----

| MISSISSIPPI          |   | 64-0862173                           |
|--------------------------------|--------|--------------------------------------|
| (STATE OF INCORPORATION)  |   | (I.R.S. EMPLOYER IDENTIFICATION NO.) |

| 6480 U.S. HIGHWAY 98 WEST |   |       |
|---------------------------|--------|------------|
| HATTIESBURG, MISSISSIPPI  |   | 39402      |
| (ADDRESS OF PRINCIPAL     |   | (ZIP CODE) |
| EXECUTIVE OFFICES)        |   |       |

|   | (601) 268-8998                                   |   |
|--------|--------------------------------------------------|--------|
|   | (ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE) |   |

|                                                                                                           | NONE |   |
|----------------------------------------------------------------------------------------------------------------|------|--------|
|        (FORMER NAME, ADDRESS AND FISCAL YEAR, IF CHANGED SINCE LAST REPORT) |

| LARGE ACCELERATED FILER  o | ACCELERATED FILER o | NON-ACCELERATED FILER x |
|---------------------------------|---------------------|-------------------------|

----

|                                              |   | (Unaudited) |    |   |         |   |
|---------------------------------------------------|--------|-------------|---------|--------|--------------|--------|
|                                              |   | March 31,   |    |   | December 31, |   |
| ASSETS                                            |   | 2011        |    |   | 2010         |   |
|                                              |   |        |    |   |         |   |
| Cash and due from banks                           |   | $           | 8,835   |   |         | $      | 12,450 |   |
| Interest-bearing deposits with banks              |   |        | 50,373  |   |         |   | 12,443 |   |
| Federal funds sold                                |   |        | 5,002   |   |         |   | 9,083 |   |
|                                              |   |        |    |   |         |   |   |   |
|    Total cash and cash equivalents |   |        | 64,210  |   |         |   | 33,976 |   |
|                                              |   |        |    |   |         |   |   |   |
| Securities held-to-maturity, at amortized cost    |   |        | 3       |   |         |   | 3 |   |
| Securities available-for-sale, at fair value      |   |        | 107,403 |   |         |   | 104,534 |   |
| Other securities                                  |   |        | 2,600   |   |         |   | 2,599 |   |
|                                              |   |        |    |   |         |   |   |   |
|    Total securities                |   |        | 110,006 |   |         |   | 107,136 |   |
|                                              |   |        |    |   |         |   |   |   |
| Loans held for sale                               |   |        | 1,913   |   |         |   | 2,938 |   |
| Loans                                             |   |        | 334,879 |   |         |   | 329,635 |   |
| Allowance for loan losses                         |   |        | (4,302  | )      |         |   | (4,617 | ) |
|                                              |   |        |    |   |         |   |   |   |
|    Loans, net                      |   |        | 332,490 |   |         |   | 327,956 |   |
|                                              |   |        |    |   |         |   |   |   |
| Premises and equipment                            |   |        | 15,374  |   |         |   | 14,994 |   |
| Interest receivable                               |   |        | 2,018   |   |         |   | 2,023 |   |
| Cash surrender value of life insurance            |   |        | 6,130   |   |         |   | 6,084 |   |
| Goodwill                                          |   |        | 702     |   |         |   | 702 |   |
| Other assets                                      |   |        | 10,324  |   |         |   | 10,174 |   |
|                                              |   |        |    |   |         |   |   |   |
|                                              |   | $           | 541,254 |   |         | $      | 503,045 |   |

| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                          |   |   |    |   |   |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                                                                                                |   |   |    |   |   |   |
| LIABILITIES:                                                                                                                                                        |   |   |    |   |   |   |
|    Deposits:                                                                                                                                         |   |   |    |   |   |   |
|       Noninterest-bearing                                                                                                             |   | $      | 51,128  |   |   | $      | 48,312 |   |
|       Interest-bearing                                                                                                                |   |   | 383,536 |   |   |   | 348,167 |   |
|                                                                                                                                                                |   |   |    |   |   |   |   |   |
|          TOTAL DEPOSITS                                                                                                |   |   | 434,664 |   |   |   | 396,479 |   |
|                                                                                                                                                                |   |   |    |   |   |   |   |   |
|    Interest payable                                                                                                                                  |   |   | 387     |   |   |   | 411 |   |
|    Borrowed funds                                                                                                                                    |   |   | 30,088  |   |   |   | 30,107 |   |
|    Subordinated debentures                                                                                                                           |   |   | 10,310  |   |   |   | 10,310 |   |
|    Other liabilities                                                                                                                                 |   |   | 8,198   |   |   |   | 8,639 |   |
|                                                                                                                                                                |   |   |    |   |   |   |   |   |
|           TOTAL LIABILITIES                                                                                       |   |   | 483,647 |   |   |   | 445,946 |   |
|                                                                                                                                                                |   |   |    |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY:                                                                                                                                         |   |   |    |   |   |   |   |   |
| Preferred stock, no par value, $1,000 per share liquidation, 10,000,000 shares authorized; 17,123 issued and outstanding at March 31, 2011 and at December 31, 2010 |   |   | 16,939  |   |   |   | 16,939 |   |
| Common stock, par value $1 per share, 10,000 shares authorized; 3,092,566 and 3,058,716 shares issued at March 31, 2011 and at December 31, 2010                    |   |   | 3,093   |   |   |   | 3,059 |   |
| Additional paid-in capital                                                                                                                                          |   |   | 23,408  |   |   |   | 23,419 |   |
| Retained earnings                                                                                                                                                   |   |   | 15,023  |   |   |   | 14,723 |   |
| Accumulated other comprehensive loss                                                                                                                                |   |   | (392    | )      |   |   | (577 | ) |
| Treasury stock, at cost, 26,494 shares at March 31, 2011 and at December 31, 2010                                                                                   |   |   | (464    | )      |   |   | (464 | ) |
|                                                                                                                                                                |   |   |    |   |   |   |   |   |
|           TOTAL STOCKHOLDERS’ EQUITY                                                                        |   |   | 57,607  |   |   |   | 57,099 |   |
|                                                                                                                                                                |   | $      | 541,254 |   |   | $      | 503,045 |   |

----

|                                                           |   | (Unaudited) Three Months Ended March 31, |      |
|----------------------------------------------------------------|--------|------------------------------------------|-----------|
|                                                           |   | 2011                                     |      |   | 2010 |   |
| INTEREST INCOME:                                               |   |                                     |      |   |   |   |
| Interest and fees on loans                                     |   | $                                        | 5,014     |   |   | $ | 5,010 |   |
| Interest and dividends on securities:                          |   |                                     |      |   |   |   |   |   |
| Taxable interest and dividends                                 |   |                                     | 370       |   |   |   | 568 |   |
| Tax exempt interest                                            |   |                                     | 330       |   |   |   | 301 |   |
| Interest on federal funds sold                                 |   |                                     | 19        |   |   |   | 5 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| TOTAL INTEREST INCOME                                          |   |                                     | 5,733     |   |   |   | 5,884 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| INTEREST EXPENSE:                                              |   |                                     |      |   |   |   |   |   |
| Interest on deposits                                           |   |                                     | 1,181     |   |   |   | 1,727 |   |
| Interest on borrowed funds                                     |   |                                     | 301       |   |   |   | 367 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| TOTAL INTEREST EXPENSE                                         |   |                                     | 1,482     |   |   |   | 2,094 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| NET INTEREST INCOME                                            |   |                                     | 4,251     |   |   |   | 3,790 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                                      |   |                                     | 348       |   |   |   | 165 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES       |   |                                     | 3,903     |   |   |   | 3,625 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| OTHER INCOME:                                                  |   |                                     |      |   |   |   |   |   |
| Service charges on deposit accounts                            |   |                                     | 559       |   |   |   | 577 |   |
| Other service charges and fees                                 |   |                                     | 356       |   |   |   | 371 |   |
| Gain on sale of investment securities                          |   |                                     | -         |   |   |   | - |   |
| Impairment loss on securities:                                 |   |                                     |      |   |   |   |   |   |
| Total other-than-temporary impairment loss                     |   |                                     | (1,802    | ) |   |   | (755 | ) |
| Less: Portion of loss recognized in other comprehensive income |   |                                     | 1,802     |   |   |   | 648 |   |
| Net impairment loss recognized in earnings                     |   |                                     | -         |   |   |   | (107 | ) |
|                                                           |   |                                     |      |   |   |   |   |   |
| TOTAL OTHER INCOME                                             |   |                                     |  915 |   |   |   |  841 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| OTHER EXPENSES:                                                |   |                                     |      |   |   |   |   |   |
| Salaries and employee benefits                                 |   |                                     | 2,256     |   |   |   | 2,103 |   |
| Occupancy and equipment                                        |   |                                     | 537       |   |   |   | 517 |   |
| Other                                                          |   |                                     | 1,731     |   |   |   | 1,078 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| TOTAL OTHER EXPENSES                                           |   |                                     | 4,524     |   |   |   | 3,698 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| INCOME BEFORE INCOME TAXES (BENEFIT)                           |   |                                     | 294       |   |   |   | 768 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| INCOME TAXES (BENEFIT)                                         |   |                                     | (207      | ) |   |   | 232 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| NET INCOME                                                     |   |                                     | 501       |   |   |   | 536 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| PREFERRED DIVIDENDS                                            |   |                                     | 86        |   |   |   | 62 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| PREFERRED STOCK ACCRETION                                      |   |                                     | -         |   |   |   | 14 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| NET INCOME APPLICABLE TO COMMON STOCKHOLDERS                   |   | $                                        | 415       |   |   | $ | 460 |   |
|                                                           |   |                                     |      |   |   |   |   |   |
| NET INCOME APPLICABLE TO COMMON STOCKHOLDERS:                  |   |                                     |      |   |   |   |   |   |
| BASIC                                                          |   | $                                        | .14       |   |   | $ | .15 |   |
| DILUTED                                                        |   |                                     | .14       |   |   |   | .15 |   |
| DIVIDENDS PER SHARE – COMMON                             |   |                                     | .0375     |   |   |   | .075 |   |

----

|                                                                               |   |   CommonStock |   |   |   PreferredStock |   |   |   StockWarrants |   |   |  AdditionalPaid-inCapital |   |   |   RetainedEarnings |   |   | AccumulatedOtherCompre-hensiveIncome(Loss) |   |   |   TreasuryStock |   |   |    Total |   |
|------------------------------------------------------------------------------------|--------|-------------------------|--------|--------|----------------------------|--------|--------|---------------------------|--------|--------|--------------------------------|--------|--------|------------------------------|--------|--------|--------------------------------------------|--------|--------|---------------------------|--------|--------|-------------------------|--------|
| Balance, January 1, 2010                                                           |   | $                       | 3,046  |   |                       | $      | 4,773  |                      |   | $      | -                              |   |   | $                            | 23,418 |   |                                       | $      | 12,944 |                      |   | $      | (101                    | )      |   | $ | (464 | ) |   | $ | 43,616 |   |
| Net income                                                                         |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | 536    |                      |   |   | -                       |   |   |   | - |   |   |   | 536 |   |
| Net change in unrealized gain (loss) on available- for-sale securities, net of tax |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | -      |                      |   |   | 461                     |   |   |   | - |   |   |   | 461 |   |
| Net change in unrealized gain(loss) on derivative, net of tax                      |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | -      |                      |   |   | 1                       |   |   |   | - |   |   |   | 1 |   |
| Accretion of preferred stock discount                                              |   |                    | -      |   |                       |   | 14     |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | (14    | )                         |   |   | -                       |   |   |   | - |   |   |   | - |   |
| Dividends on preferred stock                                                       |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | (62    | )                         |   |   | -                       |   |   |   | - |   |   |   | (62 | ) |
| Dividends on common stock, $.075 per share                                         |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | (226   | )                         |   |   | -                       |   |   |   | - |   |   |   | (226 | ) |
| Balance, March 31, 2010                                                            |   | $                       | 3,046  |   |                       | $      | 4,787  |                      |   | $      | -                              |   |   | $                            | 23,418 |   |                                       | $      | 13,178 |                      |   | $      | 361                     |   |   | $ | (464 | ) |   | $ | 44,326 |   |
|                                                                               |   |                    |   |   |                       |   |   |                      |   |   |                           |   |   |                         |   |   |                                       |   |   |                      |   |   |                    |   |   |   |   |   |   |   |   |   |
| Balance, January 1, 2011                                                           |   | $                       | 3,059  |   |                       | $      | 16,939 |                      |   | $      | 284                            |   |   | $                            | 23,135 |   |                                       | $      | 14,723 |                      |   | $      | (577                    | )      |   | $ | (464 | ) |   | $ | 57,099 |   |
| Net income                                                                         |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | 501    |                      |   |   | -                       |   |   |   | - |   |   |   | 501 |   |
| Net change in unrealized gain (loss) on available- for-sale securities, net of tax |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | -      |                      |   |   | 184                     |   |   |   | - |   |   |   | 184 |   |
| Net change in unrealized gain (loss)on derivative, net of tax                      |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | -      |                      |   |   | 1                       |   |   |   | - |   |   |   | 1 |   |
| Dividends on preferred Stock                                                  |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | (86    | )                         |   |   | -                       |   |   |   | - |   |   |   | (86 | ) |
| Dividends on common stock, $.0375 per share                                        |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | -      |   |                                       |   | (115   | )                         |   |   | -                       |   |   |   | - |   |   |   | (115 | ) |
| Restricted stock grant                                                             |   |                    | 34     |   |                       |   | -      |                      |   |   | -                              |   |   |                         | (34    | )      |                                       |   | -      |                      |   |   | -                       |   |   |   | - |   |   |   | - |   |
| Compensation expense                                                               |   |                    | -      |   |                       |   | -      |                      |   |   | -                              |   |   |                         | 23     |   |                                       |   | -      |                      |   |   | -                       |   |   |   | - |   |   |   | 23 |   |
| Balance, March 31, 2011                                                            |   | $                       | 3,093  |   |                       | $      | 16,939 |                      |   | $      | 284                            |   |   | $                            | 23,124 |   |                                       | $      | 15,023 |                      |   | $      | (392                    | )      |   | $ | (464 | ) |   | $ | 57,607 |   |

----

| ($ Amounts in Thousands)                                                          |   | (Unaudited) Three Months Ended March 31, |    |
|-----------------------------------------------------------------------------------|--------|------------------------------------------|---------|
|                                                                              |   | 2011                                     |    |   | 2010 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                             |   |                                     |    |   |   |   |
| NET INCOME                                                                        |   | $                                        | 501     |   |   | $ | 536 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                                     |    |   |   |   |   |   |
| Depreciation, amortization and accretion                                          |   |                                     | 241     |   |   |   | 321 |   |
| Impairment loss on securities                                                     |   |                                     | -       |   |   |   | 107 |   |
| Provision for loan losses                                                         |   |                                     | 348     |   |   |   | 165 |   |
| Loss on sale/writedown of ORE                                                     |   |                                     | 7       |   |   |   | 40 |   |
| Restricted stock expense                                                          |   |                                     | 23      |   |   |   | - |   |
| Increase in cash value of life insurance                                          |   |                                     | (46     | ) |   |   | (77 | ) |
| Federal Home Loan Bank stock dividends                                            |   |                                     | (1      | ) |   |   | (1 | ) |
| Changes in:                                                                       |   |                                     |    |   |   |   |   |   |
| Interest receivable                                                               |   |                                     | 5       |   |   |   | 79 |   |
| Loans held for sale                                                               |   |                                     | 1,026   |   |   |   | 2,396 |   |
| Interest payable                                                                  |   |                                     | (24     | ) |   |   | (173 | ) |
| Other, net                                                                        |   |                                     | (194    | ) |   |   | (1,479 | ) |
|                                                                              |   |                                     |    |   |   |   |   |   |
| NET CASH PROVIDED BY OPERATING ACTIVITIES                                         |   |                                     | 1,886   |   |   |   | 1,914 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                             |   |                                     |    |   |   |   |   |   |
| Maturities and calls of securities available-for-sale                             |   |                                     | 9,622   |   |   |   | 14,874 |   |
| Purchases of securities available-for-sale                                        |   |                                     | (12,333 | ) |   |   | (12,250 | ) |
| Net increase in loans                                                             |   |                                     | (6,362  | ) |   |   | (16,728 | ) |
| Net additions in premises and equipment                                           |   |                                     | (546    | ) |   |   | (213 | ) |
|                                                                              |   |                                     |    |   |   |   |   |   |
| NET CASH USED IN INVESTING ACTIVITIES                                             |   |                                     | (9,619  | ) |   |   | (14,317 | ) |
|                                                                              |   |                                     |    |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                             |   |                                     |    |   |   |   |   |   |
| Increase in deposits                                                              |   |                                     | 38,185  |   |   |   | 35,321 |   |
| Net decrease in borrowed funds                                                    |   |                                     | (19     | ) |   |   | (26 | ) |
| Dividends paid on common stock                                                    |   |                                     | (113    | ) |   |   | (226 | ) |
| Dividends paid on preferred stock                                                 |   |                                     | (86     | ) |   |   | (62 | ) |
|                                                                              |   |                                     |    |   |   |   |   |   |
| NET CASH PROVIDED BY FINANCING ACTIVITIES                                         |   |                                     | 37,967  |   |   |   | 35,007 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| NET INCREASE IN CASH                                                              |   |                                     | 30,234  |   |   |   | 22,604 |   |
| CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                  |   |                                     | 33,976  |   |   |   | 15,991 |   |
| CASH AND CASH EQUIVALENTS AT END OF PERIOD                                        |   | $                                        | 64,210  |   |   | $ | 38,595 |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES:                                                         |   |                                     |    |   |   |   |   |   |
|                                                                              |   |                                     |    |   |   |   |   |   |
| CASH PAYMENTS FOR INTEREST                                                        |   | $                                        | 1,506   |   |   | $ | 2,267 |   |
| CASH PAYMENTS FOR INCOME TAXES                                                    |   |                                     | 161     |   |   |   | 180 |   |
| LOANS TRANSFERRED TO OTHER REAL ESTATE                                            |   |                                     | 455     |   |   |   | 1,353 |   |
| ISSUANCE OF RESTRICTED STOCK GRANTS                                               |   |                                     | 34      |   |   |   | - |   |

----

----

----

|                                                                  |   | For the Three Months Ended March 31, 2011 |    |
|-----------------------------------------------------------------------|--------|-------------------------------------------|---------|
|                                                                  |   | Net Income (Numerator)                    |    |   | Shares (Denominator) |   |   | Per Share Data |   |
|                                                                  |   |                                      |    |   |   |   |   |   |   |
| Basic per share                                                       |   | $                                         | 415,000 |   |   |   | 3,054,789 |   |   | $ | .14 |   |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |   |   |
| Effect of dilutive shares:     Restricted stock grants |   |                                      | -       |   |   |   | 5,271 |   |   |   |   |   |
|                                                                  |   |                                      |    |   |   |   |   |   |   |   |   |   |
| Diluted per share                                                     |   | $                                         | 415,000 |   |   |   | 3,060,060 |   |   | $ | .14 |   |

|              |   | For the Three Months EndedMarch 31, 2010 |    |
|-------------------|--------|------------------------------------------|---------|
|              |   | Net Income (Numerator)                   |    |   | Shares (Denominator) |   |   | Per Share Data |   |
|              |   |                                     |    |   |   |   |   |   |   |
| Basic per share   |   | $                                        | 460,000 |   |   |   | 3,019,869 |   |   | $ | .15 |   |
|              |   |                                     |    |   |   |   |   |   |   |   |   |   |
| Diluted per share |   | $                                        | 460,000 |   |   |   | 3,019,869 |   |   | $ | .15 |   |

|                                                                                         |   | Quarter Ended March 31, |   |
|----------------------------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                                         |   | 2011                    |   |   | 2010 |   |
| Net Income                                                                                   |   | $                       | 501    |   |   | $ | 536 |   |
|                                                                                         |   |                    |   |   |   |   |   |   |
| Other Comprehensive Income, net of tax:                                                      |   |                    |   |   |   |   |   |   |
| Unrealized holding gains on available-for-sale securities during the period                  |   |                    | 184    |   |   |   | 461 |   |
| Unrealized gain on derivative carried at fair value during the period                   |   |                    | 1      |   |   |   | 1 |   |
|                                                                                         |   |                    |   |   |   |   |   |   |
| Comprehensive Income                                                                         |   | $                       | 686    |   |   | $ | 998 |   |
|                                                                                         |   |                    |   |   |   |   |   |   |
| Unrealized holding gains on available-for-sale securities during the period, net of tax |   | $                       | 184    |   |   | $ | 461 |   |
|                                                                                         |   |                    |   |   |   |   |   |   |
| Unrealized gain on derivative carried at fair value during the period, net of tax       |   |                    | 1      |   |   |   | 1 |   |
|                                                                                         |   |                    |   |   |   |   |   |   |
| Accumulated Other Comprehensive Loss, beginning of period                               |   |                    | (577   | ) |   |   | (101 | ) |
|                                                                                         |   |                    |   |   |   |   |   |   |
| Accumulated Other Comprehensive Income (Loss), end of period                            |   | $                       | (392   | ) |   | $ | 361 |   |

----

| Level 1: | Valuations for assets and liabilities traded in active exchange markets, such as the New York Stock Exchange. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.                                                                                                                                                                                                                                                                     |
|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Level 2: | Valuations for assets and liabilities traded in less active dealer or broker markets. Valuations are obtained from third party pricing services for identical or comparable assets or liabilities which use observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets and liabilities. |
|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| Level 3: | Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.                                                                                                                                                                                                                                                                                                                                                                     |

----

|                                    |   | Fair Value Measurements Using |    |
|-----------------------------------------|--------|-------------------------------|---------|
|                                    |   | Fair Value                    |    |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Obligations of U.S. Government Agencies |   | $                             | 26,561  |   |   | $ | - |   |   | $ | 26,561 |   |   | $ | - |   |
| Municipal securities                    |   |                          | 52,048  |   |   |   | - |   |   |   | 52,048 |   |   |   | - |   |
| Mortgage-backed securities              |   |                          | 21,333  |   |   |   | - |   |   |   | 21,333 |   |   |   | - |   |
| Corporate obligations                   |   |                          | 6,484   |   |   |   | - |   |   |   | 4,053 |   |   |   | 2,431 |   |
| Other                                   |   |                          | 977     |   |   |   | 977 |   |   |   | - |   |   |   | - |   |
| Total                                   |   | $                             | 107,403 |   |   | $ | 977 |   |   | $ | 103,995 |   |   | $ | 2,431 |   |

|                                         |   | Fair Value Measurements Using |    |
|----------------------------------------------|--------|-------------------------------|---------|
|                                         |   | Fair Value                    |    |   | Quoted Prices inActive Marketsfor IdenticalAssets(Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
| Obligations of U.S. Government Agencies |   | $                             | 22,855  |   |   | $ | - |   |   | $ | 22,855 |   |   | $ | - |   |
| Municipal securities                         |   |                          | 54,673  |   |   |   | - |   |   |   | 54,673 |   |   |   | - |   |
| Mortgage-backed securities                   |   |                          | 18,318  |   |   |   | - |   |   |   | 18,318 |   |   |   | - |   |
| Corporate obligations                        |   |                          | 7,702   |   |   |   | - |   |   |   | 5,083 |   |   |   | 2,619 |   |
| Other                                        |   |                          | 986     |   |   |   | 986 |   |   |   | - |   |   |   | - |   |
| Total                                        |   | $                             | 104,534 |   |   | $ | 986 |   |   | $ | 100,929 |   |   | $ | 2,619 |   |

----

| (Dollars in thousands)                                         |   | Bank-IssuedTrust Preferred Securities |   |
|----------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                           |   | 2011                                  |   |   | 2010 |   |
| Balance, January 1                                             |   | $                                     | 2,619  |   |   | $ | 3,233 |   |
| Transfers into Level 3                                         |   |                                  | -      |   |   |   | - |   |
| Transfers out of Level 3                                       |   |                                  | -      |   |   |   | - |   |
| Other-than-temporary impairment loss included in earnings |   |                                  | -      |   |   |   | (472 | ) |
| Unrealized loss included in comprehensive income               |   |                                  | (188   | ) |   |   | (142 | ) |
| Balance at March 31, 2011 and December 31, 2010                |   | $                                     | 2,431  |   |   | $ | 2,619 |   |

----

|                    |   | Fair Value Measurements Using |   |
|-------------------------|--------|-------------------------------|--------|
|                    |   | Fair Value                    |   |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Impaired loans          |   | $                             | 4,571  |   |   | $ | - |   |   | $ | 4,571 |   |   | $ | - |   |
| Other real estate owned |   | $                             | 3,913  |   |   | $ | - |   |   | $ | 3,913 |   |   | $ | - |   |

|                    |   | Fair Value Measurements Using |   |
|-------------------------|--------|-------------------------------|--------|
|                    |   | Fair Value                    |   |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| Impaired loans          |   | $                             | 4,529  |   |   | $ | - |   |   | $ | 4,529 |   |   | $ | - |   |
| Other real estate owned |   | $                             | 3,995  |   |   | $ | - |   |   | $ | 3,995 |   |   | $ | - |   |

----

|                          |   | As ofMarch 31, 2011 |    |   | As of December 31, 2010 |   |
|-------------------------------|--------|---------------------|---------|--------|------------------------------|--------|
|                          |   | CarryingAmount      |    |   | EstimatedFair Value          |   |   | CarryingAmount |   |   | EstimatedFair Value |   |
|                          |   | (In thousands)      |    |
| Financial Instruments:        |   |                |    |   |                         |   |   |   |   |   |   |   |
| Assets:                       |   |                |    |   |                         |   |   |   |   |   |   |   |
| Cash and cash equivalents     |   | $                   | 64,210  |   |                         | $      | 64,210 |   |   | $ | 33,977 |   |   | $ | 33,977 |   |
| Securities available-for-sale |   |                | 107,403 |   |                         |   | 107,403 |   |   |   | 104,534 |   |   |   | 104,534 |   |
| Securities held-to-maturity   |   |                | 3       |   |                         |   | 3 |   |   |   | 3 |   |   |   | 3 |   |
| Other securities              |   |                | 2,600   |   |                         |   | 2,600 |   |   |   | 2,599 |   |   |   | 2,599 |   |
| Loans, net                    |   |                | 332,490 |   |                         |   | 344,211 |   |   |   | 327,956 |   |   |   | 339,927 |   |
| Liabilities:                  |   |                |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearingdeposits   |   | $                   | 51,128  |   |                         | $      | 51,128 |   |   | $ | 48,312 |   |   | $ | 48,312 |   |
| Interest-bearing deposits     |   |                | 383,536 |   |                         |   | 384,341 |   |   |   | 348,167 |   |   |   | 349,565 |   |
| Subordinated debentures       |   |                | 10,310  |   |                         |   | 10,310 |   |   |   | 10,310 |   |   |   | 10,310 |   |
| FHLB and other borrowings     |   |                | 30,088  |   |                         |   | 30,088 |   |   |   | 30,107 |   |   |   | 30,107 |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                     |   | March 31, 2011         |    |   | December 31, 2010 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                     |   | Amount                 |    |   | Percent ofTotal   |   |   | Amount |   |   | Percentof Total |   |
|                                                                                                                                                                                                                                                                                                                                                                                                     |   | (Dollars in thousands) |    |
| Mortgage loans held for sale                                                                                                                                                                                                                                                                                                                                                                             |   | $                      | 1,913   |   |              |   | 0.6 | % |   | $ | 2,938 |   |   |   | 0.9 | % |
| Commercial, financial and agricultural                                                                                                                                                                                                                                                                                                                                                                   |   |                   | 47,590  |   |              |   | 14.1 |   |   |   | 48,427 |   |   |   | 14.6 |   |
| Real Estate:                                                                                                                                                                                                                                                                                                                                                                                             |   |                   |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    Mortgage-commercial                                                             |   |                   | 112,417 |   |              |   | 33.4 |   |   |   | 109,073 |   |   |   | 32.8 |   |
|    Mortgage-residential                                                            |   |                   | 101,843 |   |              |   | 30.2 |   |   |   | 102,425 |   |   |   | 30.8 |   |
|    Construction                                                                    |   |                   | 62,800  |   |              |   | 18.6 |   |   |   | 58,962 |   |   |   | 17.7 |   |
| Consumer and other                                                                                |   |                   | 10,229  |   |              |   | 3.1 |   |   |   | 10,748 |   |   |   | 3.2 |   |
| Total loans                                                                                       |   |                   | 336,792 |   |              |   | 100 | % |   |   | 332,573 |   |   |   | 100 | % |
| Allowance for loan losses                                                                                                                                                                                                                                                                                                                                                                                |   |                   | (4,302  | )      |              |   |   |   |   |   | (4,617 | ) |   |   |   |   |
| Net loans                                                                                         |   | $                      | 332,490 |   |              |   |   |   |   | $ | 327,956 |   |   |   |   |   |

----

|                                                  |   | March 31, 2011         |   |
|-------------------------------------------------------|--------|------------------------|--------|
|                                                  |   | (Dollars in thousands) |   |
|                                                  |   | Amount                 |   |   | % of loansin each category to total loans |   |
| Commercial Non Real Estate                            |   | $                      | 473    |   |   |   | 10.65 | % |
| Commercial Real Estate                                |   |                   | 2,966  |   |   |   | 68.87 |   |
| Consumer Real Estate                                  |   |                   | 808    |   |   |   | 18.00 |   |
| Consumer                                              |   |                   | 55     |   |   |   | 2.48 |   |
| Unallocated                                           |   |                   | -      |   |   | - |   |
|         Total |   | $                      | 4,302  |   |   |   | 100 | % |

|                                                  |   | December 31, 2010      |   |
|-------------------------------------------------------|--------|------------------------|--------|
|                                                  |   | (Dollars in thousands) |   |
|                                                  |   | Amount                 |   |   | % of loansin each category to total loans |   |
| Commercial Non Real Estate                            |   | $                      | 757    |   |   |   | 15.90 | % |
| Commercial Real Estate                                |   |                   | 2,817  |   |   |   | 62.20 |   |
| Consumer Real Estate                                  |   |                   | 902    |   |   |   | 18.04 |   |
| Consumer                                              |   |                   | 140    |   |   |   | 2.90 |   |
| Unallocated                                           |   |                   | 1      |   |   | .96 |   |
|         Total |   | $                      | 4,617  |   |   |   | 100 | % |

|                                                                                                                   |   | March 31,2011  |     |   | December 31,2010 |   |
|------------------------------------------------------------------------------------------------------------------------|--------|----------------|----------|--------|------------------|--------|
|                                                                                                                   |   | (In thousands) |     |
| Impaired Loans:                                                                                                        |   |           |     |   |             |   |
|     Impaired loans without a valuation allowance                                                   |   | $              | 1,567    |   |             | $      | 2,406 |   |
|     Impaired loans with a valuation allowance                                                      |   |           | 3,004    |   |             |   | 2,123 |   |
| Total impaired loans                                                                                                   |   | $              | 4,571    |   |             | $      | 4,529 |   |
| Allowance for loan losses on impaired loans at period end                                                              |   |           | 772      |   |             |   | 738 |   |
|                                                                                                                   |   |           |     |   |             |   |   |   |
| Total nonaccrual loans                                                                                                 |   |           | 4,024    |   |             |   | 4,212 |   |
|                                                                                                                   |   |           |     |   |             |   |   |   |
| Past due 90 days or more and still accruing                                                                            |   |           | 480      |   |             |   | 1,071 |   |
|                                                                                                                   |   |           |     |   |             |   |   |   |
| Average investment in impaired loans                                                                                   |   |           | 4,161    |   |             |   | 14,486 |   |
|                                                                                                                   |   |           |     |   |             |   |   |   |
| Interest recognized on impaired loans for the three month period ended March 31, 2011 and year ended December 31, 2010 |   |           |   - |   |             |   |   208 |   |

----

|                      |   | Real Estate    |    |   | Installment and Other |   |   | Commercial, Financial and Agriculture |   |   | Total  |   |
|---------------------------|--------|----------------|---------|--------|-----------------------|--------|--------|---------------------------------------|--------|--------|--------|--------|
|                      |   | (In thousands) |    |
| Loans                     |   |           |    |   |                  |   |   |                                  |   |   |   |   |
| Individually evaluated    |   | $              | 4,383   |   |                  | $      | 43     |                                  |   | $      | 145    |   |   | $ | 4,571 |   |
| Collectively evaluated    |   |           | 271,673 |   |                  |   | 9,032  |                                  |   |   | 49,603 |   |   |   | 330,308 |   |
| Total                     |   | $              | 276,056 |   |                  | $      | 9,075  |                                  |   | $      | 49,748 |   |   | $ | 334,879 |   |
|                      |   |           |    |   |                  |   |   |                                  |   |   |   |   |   |   |   |   |
| Allowance for Loan Losses |   |           |    |   |                  |   |   |                                  |   |   |   |   |   |   |   |   |
| Individually evaluated    |   | $              | 705     |   |                  | $      | 11     |                                  |   | $      | 56     |   |   | $ | 772 |   |
| Collectively evaluated    |   |           | 3,007   |   |                  |   | 101    |                                  |   |   | 422    |   |   |   | 3,530 |   |
| Total                     |   | $              | 3,712   |   |                  | $      | 112    |                                  |   | $      | 478    |   |   | $ | 4,302 |   |

|                      |   | Real Estate    |    |   | Installment and Other |   |   | Commercial, Financial and Agriculture |   |   | Total  |   |
|---------------------------|--------|----------------|---------|--------|-----------------------|--------|--------|---------------------------------------|--------|--------|--------|--------|
|                      |   | (In thousands) |    |
| Loans                     |   |           |    |   |                  |   |   |                                  |   |   |   |   |
| Individually evaluated    |   | $              | 4,091   |   |                  | $      | 48     |                                  |   | $      | 390    |   |   | $ | 4,529 |   |
| Collectively evaluated    |   |           | 266,504 |   |                  |   | 9,083  |                                  |   |   | 49,519 |   |   |   | 325,106 |   |
| Total                     |   | $              | 270,595 |   |                  | $      | 9,131  |                                  |   | $      | 49,909 |   |   | $ | 329,635 |   |
|                      |   |           |    |   |                  |   |   |                                  |   |   |   |   |   |   |   |   |
| Allowance for Loan Losses |   |           |    |   |                  |   |   |                                  |   |   |   |   |   |   |   |   |
| Individually evaluated    |   | $              | 464     |   |                  | $      | 10     |                                  |   | $      | 264    |   |   | $ | 738 |   |
| Collectively evaluated    |   |           | 3,254   |   |                  |   | 132    |                                  |   |   | 493    |   |   |   | 3,879 |   |
| Total                     |   | $              | 3,718   |   |                  | $      | 142    |                                  |   | $      | 757    |   |   | $ | 4,617 |   |

----

|                                           |   | Recorded Investment |   |   | Unpaid Balance |   | Related Allowance |   |   | Average Recorded Investment YTD |   |   | Interest Income Recognized YTD |   |
|------------------------------------------------|--------|--------------------------|--------|--------|----------------|--------|-------------------|--------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                           |   | (In thousands)           |   |
| Impaired loans with no related allowance: |   |                     |   |   |           |   |              |   |   |                            |   |   |                           |   |   |
| Commercial installment                         |   | $                        | 12     |   |           | $      | 12                |   |   | $                               | -      |   |                           | $      | 12 |   |   | $ | - |   |
| Commercial real estate                         |   |                     | 1,223  |   |           |   | 1,223             |   |   |                            | -      |   |                           |   | 1,726 |   |   |   | - |   |
| Consumer real estate                           |   |                     | 318    |   |           |   | 318               |   |   |                            | -      |   |                           |   | 232 |   |   |   | - |   |
| Consumer installment                           |   |                     | 14     |   |           |   | 14                |   |   |                            | -      |   |                           |   | 14 |   |   |   | - |   |
| Total                                          |   | $                        | 1,567  |   |           | $      | 1,567             |   |   | $                               | -      |   |                           | $      | 1,984 |   |   | $ | - |   |
| Impaired loans with a related allowance:  |   |                     |   |   |           |   |              |   |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Commercial installment                         |   | $                        | 133    |   |           | $      | 133               |   |   | $                               | 56     |   |                           | $      | 123 |   |   | $ | - |   |
| Commercial real estate                         |   |                     | 1,744  |   |           |   | 1,744             |   |   |                            | 548    |   |                           |   | 1,354 |   |   |   | - |   |
| Consumer real estate                           |   |                     | 1,098  |   |           |   | 1,098             |   |   |                            | 157    |   |                           |   | 689 |   |   |   | - |   |
| Consumer installment                           |   |                     | 29     |   |           |   | 29                |   |   |                            | 11     |   |                           |   | 11 |   |   |   | - |   |
| Total                                          |   | $                        | 3,004  |   |           | $      | 3,004             |   |   | $                               | 772    |   |                           | $      | 2,177 |   |   | $ | - |   |
| Total Impaired Loans                           |   |                     |   |   |           |   |              |   |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Commercial installment                         |   | $                        | 145    |   |           | $      | 145               |   |   | $                               | 56     |   |                           | $      | 135 |   |   | $ | - |   |
| Commercial real estate                         |   |                     | 2,967  |   |           |   | 2,967             |   |   |                            | 548    |   |                           |   | 3,080 |   |   |   | - |   |
| Consumer real estate                           |   |                     | 1,416  |   |           |   | 1,416             |   |   |                            | 157    |   |                           |   | 921 |   |   |   | - |   |
| Consumer installment                           |   |                     | 43     |   |           |   | 43                |   |   |                            | 11     |   |                           |   | 25 |   |   |   | - |   |
| Total Impaired Loans                           |   | $                        | 4,571  |   |           | $      | 4,571             |   |   | $                               | 772    |   |                           | $      | 4,161 |   |   | $ | - |   |

|                                          |   | Recorded Investment |   |   | Unpaid Balance |   | Related Allowance |   |   | Average Recorded Investment YTD |   |   | Interest Income Recognized YTD |   |
|-----------------------------------------------|--------|--------------------------|--------|--------|----------------|--------|-------------------|--------|--------|---------------------------------|--------|--------|--------------------------------|--------|
|                                          |   | (In thousands)           |   |
| Impaired loans with no related allowance:     |   |                     |   |   |           |   |              |   |   |                            |   |   |                           |   |   |
| Commercial installment                        |   | $                        | 12     |   |           | $      | 12                |   |   | $                               | -      |   |                           | $      | 387 |   |   | $ | 1 |   |
| Commercial real estate                        |   |                     | 2,230  |   |           |   | 2,230             |   |   |                            | -      |   |                           |   | 7,884 |   |   |   | 72 |   |
| Consumer real estate                          |   |                     | 147    |   |           |   | 149               |   |   |                            | -      |   |                           |   | 2,185 |   |   |   | 8 |   |
| Consumer installment                          |   |                     | 15     |   |           |   | 15                |   |   |                            | -      |   |                           |   | 183 |   |   |   | 1 |   |
| Total                                         |   | $                        | 2,404  |   |           | $      | 2,406             |   |   | $                               | -      |   |                           | $      | 10,639 |   |   | $ | 82 |   |
| Impaired loans with a related allowance: |   |                     |   |   |           |   |              |   |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Commercial installment                        |   | $                        | 113    |   |           | $      | 377               |   |   | $                               | 264    |   |                           | $      | 481 |   |   | $ | 17 |   |
| Commercial real estate                        |   |                     | 966    |   |           |   | 1,370             |   |   |                            | 401    |   |                           |   | 2,421 |   |   |   | 89 |   |
| Consumer real estate                          |   |                     | 280    |   |           |   | 343               |   |   |                            | 63     |   |                           |   | 796 |   |   |   | 20 |   |
| Consumer installment                          |   |                     | 23     |   |           |   | 33                |   |   |                            | 10     |   |                           |   | 149 |   |   |   | - |   |
| Total                                         |   | $                        | 1,382  |   |           | $      | 2,123             |   |   | $                               | 738    |   |                           | $      | 3,847 |   |   | $ | 126 |   |
|  Total Impaired Loans                    |   |                     |   |   |           |   |              |   |   |                            |   |   |                           |   |   |   |   |   |   |   |
| Commercial installment                        |   | $                        | 125    |   |           | $      | 389               |   |   | $                               | 264    |   |                           | $      | 868 |   |   | $ | 18 |   |
| Commercial real estate                        |   |                     | 3,196  |   |           |   | 3,600             |   |   |                            | 401    |   |                           |   | 10,305 |   |   |   | 161 |   |
| Consumer real estate                          |   |                     | 427    |   |           |   | 492               |   |   |                            | 63     |   |                           |   | 2,981 |   |   |   | 28 |   |
| Consumer installment                          |   |                     | 38     |   |           |   | 48                |   |   |                            | 10     |   |                           |   | 332 |   |   |   | 1 |   |
| Total Impaired Loans                          |   | $                        | 3,786  |   |           | $      | 4,529             |   |   | $                               | 738    |   |                           | $      | 14,486 |   |   | $ | 208 |   |

|                                                              |   | March 31, 2011        |   |
|-------------------------------------------------------------------|--------|-----------------------|--------|
|                                                              |   | (In thousands)        |   |
|                                                              |   | Past Due30 to 89 Days |   |   | Past Due90 Days or More and Still Accruing |   |   | Non-Accrual |   |   | TotalPast Due andNon-Accrual |   |   | TotalLoans |   |
| Real Estate-construction                                          |   | $                     | 487    |   |   | $ | - |   |   | $ | 1,240 |   |   | $ | 1,727 |   |   | $ | 62,800 |   |
| Real Estate-mortgage                                              |   |                  | 2,639  |   |   |   | 220 |   |   |   | 1,076 |   |   |   | 3,935 |   |   |   | 101,843 |   |
| Real Estate-non farm nonresidential                               |   |                  | 509    |   |   |   | 225 |   |   |   | 1,522 |   |   |   | 2,256 |   |   |   | 112,417 |   |
| Commercial                                                        |   |                  | 404    |   |   |   | - |   |   |   | 144 |   |   |   | 548 |   |   |   | 47,590 |   |
| Obligations of states and political subdivisions in the U.S. |   |                  | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,089 |   |
| Consumer                                                          |   |                  | 205    |   |   |   | 35 |   |   |   | 42 |   |   |   | 282 |   |   |   | 9,140 |   |
| Total                                                             |   | $                     | 4,244  |   |   | $ | 480 |   |   | $ | 4,024 |   |   | $ | 8,748 |   |   | $ | 334,879 |   |

----

|                                 |   | December 31, 2010     |   |
|--------------------------------------|--------|-----------------------|--------|
|                                 |   | (In thousands)        |   |
|                                 |   | Past Due30 to 89 Days |   |   | Past Due 90 Days or More andStill Accruing |   |   | Non-Accrual |   |   | TotalPast Due andNon-Accrual |   |   | TotalLoans |   |
| Real Estate-construction             |   | $                     | 593    |   |   | $ | 1 |   |   | $ | 1,433 |   |   | $ | 2,027 |   |   | $ | 58,962 |   |
| Real Estate-mortgage                 |   |                  | 3,673  |   |   |   | 153 |   |   |   | 893 |   |   |   | 4,719 |   |   |   | 102,426 |   |
| Real Estate-non farm non residential |   |                  | 438    |   |   |   | 737 |   |   |   | 1,452 |   |   |   | 2,627 |   |   |   | 109,073 |   |
| Commercial                           |   |                  | 740    |   |   |   | 144 |   |   |   | 386 |   |   |   | 1,270 |   |   |   | 48,427 |   |
| Consumer                             |   |                  | 262    |   |   |   | 36 |   |   |   | 48 |   |   |   | 346 |   |   |   | 10,747 |   |
| Total                                |   | $                     | 5,706  |   |   | $ | 1,071 |   |   | $ | 4,212 |   |   | $ | 10,989 |   |   | $ | 329,635 |   |

----

|                            |   | Real EstateCommercial |    |   | Real EstateMortgage |   |   | Installment andOther |   |   | Commercial,Financial andAgriculture |   |   | Total  |   |
|---------------------------------|--------|-----------------------|---------|--------|---------------------|--------|--------|----------------------|--------|--------|-------------------------------------|--------|--------|--------|--------|
| Pass                            |   | $                     | 194,929 |   |                | $      | 52,197 |                 |   | $      | 7,955                               |   |   | $      | 46,505 |   |   | $ | 301,586 |   |
| Special Mention                 |   |                  | 4,739   |   |                |   | 520    |                 |   |   | 61                                  |   |   |   | 3      |   |   |   | 5,323 |   |
| Substandard                     |   |                  | 20,392  |   |                |   | 6,285  |                 |   |   | 290                                 |   |   |   | 1,081  |   |   |   | 28,048 |   |
| Doubtful                        |   |                  | -       |   |                |   | -      |                 |   |   | -                                   |   |   |   | 1      |   |   |   | 1 |   |
| Subtotal                        |   |                  | 220,060 |   |                |   | 59,002 |                 |   |   | 8,306                               |   |   |   | 47,590 |   |   |   | 334,958 |   |
| Less:                           |   |                  |    |   |                |   |   |                 |   |   |                                |   |   |   |   |   |   |   |   |   |
| Unearned Discount               |   |                  | 79      |   |                |   | -      |                 |   |   | -                                   |   |   |   | -      |   |   |   | 79 |   |
| Loans, net of unearned discount |   | $                     | 219,981 |   |                | $      | 59,002 |                 |   | $      | 8,306                               |   |   | $      | 47,590 |   |   | $ | 334,879 |   |

|                            |   | Real EstateCommercial |    |   | Real EstateMortgage |   |   | Installment andOther |   |   | Commercial,Financial and Agriculture |   |   | Total  |   |
|---------------------------------|--------|-----------------------|---------|--------|---------------------|--------|--------|----------------------|--------|--------|--------------------------------------|--------|--------|--------|--------|
| Pass                            |   | $                     | 187,657 |   |                | $      | 53,776 |                 |   | $      | 8,764                                |   |   | $      | 47,500 |   |   | $ | 297,697 |   |
| Special Mention                 |   |                  | 5,154   |   |                |   | 125    |                 |   |   | 70                                   |   |   |   | 14     |   |   |   | 5,363 |   |
| Substandard                     |   |                  | 17,820  |   |                |   | 6,130  |                 |   |   | 297                                  |   |   |   | 2,215  |   |   |   | 26,462 |   |
| Doubtful                        |   |                  | -       |   |                |   | -      |                 |   |   | -                                    |   |   |   | 180    |   |   |   | 180 |   |
| Subtotal                        |   |                  | 210,631 |   |                |   | 60,031 |                 |   |   | 9,131                                |   |   |   | 49,909 |   |   |   | 329,702 |   |
| Less:                           |   |                  |    |   |                |   |   |                 |   |   |                                 |   |   |   |   |   |   |   |   |   |
| Unearned Discount               |   |                  | 67      |   |                |   | -      |                 |   |   | -                                    |   |   |   | -      |   |   |   | 67 |   |
| Loans, net of unearned discount |   | $                     | 210,564 |   |                | $      | 60,031 |                 |   | $      | 9,131                                |   |   | $      | 49,909 |   |   | $ | 329,635 |   |

----

|                                                                    |   | March 31, 2011 |                 |
|-------------------------------------------------------------------------|--------|----------------|----------------------|
|                                                                    |   |           |                 |   | Gross |   |   | Gross |   |   |   |   |
|                                                                    |   | Amortized      |                 |   | Unrealized |   |   | Unrealized |   |   | Estimated |   |
|                                                                    |   | Cost           |                 |   | Gains |   |   | Losses |   |   | Fair Value |   |
| Available-for-sale securities:                                          |   |           |                 |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government Agencies                                 |   | $              | 26,511               |   |   | $ | 154 |   |   | $ | 104 |   |   | $ | 26,561 |   |
| Tax-exempt and taxable obligations of states and municipal subdivisions |   |           |     50,948 |   |   |   |     1,236 |   |   |   |     136 |   |   |   |     52,048 |   |
| Mortgage-backed securities                                              |   |           | 20,717               |   |   |   | 683 |   |   |   | 67 |   |   |   | 21,333 |   |
| Corporate obligations                                                   |   |           | 8,560                |   |   |   | 8 |   |   |   | 2,084 |   |   |   | 6,484 |   |
| Other                                                                   |   |           | 1,255                |   |   |   | - |   |   |   | 278 |   |   |   | 977 |   |
| Total                                                                   |   | $              | 107,991              |   |   | $ | 2,081 |   |   | $ | 2,669 |   |   | $ | 107,403 |   |
| Held-to-maturity securities:                                            |   |           |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                                              |   | $              | 3                    |   |   | $ | - |   |   | $ | - |   |   | $ | 3 |   |

----

| ITEM NO. 2 | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |
|------------|---------------------------------------------------------------------------------------------|

----

|                                        |   | ($ In Thousands) |   |
|---------------------------------------------|--------|------------------|--------|
| Past due 30 through 89 days                 |   | $                | 4,244  |   |
| Past due 90 days or more and still accruing |   |             | 480    |   |

| Tier 1 leverage   |   |   | 12.87 | % |
|-------------------|--------|--------|-------|---|
| Tier 1 risk-based |   |   | 18.26 | % |
| Total risk-based  |   |   | 19.44 | % |

----

----

----

----

----

|   | Exhibit No. |   |                                                                                                                                                     |
|--------|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |        |   |                                                                                                                                                     |
|   | 31.1        |   | Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                  |
|   |        |   |                                                                                                                                                     |
|   | 31.2        |   | Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                  |
|   |        |   |                                                                                                                                                     |
|   | 32.1        |   | Certification of principal executive officer pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|   |        |   |                                                                                                                                                     |
|   | 32.2        |   | Certification of principal financial officer pursuant to 18 U. S. C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

----

|    |   |   | THE FIRST BANCSHARES, INC.                 |   |
|---------|--------|--------|--------------------------------------------|--------|
|    |   |   | (Registrant)                               |   |
|    |   |   |                                       |   |
|    |   |   | /s/ M. RAY (HOPPY) COLE, JR.               |   |
| 5-16-11 |   |   | M. Ray (Hoppy) Cole, Jr.                   |   |
| (Date)  |   |   | Chief Executive Officer                    |   |
|    |   |   |                                       |   |
|    |   |   |                                       |   |
|    |   |   | /s/ DEEDEE LOWERY                          |   |
| 5-16-11 |   |   | DeeDee Lowery, Executive                   |   |
| (Date)  |   |   | Vice President and Chief Financial Officer |   |

----