THIRD          CENTURY BANCORP**

**FORM          10-KSB**

**INDEX**

|                                     |                                                                                                                                                                                                        | **Page** |
|------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|                                     |                                                                                                                                                                                                        |     |
| PART                        I            |                                                                                                                                                                                                        | 3        |
| Item                        1.           | Description                        Of Business.                                                                                                                                                             | 3        |
| Item                        2.           | Description                        of Property.                                                                                                                                                             | 26       |
| Item                        3.           | Legal                        Proceedings.                                                                                                                                                                   | 27       |
| Item                        4.           | Submission                        of Matters to a Vote of Security Holders.                                                                                                                                 | 27       |
|                                     |                                                                                                                                                                                                        |     |
| PART                        II           |                                                                                                                                                                                                        | 27       |
| Item                        5.           | Market                        for Common Equity, Related Stockholder Matters and Small                        Business  Issuer Purchases of Equity Securities.                                    | 27       |
| Item                        6.           | Management’s  Discussion                        and Analysis or Plan of Operation.                                                                                                          | 28       |
| Item                        7.           | Financial                        Statements.                                                                                                                                                                | 29       |
| Item                        8.           | Changes                        In and Disagreements with Accountants on Accounting and Financial                        Disclosure.                                                                         | 30       |
| Item                        8A.          | Controls                        and Procedures.                                                                                                                                                             | 30       |
| Item                        8B.          | Other                        Information.                                                                                                                                                                   | 30       |
|                                     |                                                                                                                                                                                                        |     |
| PART                        III          |                                                                                                                                                                                                        | 30       |
| Item                        9.           | Directors,                        Executive Officers, Promoters, Control Persons and Corporate                        Governance;                        Compliance With Section 16(a) of the Exchange Act. | 30       |
| Item                        10.          | Executive                        Compensation.                                                                                                                                                              | 30       |
| Item                        11.          | Security                        Ownership of Certain Beneficial Owners and Management and                        Related                        Stockholder Matters.                                        | 30       |
| Item                        12.          | Certain                        Relationships and Related Transactions and Director                        Independence.                                                                                     | 30       |
| Item                        13.          | Exhibits.                                                                                                                                                                                                   | 31       |
| Item                        14.          | Principal                        Accountant Fees and Services.                                                                                                                                              | 31       |
|                                     |                                                                                                                                                                                                        |     |
| SIGNATURES                          | 32                                                                                                                                                                                                          |
|                                     |                                                                                                                                                                                                        |
| Exhibit                      Index  |                                                                                                                                                                                                        |

----

*Index*

**PART          I**

**ITEM          1.                      DESCRIPTION          OF BUSINESS.**

**Forward-Looking          Statements**

**Form 10-KSB**

**General**

**Third Century**
**Company**
**we**
**Mutual**
**Bank**

**Lending          Activities**

----

*Index*

***Loan          Portfolio Data***

|                                                                                                                                                                                                                                                                                                                                   |   | **At                        December 31,** |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                   |   | **2006**                                   |    |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                   |   | **Amount**                                 |    |   | **Percent                        of Total** |   |   | **Amount** |   |   | **Percent                        of Total** |   |
|                                                                                                                                                                                                                                                                                                                                   |   |                                       |    |   | **(Dollars                        in Thousands)** |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                   |   |                                       |    |   |   |   |   |   |   |   |   |   |
| **TYPE                        OF LOAN**                                                                                                                                                                                                                                                                                                |   |                                       |    |   |   |   |   |   |   |   |   |   |
| Real                        Estate Mortgage Loans:                                                                                                                                                                                                                                                                                     |   |                                       |    |   |   |   |   |   |   |   |   |   |
| Land                                                                                                                                |   | $                                          | 6,853   |   |   |   | 6.07 | % |   | $ | 2,836 |   |   |   | 2.66 | % |
| One-to                        four-family                                                                                           |   |                                       | 55,041  |   |   |   | 48.75 |   |   |   | 56,637 |   |   |   | 53.17 |   |
| Multi-family                                                                                                                        |   |                                       | 1,620   |   |   |   | 1.43 |   |   |   | 1,691 |   |   |   | 1.59 |   |
| Commercial                                                                                                                          |   |                                       | 25,242  |   |   |   | 22.35 |   |   |   | 23,879 |   |   |   | 22.42 |   |
| Construction                                                                                                    |   |                                       | 7,113   |   |   |   | 6.30 |   |   |   | 4,481 |   |   |   | 4.21 |   |
| Consumer                        Loans:                                                                                                                                                                                                                                                                                                 |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Home                        Equity                                                                                                  |   |                                       | 3,898   |   |   |   | 3.45 |   |   |   | 4,175 |   |   |   | 3.92 |   |
| Automobiles                                                                                                                         |   |                                       | 3,228   |   |   |   | 2.86 |   |   |   | 3,801 |   |   |   | 3.57 |   |
| Lines                        of                        Credit                                                                       |   |                                       | 2,141   |   |   |   | 1.90 |   |   |   | 2,036 |   |   |   | 1.91 |   |
| Other                                                                                                                               |   |                                       | 910     |   |   |   | 0.81 |   |   |   | 752 |   |   |   | 0.71 |   |
| Commercial                        Loans                                                                         |   |                                       | 6,865   |   |   |   | 6.08 |   |   |   | 6,232 |   |   |   | 5.84 |   |
| Gross                        Loans                        Receivable                                                                                                                                                                                                                                                                   |   | $                                          | 112,911 |   |   |   | 100.00 | % |   | $ | 106,520 |   |   |   | 100.00 | % |
|                                                                                                                                                                                                                                                                                                                                   |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **TYPE                        OF SECURITY**                                                                                                                                                                                                                                                                                            |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Land                                                                                                            |   | $                                          | 6,853   |   |   |   | 6.07 | % |   | $ | 2,836 |   |   |   | 2.66 | % |
| One-to                        four-family                                                                       |   |                                       | 55,041  |   |   |   | 48.75 |   |   |   | 56,637 |   |   |   | 53.17 |   |
| Multi-family                                                                                                    |   |                                       | 1,620   |   |   |   | 1.43 |   |   |   | 1,691 |   |   |   | 1.59 |   |
| Commercial                        Real                        Estate                                            |   |                                       | 25,242  |   |   |   | 22.35 |   |   |   | 23,879 |   |   |   | 22.42 |   |
| Automobiles                                                                                                     |   |                                       | 3,228   |   |   |   | 2.86 |   |   |   | 3,801 |   |   |   | 3.57 |   |
| Other                        Security                                                                           |   |                                       | 18,422  |   |   |   | 16.32 |   |   |   | 15,584 |   |   |   | 14.63 |   |
| Unsecured                                                                                                       |   |                                       | 2,505   |   |   |   | 2.22 |   |   |   | 2,093 |   |   |   | 1.96 |   |
| Gross                        Loans                        Receivable                                                                                                                                                                                                                                                                   |   | $                                          | 112,911 |   |   |   | 100.00 | % |   | $ | 106,520 |   |   |   | 100.00 | % |
|                                                                                                                                                                                                                                                                                                                                   |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **DEDUCT:**                                                                                                                                                                                                                                                                                                                            |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deferred                        Loan                        Fees                                                |   |                                       | 37      |   |   |   |   |   |   |   | 37 |   |   |   |   |   |
| Allowance                        for Loan Losses                                                                                                                                                                                                                                                                                       |   |                                       | 936     |   |   |   |   |   |   |   | 926 |   |   |   |   |   |
| Net                        Loans                        Receivable                                                                  |   | $                                          | 111,938 |   |   |   |   |   |   | $ | 105,557 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                   |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **MORTGAGE                        LOANS:**                                                                                                                                                                                                                                                                                             |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjustable-Rate                                                                                                 |   | $                                          | 52,116  |   |   |   |   |   |   | $ | 39,767 |   |   |   |   |   |
| Fixed-Rate                                                                                                      |   |                                       | 36,640  |   |   |   |   |   |   |   | 45,276 |   |   |   |   |   |
| Total                                                                                                                               |   | $                                          | 88,756  |   |   |   |   |   |   | $ | 85,043 |   |   |   |   |   |

----

*Index*

|                                                                                                                                                                                                                                             |   |                                                                                                                                        |    |   | **Due                                            During Years Ended December 31,** |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|---------|--------|------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                             |   | **Balance****Outstanding                                            at****December                                            31,****2006** |    |   | **2007**                                                                           |   |   | **2008                                            to****2009** |   |   | **2010                                            to****2011** |   |   | **2012                                            to****2016** |   |   | **2017                                            to****2026** |   |   | **2027                                            and****Following** |   |
|                                                                                                                                                                                                                                             |   | (**In                                            Thousands)**                                                                               |    |
| Real                                            Estate Mortgage Loans:                                                                                                                                                                           |   |                                                                                                                                        |    |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Land                                                                                  |   | $                                                                                                                                           | 6,853   |   |                                                                               | $      | 1,978 |   |   | $ | 272 |   |   | $ | 44 |   |   | $ | 226 |   |   | $ | 4,158 |   |   | $ | 175 |   |
| One-                                            to                                            four-family                                                                                                                                        |   |                                                                                                                                        | 55,041  |   |                                                                               |   | 2,731 |   |   |   | 646 |   |   |   | 700 |   |   |   | 6,910 |   |   |   | 18,768 |   |   |   | 25,286 |   |
| Multi-family                                                                          |   |                                                                                                                                        | 1,620   |   |                                                                               |   | 273 |   |   |   | 848 |   |   |   | - |   |   |   | 57 |   |   |   | 442 |   |   |   | - |   |
| Commercial                                                                            |   |                                                                                                                                        | 25,242  |   |                                                                               |   | 3,024 |   |   |   | 930 |   |   |   | 121 |   |   |   | 2,420 |   |   |   | 14,741 |   |   |   | 4,006 |   |
| Construction                                                      |   |                                                                                                                                        | 7,113   |   |                                                                               |   | 6,250 |   |   |   | 863 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                             |   |                                                                                                                                        |    |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer                                            Loans:                                                                                                                                                                                       |   |                                                                                                                                        |    |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Home                                            Equity                                |   |                                                                                                                                        | 3,898   |   |                                                                               |   | 131 |   |   |   | 238 |   |   |   | 180 |   |   |   | 2,793 |   |   |   | 556 |   |   |   | - |   |
| Automobiles                                                                           |   |                                                                                                                                        | 3,228   |   |                                                                               |   | 87 |   |   |   | 1,358 |   |   |   | 1,465 |   |   |   | 318 |   |   |   | - |   |   |   | - |   |
| Lines                                            of                                            Credit                                                                                                                   |   |                                                                                                                                        | 2,141   |   |                                                                               |   | 2,141 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Other                                                                                 |   |                                                                                                                                        | 910     |   |                                                                               |   | 401 |   |   |   | 184 |   |   |   | 295 |   |   |   | 30 |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                             |   |                                                                                                                                        |    |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                            Loans                                                                                                                                              |   |                                                                                                                                        | 6,865   |   |                                                                               |   | 1,106 |   |   |   | 1,527 |   |   |   | 2,622 |   |   |   | 1,146 |   |   |   | 464 |   |   |   | - |   |
|                                                                                                                                                                                                                                             |   |                                                                                                                                        |    |   |                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                 |   | $                                                                                                                                           | 112,911 |   |                                                                               | $      | 18,122 |   |   | $ | 6,866 |   |   | $ | 5,427 |   |   | $ | 13,900 |   |   | $ | 39,129 |   |   | $ | 29,467 |   |

|                                                                          |   | **Due                              After December 31, 2007** |                                                        |
|-------------------------------------------------------------------------------|--------|--------------------------------------------------------------|-------------------------------------------------------------|
|                                                                          |   | **Fixed                              Rates**                 |   **Variable                              Rates** | **Total** |   |
|                                                                          |   | **(In                              Thousands)**              |                                                        |
| Real                              Estate Mortgage Loans:                      |   |                                                         |                                                        |   |   |   |   |   |   |
| Land                                                                          |   | $                                                            | 628                                                         |   |   | $ | 4,247 |   |   | $ | 4,875 |   |
| One-                              to                              four-family |   |                                                         | 32,503                                                      |   |   |   | 19,807 |   |   |   | 52,310 |   |
| Multi-family                                                                  |   |                                                         | 239                                                         |   |   |   | 1,108 |   |   |   | 1,347 |   |
| Commercial                                                                    |   |                                                         | 1,318                                                       |   |   |   | 20,900 |   |   |   | 22,218 |   |
| Construction                                                                  |   |                                                         | -                                                           |   |   |   | 863 |   |   |   | 863 |   |
|                                                                          |   |                                                         |                                                        |   |   |   |   |   |   |   |   |   |
| Consumer                              Loans:                                  |   |                                                         |                                                        |   |   |   |   |   |   |   |   |   |
| Home                              Equity                                      |   |                                                         | -                                                           |   |   |   | 3,767 |   |   |   | 3,767 |   |
| Automobiles                                                                   |   |                                                         | 3,141                                                       |   |   |   | - |   |   |   | 3,141 |   |
| Lines                              of Credit                                  |   |                                                         | -                                                           |   |   |   | - |   |   |   | - |   |
| Other                                                                         |   |                                                         | 509                                                         |   |   |   | - |   |   |   | 509 |   |
|                                                                          |   |                                                         |                                                        |   |   |   |   |   |   |   |   |   |
| Commercial                              Loans                                 |   |                                                         | 3,210                                                       |   |   |   | 2,549 |   |   |   | 5,759 |   |
|                                                                          |   |                                                         |                                                        |   |   |   |   |   |   |   |   |   |
| Total                                                                         |   | $                                                            | 41,548                                                      |   |   | $ | 53,241 |   |   | $ | 94,789 |   |

***One-          to Four-Family Residential Loans***

----

*Index*

***Commercial          Real Estate Loans***

----

*Index*

***Construction          Loans.***

*i.e.*

----

*Index*

***Consumer          Loans***

***Commercial          Loans***

----

*Index*

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **Year                              Ended December 31,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **2006**                                                 |   |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | **(In                              Thousands)**          |   |
| Loans                              Originated:                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                                     |   |   |   |   |
| Real                              Estate Mortgage                              Loans:                                                                                                                                                                                                                                                                                                                                                                                             |   |                                                     |   |   |   |   |
| Land                                                                                                                                                                  |   | $                                                        | 4,670  |   |   | $ | 723 |   |
| One-to                              four-family                                                                                                                       |   |                                                     | 8,181  |   |   |   | 4,954 |   |
| Commercial                                                                                                                                                            |   |                                                     | 7,278  |   |   |   | 10,770 |   |
| Construction                                                                                                                                                          |   |                                                     | 7,632  |   |   |   | 8,749 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                     |   |   |   |   |   |   |
| Consumer                              Loans:                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                     |   |   |   |   |   |   |
| Home                              Equity and Home                              Improvement                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                     | 268    |   |   |   | 753 |   |
| Other                                                                                                                                                                 |   |                                                     | 5,646  |   |   |   | 7,748 |   |
| Commercial                              Loans                                                                                                          |   |                                                     | 7,122  |   |   |   | 11,206 |   |
| Total                              Originations                                                                                                                       |   |                                                     | 40,797 |   |   |   | 44,903 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                     |   |   |   |   |   |   |
| Reductions:                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                     |   |   |   |   |   |   |
| Principal                              Loan                              Repayments                                                                    |   |                                                     | 34,407 |   |   |   | 38,141 |   |
| Transfers                              from Loans to Real                              Estate Owned                                                                                                                                                                                                                                                                                                                                                                               |   |                                                     | -      |   |   |   | 120 |   |
| Total                              Reductions                                                                                                                         |   |                                                     | 34,407 |   |   |   | 38,261 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                     |   |   |   |   |   |   |
| Decrease                              in Other                              Items                                                                 |   |                                                     | 9      |   |   |   | (93 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                                                     |   |   |   |   |   |   |
| Net                              Increase                                                                                                         |   | $                                                        | 6,381  |   |   | $ | 6,735 |   |

***Origination          and Other          Fees***
**.  **

**Non-Performing          and Problem Assets**

***Non-performing          assets***

----

*Index*

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **Year                          Ended December 31,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **2006**                                             |   |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **(Dollars                          in Thousands)**  |   |
| Non-Performing                          Assets:                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                                 |   |   |   |   |
| Non-Performing                          Loans                                                                                                         |   | $                                                    | 109    |   |   | $ | 183 |   |
| Foreclosed                          Assets                                                                                                            |   |                                                 | -      |   |   |   | 120 |   |
| Total                          Non-Performing                          Assets                                                                         |   | $                                                    | 109    |   |   | $ | 303 |   |
| Non-Performing                          Loans to Total                          Loans                                                                 |   |                                                 | 0.10   | % |   |   | 0.28 | % |
| Non-Performing                          Assets to Total Assets                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                                 | 0.08   | % |   |   | 0.24 | % |

|                                                                                                                                                                                       |   | **At                          December 31, 2006**   |   |   | **At                          December 31, 2005**             |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|--------|--------|---------------------------------------------------------------|--------|
|                                                                                                                                                                                       |   | **30                          – 89 Days**     |   |   | **90                          Days or More**                  |   |   | **30                          – 89 Days** |   |   | **90                          Days or More** |   |
|                                                                                                                                                                                       |   | **Number****of****Loans**                           |   |   | **Principal****Balance****of                          Loans** |   |   | **Number**** of****Loans** |   |   | **Principal****Balance****of                          Loans** |   |   | **Number****of**** Loans** |   |   | **Principal**** Balance****of                          Loans** |   |   | **Number****of****Loans** |   |   | **Principal**** Balance****of                          Loans** |   |
|                                                                                                                                                                                       |   | **(Dollars                          in Thousands)** |   |
| Real                          Estate Mortgage Loans:                                                                                                                                       |   |                                                |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-to-four                          family                                                                                                                                                |   |                                                | 11     |   |                                                          | $      | 1,932 |   |   |   | 1 |   |   | $ | 105 |   |   |   | 4 |   |   | $ | 248 |   |   |   | 2 |   |   | $ | 181 |   |
| Multi-family                              |   |                                                | -      |   |                                                          |   | - |   |   |   | - |   |   |   | - |   |   |   | -- |   |   |   | -- |   |   |   | 1 |   |   |   | 1 |   |
| Construction                              |   |                                                | 4      |   |                                                          |   | 766 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 280 |   |   |   | -- |   |   |   | -- |   |
| Home                          Equity and Home Improvement                                                                                                                                  |   |                                                | 4      |   |                                                          |   | 55 |   |   |   | - |   |   |   | - |   |   |   | 1 |   |   |   | 20 |   |   |   | -- |   |   |   | -- |   |
| Other                          Consumer Loans                                                                                                                                              |   |                                                | 12     |   |                                                          |   | 411 |   |   |   | 2 |   |   |   | 4 |   |   |   | 11 |   |   |   | 97 |   |   |   | 2 |   |   |   | 1 |   |
| Commercial                          Loans                                                                                                                                                  |   |                                                | 6      |   |                                                          |   | 239 |   |   |   | - |   |   |   | - |   |   |   | 7 |   |   |   | 693 |   |   |   | - |   |   |   | - |   |
| Total                                          |   |                                                | 37     |   |                                                          | $      | 3,403 |   |   |   | 3 |   |   | $ | 109 |   |   |   | 24 |   |   | $ | 1,338 |   |   |   | 5 |   |   | $ | 183 |   |
| Delinquent                          Loans to Total Loans                                                                                                                                   |   |                                                | 1.84   | %      |                                                          |   | 3.01 | % |   |   | 0.15 | % |   |   | 0.10 | % |   |   | 1.18 | % |   |   | 1.26 | % |   |   | 0.25 | % |   |   | 0.17 | % |

***Classified          assets***
*. *

----

*Index*

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **Year                          Ended December 31,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **2006**                                             |   |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **(In                          Thousands)**          |   |
| Substandard                          Loans                                                                                                |   | $                                                    | 3,649  |   |   | $ | 1,961 |   |
| Doubtful                          Loans                                                                                                   |   |                                                 | -      |   |   |   | -- |   |
| Loss                          Loans                                                                                                       |   |                                                 | 1      |   |   |   | 1 |   |
| Total                          Classified                          Loans                                                                                      |   | $                                                    | 3,650  |   |   | $ | 1,962 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                 |   |   |   |   |   |   |
| General                          Loss                          Allowance                                                                  |   | $                                                    | 631    |   |   | $ | 604 |   |
| Specific                          Loss                          Allowance                                                                 |   |                                                 | 305    |   |   |   | 322 |   |
| Total                          Allowances                                                                                                                     |   | $                                                    | 936    |   |   | $ | 926 |   |

**Allowance          for Loan Losses**

----

*Index*

***Summary          of Loan Loss Experience***

|                                                                                                            |   | **Year                        Ended December 31,** |   |
|-----------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                                                                            |   | **2006**                                           |   |   | **2005** |   |
|                                                                                                            |   | **(Dollars                        in Thousands)**  |   |
|                                                                                                            |   |                                               |   |   |   |   |
| Balance                        at Beginning of Period                                                           |   | $                                                  | 926    |   |   | $ | 1,012 |   |
| Charge-Offs:                                                                                                    |   |                                               |   |   |   |   |   |   |
| One-to                        four-family Mortgage                        Loans                                 |   |                                               | 22     |   |   |   | 15 |   |
| Consumer                        Loans                                                                           |   |                                               | 16     |   |   |   | 43 |   |
| Commercial                        Loans                                                                         |   |                                               | 2      |   |   |   | 43 |   |
| Total                        Charge-Offs                                                                        |   |                                               | 40     |   |   |   | 101 |   |
|                                                                                                            |   |                                               |   |   |   |   |   |   |
| Recoveries:                                                                                                     |   |                                               |   |   |   |   |   |   |
| One-to                        four-family Mortgage                        Loans                                 |   |                                               | -      |   |   |   | --- |   |
| Consumer                        Loans                                                                           |   |                                               | 5      |   |   |   | 14 |   |
| Commercial                        Loans                                                                         |   |                                               | -      |   |   |   | 1 |   |
| Total                        Recoveries                                                                         |   |                                               | 5      |   |   |   | 15 |   |
|                                                                                                            |   |                                               |   |   |   |   |   |   |
| Net                        Charge-Offs                                                                          |   |                                               | 35     |   |   |   | 86 |   |
|                                                                                                            |   |                                               |   |   |   |   |   |   |
| Provision                        for Losses on Loans                                                            |   |                                               | 45     |   |   |   | --- |   |
|                                                                                                            |   |                                               |   |   |   |   |   |   |
| Balance                        End of Period                                                                    |   | $                                                  | 936    |   |   | $ | 926 |   |
|                                                                                                            |   |                                               |   |   |   |   |   |   |
| Allowance                        for Loan Losses as a Percent of Total Loss Outstanding                         |   |                                               | 0.83   | % |   |   | 0.87 | % |
|                                                                                                            |   |                                               |   |   |   |   |   |   |
| Ratio                        of Net Charge-Offs during year to Average Loans                        Outstanding |   |                                               | 0.03   | % |   |   | 0.08 | % |

----

*Index*

***Allocation          of Allowance for Loan Losses***

|                                                                                                                                                                                                                                                                                                                                                                                                    |   | **At                        December 31,** |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                    |   | **2006**                                   |   |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                    |   | **Amount**                                 |   |   | **Percent                        of****Loans                        in****Each****Category                        to****Total                        Loans** |   |   | **Amount** |   |   | **Percent                        of**** Loans                        in****Each****Category                        to****Total                        Loans** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                       |   |   | **(Dollars                        in Thousands)** |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Balance                        at End of Period Applicable to:                                                                                                                                                                                                                                                                                                                                          |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Land                                                                                                                           |   | $                                          | --     |   |   |   | 6.07 | % |   | $ | -- |   |   |   | 1.30 | % |
| Real                        Estate Mortgage Loans:                                                                                                                                                                                                                                                                                                                                                      |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| One-                        to                        Four-Family                                                              |   |                                       | 300    |   |   |   | 48.75 |   |   |   | 127 |   |   |   | 51.53 |   |
| Commercial                        and                        Multi-family                                                      |   |                                       | 342    |   |   |   | 23.78 |   |   |   | 202 |   |   |   | 19.64 |   |
| Construction                        Loans                                                                                      |   |                                       | 25     |   |   |   | 6.30 |   |   |   | 21 |   |   |   | 4.21 |   |
| Home                        Equity and Home                        Improvements                                                                                                                                                                                                                                                                                                                         |   |                                       | 9      |   |   |   | 3.45 |   |   |   | 1 |   |   |   | 3.92 |   |
| Other                        Consumer                        Loans                                                             |   |                                       | 141    |   |   |   | 5.57 |   |   |   | 151 |   |   |   | 6.19 |   |
| Commercial                        Loans                                                                                        |   |                                       | 103    |   |   |   | 6.08 |   |   |   | 391 |   |   |   | 13.21 |   |
| Unallocated                                                                                                                    |   |                                       | 16     |   |   |   | -- |   |   |   | 33 |   |   |   | -- |   |
| Total                                                                                                                                         |   | $                                          | 936    |   |   |   | 100.00 | % |   | $ | 926 |   |   |   | 100.00 | % |

**Other          Sources of Revenue**

***Trust          Services***

***Credit          Card Underwriting***

***Other          Fees***

**Investments          and Federal Home Loan Bank Stock**

----

*Index*

|                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **At                            December 31,** |           |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|----------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **2006**                                  |  **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                  |   | **Amortized****Cost**                          |           |   | **Fair                            Value** |   |   | **Amortized****Cost** |   |   | **Fair                            Value** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                           |           |   | **(In                            Thousands)** |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                           |           |   |   |   |   |   |   |   |   |   |
| Held                            to                            Maturity:                                                                                                                                                                                                                                                                                                                                               |   |                                           |           |   |   |   |   |   |   |   |   |   |
| Agency                            and Treasury                            Securities                                                                                                                                                                                                                                                                                                                                  |   | $                                              | 2,383          |   |   | $ | 2,380 |   |   | $ | 5,289 |   |   | $ | 5,256 |   |
| State                            and                            Municipal                                                                                        |   |                                           | 400            |   |   |   | 392 |   |   |   | 400 |   |   |   | 394 |   |
| Mortgage                            Backed                            Securities                                                                                 |   |                                           | 2,001          |   |   |   | 1,969 |   |   |   | 2,580 |   |   |   | 2,538 |   |
| Corporate                            Obligations                                                                                                                 |   |                                           | 425            |   |   |   | 418 |   |   |   | 941 |   |   |   | 936 |   |
| FHLB                            Stock                            (1)                                                                    |   |                                           | 1,255          |   |   |   | 1,255 |   |   |   | 1,041 |   |   |   | 1,041 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                           |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                            Investment                            Securities                                                       |   | $                                              | 6,464          |   |   | $ | 6,414 |   |   | $ | 10,251 |   |   | $ | 10,165 |   |
| _____________________                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                           |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)                            Market value is based on the price at which the stock                            may be resold to the                            FHLB of Indianapolis.                                                                                                                                                                                                                                 |   |

**Sources          of Funds**

***General***
**.**

***Deposits***

----

*Index*

| **Type                                of Account**                                                                                                                                                                                                                                                                                                                    |  **Balance                                at****December                                31, 2006**  |  **%                                of Deposits**  |  **Weighted****Average                                Rate**  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------|-------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                          | **(Dollars                                in Thousands)**    |                                                                    |
| Withdrawable:                                                                                                                                                                                                                                                                                                                                                         |                                                                                                          |                                                         |                                                                    |   |   |   |   |   |   |
| Non-Interest                                Bearing                                Demand                                                                                                                                                                                                                                                                             |                                                                                                          | $                                                            | 9,590                                                                   |   |   |   | 10.83 | % |   |   | 0.00 | % |
| Savings,                                NOW and Money                                Market                                                                                                                                                                                                                                                                           |                                                                                                          |                                                         | 40,085                                                                  |   |   |   | 45.26 |   |   |   | 2.01 |   |
| Total                                Withdrawable                                                                                         |                                                                                                          | $                                                            | 49,675                                                                  |   |   |   | 56.09 | % |   |   | 1.58 | % |
|                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                          |                                                         |                                                                    |   |   |   |   |   |   |   |   |   |
| Certificates                                (Original Terms):                                                                                                                                                                                                                                                                                                         |                                                                                                          |                                                         |                                                                    |   |   |   |   |   |   |   |   |   |
| 91                                Day                                                                                 |                                                                                                          | $                                                            | 432                                                                     |   |   |   | 0.49 | % |   |   | 3.52 | % |
| 182                                Day                                                                                |                                                                                                          |                                                         | 1,249                                                                   |   |   |   | 1.41 |   |   |   | 4.09 |   |
| Short                                Term                                                                             |                                                                                                          |                                                         | 60                                                                      |   |   |   | 0.07 |   |   |   | 5.12 |   |
| 5                                Month                                                                                |                                                                                                          |                                                         | 177                                                                     |   |   |   | 0.20 |   |   |   | 5.25 |   |
| 11                                Month                                                                               |                                                                                                          |                                                         | 6,210                                                                   |   |   |   | 7.01 |   |   |   | 5.25 |   |
| 12                                Month                                                                               |                                                                                                          |                                                         | 5,593                                                                   |   |   |   | 6.31 |   |   |   | 4.35 |   |
| 15                                Month                                                                               |                                                                                                          |                                                         | 1,685                                                                   |   |   |   | 1.90 |   |   |   | 3.95 |   |
| 18                                Month                                                                               |                                                                                                          |                                                         | 2,980                                                                   |   |   |   | 3.36 |   |   |   | 4.18 |   |
| 22                                Month                                                                               |                                                                                                          |                                                         | 3,478                                                                   |   |   |   | 3.93 |   |   |   | 5.33 |   |
| 24                                Month                                                                               |                                                                                                          |                                                         | 4,498                                                                   |   |   |   | 5.08 |   |   |   | 4.00 |   |
| 30                                Month                                                                               |                                                                                                          |                                                         | 1,517                                                                   |   |   |   | 1.71 |   |   |   | 3.51 |   |
| 36                                Month                                                                               |                                                                                                          |                                                         | 2,068                                                                   |   |   |   | 2.33 |   |   |   | 3.80 |   |
| 42                                Month                                                                               |                                                                                                          |                                                         | 13                                                                      |   |   |   | 0.01 |   |   |   | 4.57 |   |
| 48                                Month                                                                               |                                                                                                          |                                                         | 715                                                                     |   |   |   | 0.81 |   |   |   | 3.84 |   |
| 60                                Month                                                                               |                                                                                                          |                                                         | 4,125                                                                   |   |   |   | 4.67 |   |   |   | 4.47 |   |
| IRA                                                                                                                   |                                                                                                          |                                                         | 4,093                                                                   |   |   |   | 4.62 |   |   |   | 4.13 |   |
|                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                          |                                                         |                                                                    |   |   |   |   |   |   |   |   |   |
| Total                                Certificates                                                                                         |                                                                                                          | $                                                            | 38,893                                                                  |   |   |   | 43.91 | % |   |   | 4.42 | % |
|                                                                                                                                                                                                                                                                                                                                                                  |                                                                                                          |                                                         |                                                                    |   |   |   |   |   |   |   |   |   |
| Total                                Deposits                                                     |                                                                                                          | $                                                            | 88,568                                                                  |   |   |   | 100.00 | % |   |   | 2.79 | % |

----

*Index*

|                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **At                        December 31,** |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **2006**                                   |    |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   | **(In                        Thousands)**  |    |
| 1.00%                        to                        1.99%                                                                 |   | $                                          | — |   |   | $ | 414 |   |
| 2.00%                        to                        2.99%                                                                 |   |                                       | 1,218   |   |   |   | 12,455 |   |
| 3.00%                        to                        3.99%                                                                 |   |                                       | 10,837  |   |   |   | 15,741 |   |
| 4.00%                        to                        4.99%                                                                 |   |                                       | 13,631  |   |   |   | 4,590 |   |
| 5.00%                        to                        5.99%                                                                 |   |                                       | 13,032  |   |   |   | 865 |   |
| 6.00%                        to                        8.00%                                                                 |   |                                       | 175     |   |   |   | 63 |   |
| Total                                                                                                                                            |   | $                                          | 38,893  |   |   | $ | 34,129 |   |

|                                                                                                                                                                                                                                                                                                                                                                               |   | **Amounts                                at December 31, 2006**                       |   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                               |   | **One                                Year****or                                Less** |   |   | **Two****Years** |   |   | **Three****Years** |   |   | **Greater****Than                                Three****Years** |   |
|                                                                                                                                                                                                                                                                                                                                                                               |   | **(In                                Thousands)**                                     |   |
| 2.00%                                to                                2.99%                                                  |   | $                                                                                     | 1,172  |   |   | $ | 41 |   |   | $ | — |   |   | $ | 5 |   |
| 3.00%                                to                                3.99%                                                  |   |                                                                                  | 8,216  |   |   |   | 1,731 |   |   |   | 816 |   |   |   | 74 |   |
| 4.00%                                to                                4.99%                                                  |   |                                                                                  | 7,404  |   |   |   | 4,647 |   |   |   | 878 |   |   |   | 702 |   |
| 5.00%                                to                                5.99%                                                  |   |                                                                                  | 7,781  |   |   |   | 4,429 |   |   |   | 99 |   |   |   | 723 |   |
| 6.00%                                to                                8.00%                                                  |   |                                                                                  | 175    |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Total                                                                                                                                             |   | $                                                                                     | 24,748 |   |   | $ | 10,848 |   |   | $ | 1,793 |   |   | $ | 1,504 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  **At                                December 31, 2006**  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                | **(In                                Thousands)** |   |
| Maturity                                Period                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |                                                                |   |   |
| Three                                Months or                                Less                                                                         |                                                                | $ | 1,523 |   |
| Greater                                than Three Months through                                Six Months                                                                                                                                                                                                                                                                                                                                                                                                                         |                                                                |   | 1,793 |   |
| Greater                                than Six Months through                                Twelve Months                                                                                                                                                                                                                                                                                                                                                                                                                        |                                                                |   | 1,721 |   |
| Over                                Twelve                                Months                                                                           |                                                                |   | 3,242 |   |
| Total                                                                                                                                                                          |                                                                | $ | 8,279 |   |

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **Year                          Ended December 31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **2006**                                             |   |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **(In                          Thousands)**          |   |
| Beginning                          Balance                                                                                    |   | $                                                    | 34,129 |   |   | $ | 35,572 |   |
| Net                          Deposits                                                                                                   |   |                                                 | 3,492  |   |   |   | (2,971 | ) |
| Interest                          Credited                                                                                              |   |                                                 | 1,272  |   |   |   | 1,528 |   |
| Net                          Increase in                          Deposits                                                              |   |                                                 | 4,764  |   |   |   | (1,443 | ) |
| Ending                          Balance                                                                                       |   | $                                                    | 38,893 |   |   | $ | 34,129 |   |

----

*Index*

***Borrowings***
**.**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **Year                        Ended December 31,** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **2006**                                           |   |   | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | **(Dollars                        in Thousands)**  |   |
| FHLB                        Advances                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                               |   |   |   |   |
| Outstanding                        at End of                        Period                                                               |   | $                                                  | 24,600 |   |   | $ | 16,500 |   |
| Average                        Balance Outstanding for                        Period                                                                                                                                                                                                                                                                                                                                                                           |   |                                               | 20,812 |   |   |   | 16,581 |   |
| Maximum                        Amount Outstanding at                        any Month-End During the Period                                                                                                                                                                                                                                                                                                                                                    |   |                                               | 24,600 |   |   |   | 18,000 |   |
| Weighted                        Average Interest Rate                        During the Period                                                                                                                                                                                                                                                                                                                                                                 |   |                                               | 4.57   | % |   |   | 4.02 | % |
| Weighted                        Average Interest Rate at                        End of Period                                                                                                                                                                                                                                                                                                                                                                  |   |                                               | 4.62   | % |   |   | 3.95 | % |

|                                                                                                                                                                                                                                                                                                               |   | **Amounts                        at December 31, 2006** |    |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|---------|
|                                                                                                                                                                                                                                                                                                               |   |                                                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                               |   | **2007**                                                |    |   | **2008** |   |   | **2009** |   |   | **2010** |   |   | **2011****thru****2012** |   |
|                                                                                                                                                                                                                                                                                                               |   | **(In                        Thousands)**               |    |
| 3.00%                        to                        3.99%                                          |   | $                                                       | 3,000   |   |   | $ | 500 |   |   | $ | 2,500 |   |   | $ | 1,000 |   |   | $ | 1,000 |   |
| 4.00%                        to                        4.99%                                          |   |                                                    | — |   |   |   | 6,500 |   |   |   | — |   |   |   | 1,000 |   |   |   | 1,500 |   |
| 5.00%                        to                        5.99%                                          |   |                                                    | 1,000   |   |   |   | 2,000 |   |   |   | 2,100 |   |   |   | 1,000 |   |   |   | 1,500 |   |
| Total                                                                                                                     |   | $                                                       | 4,000   |   |   | $ | 9,000 |   |   | $ | 4,600 |   |   | $ | 3,000 |   |   | $ | 4,000 |   |

**Service          Corporation Subsidiary**

**Employees**

----

*Index*

**Competition**

**Regulation**

***Bank          Holding Company Regulation***

----

*Index*

***Capital          Adequacy Guidelines for Bank Holding Companies***

***Bank          Regulation***

**Federal          Home Loan Bank System**

----

*Index*

**Insurance          of Deposits**

***Deposit          Insurance***

***Insurance          of Deposit Accounts.***
* *

**Bank          Regulatory Capital**

----

*Index*

**Prompt          Corrective Regulatory Action**

**Dividend          Limitations**

----

*Index*

**Repurchase          Limitations**

**Loans-to-One          Borrower**

**Limitations          on Rates Paid for Deposits**

----

*Index*

**Federal          Reserve System**

**Additional          Limitations on Activities**

**Other          Indiana Regulations**

----

*Index*

**Safety          and Soundness Standards**

**Transactions          with Affiliates**

**Federal          Securities Law**

----

*Index*

**Community          Reinvestment Act Matters**

**Sarbanes-Oxley          Act of 2002**

**Taxation**

***Federal          Taxation***
*.*

----

*Index*

***State          Taxation***

**ITEM          2.                DESCRIPTION          OF PROPERTY.**

----

*Index*

| **Description                    and Address**                   | **Owned                    or****Leased** | **Lease****Expiration****Date** | **Year****Opened** | **Net                    Book****Value                    of****Property,****Furniture                    &****Fixtures(3)** |
|------------------------------------------------------------------|-------------------------------------------|---------------------------------|--------------------|----------------------------------------------------------------------------------------------------------------------------------|
| Main                    Office                                   |                                      |                            |               |                                                                                                                             |
| 80                    East Jefferson                    Street   | Owned                                     | N/A                             | 1890               | $    818,370                                                                                                 |
| Main                    Street Office                            |                                      |                            |               |                                                                                                                             |
| 1124                    North Main                    Street     | Owned                                     | N/A                             | 1995               | $    987,131                                                                                                 |
| Methodist                    Community                           |                                      |                            |               |                                                                                                                             |
| 1070                    West Jefferson                    Street | Leased                                    | 2009(1)                         | 1997               | $        6,171                                                                           |
| Trafalgar                    Office                              |                                      |                            |               |                                                                                                                             |
| 2                    Trafalgar                    Square         | Owned                                     | N/A                             | 1993               | $    350,105                                                                                                 |
| Nineveh                    Office                                |                                      |                            |               |                                                                                                                             |
| 7459                    South Nineveh                    Road    | Leased                                    | 2007(2)                         | 2001               | $      15,709                                                                                      |
| Franklin                    Central Office                       |                                      |                            |               |                                                                                                                             |
| 5630                    South Franklin                    Road   | Owned                                     | N/A                             | 2006               | $                    1,406,738                                                                                                   |

|   | (1) | The                    lease is for a term of five years commencing on September 1,                    2004. |
|--------|-----|--------------------------------------------------------------------------------------------------------------|

|   | (2) | The                    current lease expired as of December 31, 2006.  The Bank will                    pay rent on a month-to-month basis until a new lease is signed                    by both                    parties. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The                    above table excludes $743,435 for land purchased for future use                    and the                    Bank’s data processing equipment. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM          3.                LEGAL          PROCEEDINGS.**

**ITEM          4.                SUBMISSION          OF MATTERS TO A VOTE OF SECURITY HOLDERS.**

**PART          II**

| **ITEM                    5.** | **MARKET                    FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESS                    ISSUER                    PURCHASES OF EQUITY                    SECURITIES.** |
|--------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Index*

**Shareholder Annual Report**

| **ITEM                    6.** | **MANAGEMENT’S  DISCUSSION                      AND ANALYSIS OR PLAN OF                      OPERATION.** |
|--------------------------------|---------------------------------------------------------------------------------------------------------------------------|

**Asset/Liability          Management**

**NPV**

----

*Index*

| **2006**                         | **2006**                                   |                            | **2006**                                        |
|----------------------------------|--------------------------------------------|---------------------------------|-------------------------------------------------|
| **Change                    in** | **Net                    Portfolio Value** | **2006**                        | **NPV                    as % of PV of Assets** |
| **Rates**                        | **$                    Amount**            | **$                    Change** |                                            | **%                    Change** | **NPV                    Ratio** | **Change** |
| +300                    b.p.*    | $ 9,792                               | $ (1,914)                  |                                            | (16.4)% | 8.02% | (1.47)% |
| 0                    b.p.        | 11,706                                     |                            |                                            |   | 9.00% |   |
| -300                    b.p.     | 10,707                                     |    (999)         |                                            |  (  8.5)% | 7.87% | (0.77)    |

| **2005**                         | **2005**                                   |                              | **2005**                                        |
|----------------------------------|--------------------------------------------|-----------------------------------|-------------------------------------------------|
| **Change                    in** | **Net                    Portfolio Value** | **2005**                          | **NPV                    as % of PV of Assets** |
| **Rates**                        | **$                    Amount**            | **$                    Change**   |                                            | **%                    Change** | **NPV                    Ratio** | **Change** |
| +300                    b.p.*    | $ 9,769                               | $ (2,250)                    |                                            | (18.7)% |                       8.51% | (1.83)% |
| 0                    b.p.        | 12,019                                     |                              |                                            |   | 9.78 |   |
| -300                    b.p.     | 10,593                                     |                      (1,426) |                                            | (11.9) | 8.25 | (1.16)    |

**ITEM          7.                  FINANCIAL          STATEMENTS.**

| **Financial                    Statements**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | **Annual                    Report****Page                    No.** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|
| Report                    of Independent Registered Public Accounting                    Firm                                                                                                     | **17**                                                              |
| Consolidated                    Balance Sheets at December 31, 2006 and 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | **18**                                                              |
| Consolidated                    Statements of Income for the Years Ended December 31, 2006                    and 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           | **19**                                                              |
| Consolidated                    Statements of Stockholders’ Equity for the Years Ended December 31,                    2006 and 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       | **20**                                                              |
| Consolidated                    Statements of Cash Flows for the Years Ended December 31,                    2006                    and 2005                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    | **21**                                                              |
| Notes                    to Consolidated Financial                    Statements                                                                                                                  | **22**                                                              |

----

*Index*

**ITEM          8.                  CHANGES          IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL          DISCLOSURE.**

**ITEM          8A.               CONTROLS          AND PROCEDURES.**

**Evaluation          of disclosure controls and procedures**
**Evaluation Date**

**Changes          in internal controls**

**ITEM          8B.                OTHER          INFORMATION.**

**PART          III**

| **ITEM                    9.** | **DIRECTORS,                    EXECUTIVE OFFICERS, PROMOTERS, CONTROL PERSONS AND CORPORATE                    GOVERNANCE;                    COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE                    ACT.** |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM          10.                EXECUTIVE          COMPENSATION.**

| **ITEM11.** | **SECURITY                    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED                    STOCKHOLDER MATTERS.** |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------|

| **ITEM12.** | **CERTAIN                    RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR                    INDEPENDENCE.** |
|-------------|---------------------------------------------------------------------------------------------------------------------|

----

*Index*

**ITEM          13.                EXHIBITS.**

| **EXHIBIT                      NO.** | **DESCRIPTION**                                                                                                                                                                                                                                                                                                          |
|--------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 3(1)                                 | Registrant’s                      Articles of Incorporation are incorporated by reference to                      Exhibit 3(1) to                      the Registration Statement on Form SB-2 (Registration No. 333-113691)                      (the                      “Registration Statement”). |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 3(2)                                 | Registrant’s                      Amended Code of By-Laws is incorporated by reference to Exhibit                      3(1) to                      the Registrant’s Form 10-QSB for the quarter ended September 30,                      2004.                                                         |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 3(3)                                 | Bylaw                      amendment                                                                                                                                                                                                                                                                                     |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 10(1)                                | Third                      Century Stock Option Plan is incorporated by reference to Exhibit                      10(1) to                      the Registration Statement.                                                                                                                                              |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 10(2)                                | Mutual                      Savings Bank Recognition and Retention Plan and Trust is incorporated                      by                      reference to Exhibit 10(2) to the Registration                      Statement.                                                                                            |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 10(3)                                | Employment                      Agreement between Mutual Savings Bank and Robert D. Heuchan                      is                      incorporated by reference to Exhibit 10(3) to the Registration                      Statement.                                                                                  |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 10(4)                                | Employment                      Agreement between Mutual Savings Bank and David A. Coffey is                      incorporated                      by reference to Exhibit 10(4) to the Registration                      Statement.                                                                                    |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 10(5)                                | Third                      Century Bancorp Employee Stock Ownership Plan and Trust Agreement                      is                      incorporated by reference to Exhibit 10(5) to the Registration                      Statement.                                                                                 |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 10(6)                                | Service                      Agreement with Intrieve, Incorporated is incorporated by reference                      to                      Exhibit 10(6) to the Registration Statement.                                                                                                                                |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 10(7)                                | Exempt                      Loan and Share Purchase Agreement is incorporated by reference                      to the                      Annual Report on Form 10-KSB for the year ended December 31,                      2004.                                                                                      |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 13                                   | 2006                      Shareholder Annual Report                                                                                                                                                                                                                                                                      |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 14                                   | Code                      of Ethics is incorporated by reference to the Annual Report                      on Form 10-KSB                      for the year ended December 31, 2004.                                                                                                                                     |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 21                                   | Subsidiaries                      of the Registrant is incorporated by reference to the Annual                      Report on                      Form 10-KSB for the year ended December 31, 2005.                                                                                                                     |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 23                                   | Consent                      of BKD, LLP                                                                                                                                                                                                                                                                                 |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 31(1)                                | Chief                      Executive Officer Certification                                                                                                                                                                                                                                                               |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 31(2)                                | Chief                      Financial Officer Certification                                                                                                                                                                                                                                                               |
|                                 |                                                                                                                                                                                                                                                                                                                     |
| 32                                   | Section                      906 Certification                                                                                                                                                                                                                                                                           |

**ITEM          14.                PRINCIPAL          ACCOUNTANT FEES AND SERVICES.**

----

*Index*

**SIGNATURES**

|                                                      | THIRD                      CENTURY BANCORP |
|-----------------------------------------------------------|--------------------------------------------|
|                                                      |                                       |   |
|                                                      |                                       |   |
| Date:  March 21,                      2007 | By:                                        | /s/                      Robert D. Heuchan |
|                                                      |                                       | Robert                      D. Heuchan, President and |
|                                                      |                                       | Chief                      Executive Officer |

| **Signatures**                                  |   | **Title**                                                                                                |   | **Date**                              |
|-------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|---------------------------------------|
|                                            |   |                                                                                                     |   |                                  |
|                                            |   |                                                                                                     |   |                                  |
| /s/                        Robert D. Heuchan    |   | President,                        Chief Executive Officer                                                |   |                                  |
| Robert                        D. Heuchan        |   | and                        Director                                                                      |   | March                        21, 2007 |
|                                            |   |                                                                                                     |   |                                  |
| /s/                        Debra K. Harlow      |   | Chief                        Financial Officer(Principal                        Financial and Accounting |   |                                  |
| Debra                        K. Harlow          |   | Officer)                                                                                                 |   | March                        21, 2007 |
|                                            |   |                                                                                                     |   |                                  |
|                                            |   |                                                                                                     |   |                                  |
| /s/                        David A. Coffey      |   |                                                                                                     |   |                                  |
| David                        A. Coffey          |   | Director                                                                                                 |   | March                        21, 2007 |
|                                            |   |                                                                                                     |   |                                  |
| /s/                        Robert L. Ellett     |   |                                                                                                     |   |                                  |
| Robert                        L. Ellett         |   | Director                                                                                                 |   | March                        21, 2007 |
|                                            |   |                                                                                                     |   |                                  |
| /s/                        Jerry D. Petro       |   |                                                                                                     |   |                                  |
| Jerry                        D. Petro           |   | Director                                                                                                 |   | March                        21, 2007 |
|                                            |   |                                                                                                     |   |                                  |
| /s/                        Robert D. Schafstall |   |                                                                                                     |   |                                  |
| Robert                        D. Schafstall     |   | Director                                                                                                 |   | March                        21, 2007 |
|                                            |   |                                                                                                     |   |                                  |

----

*Index*

**EXHIBIT          INDEX**

| **EXHIBIT                        NO.** | **DESCRIPTION**                                                                                                                                                                                                                                                                                                                    |   |
|----------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 3(1)                                   | Registrant’s                        Articles of Incorporation are incorporated by reference to                        Exhibit 3(1) to                        the Registration Statement on Form SB-2 (Registration No.                        333-113691) (the                        “Registration Statement”). |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 3(2)                                   | Registrant’s                        Amended Code of By-Laws is incorporated by reference to Exhibit                        3(1) to                        the Registrant’s Form 10-QSB for the quarter ended September 30,                        2004.                                                           |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 3(3)                                   | Bylaw                        amendment                                                                                                                                                                                                                                                                                             |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 10(1)                                  | Third                        Century Stock Option Plan is incorporated by reference to                        Exhibit 10(1) to                        the Registration Statement.                                                                                                                                                  |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 10(2)                                  | Mutual                        Savings Bank Recognition and Retention Plan and Trust is                        incorporated by                        reference to Exhibit 10(2) to the Registration Statement.                                                                                                                     |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 10(3)                                  | Employment                        Agreement between Mutual Savings Bank and Robert D. Heuchan                        is                        incorporated by reference to Exhibit 10(3) to the Registration                        Statement.                                                                                    |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 10(4)                                  | Employment                        Agreement between Mutual Savings Bank and David A. Coffey                        is incorporated                        by reference to Exhibit 10(4) to the Registration                        Statement.                                                                                      |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 10(5)                                  | Third                        Century Bancorp Employee Stock Ownership Plan and Trust Agreement                        is                        incorporated by reference to Exhibit 10(5) to the Registration                        Statement.                                                                                   |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 10(6)                                  | Service                        Agreement with Intrieve, Incorporated is incorporated by                        reference to                        Exhibit 10(6) to the Registration Statement.                                                                                                                                    |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 10(7)                                  | Exempt                        Loan and Share Purchase Agreement is incorporated by reference                        to the                        Annual Report on Form 10-KSB for the year ended December                        31,                        2004.                                                                 |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 13                                     | 2006                        Shareholder Annual Report                                                                                                                                                                                                                                                                              |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 14                                     | Code                        of Ethics is incorporated by reference to the Annual Report                        on Form 10-KSB                        for the year ended December 31, 2004.                                                                                                                                         |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 21                                     | Subsidiaries                        of the Registrant is incorporated by reference to the Annual                        Report on                        Form 10-KSB for the year ended December 31, 2005.                                                                                                                         |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 23                                     | Consent                        of BKD, LLP                                                                                                                                                                                                                                                                                         |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 31(1)                                  | Chief                        Executive Officer Certification                                                                                                                                                                                                                                                                       |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 31(2)                                  | Chief                        Financial Officer Certification                                                                                                                                                                                                                                                                       |   |
|                                   |                                                                                                                                                                                                                                                                                                                               |   |
| 32                                     | Section                        906 Certification                                                                                                                                                                                                                                                                                   |   |