----

----

|                                                      | December 31,                                                                 |
|-----------------------------------------------------------|------------------------------------------------------------------------------|
|                                                      | 2010                                                                         |   | 2009 |   | 2008 |   | 2007 |   | 2006 |
| Earnings:                                                 |                                                                         |   |   |   |   |   |   |   |   |
|    Net interest income                     | $      16,334                                  |   | $       14,390 |   | $       16,105 |   | $       16,870 |   | $       13,242 |
|    Provision for loan                      |                                                                         |   |   |   |   |   |   |   |   |
|      Losses                      | 983                                                                          |   | 1,206 |   | 2,205 |   | 1,321 |   | 800 |
|                                                      |                                                                         |   |   |   |   |   |   |   |   |
|    Noninterest income                      | 3,895                                                                        |   | 4,397 |   | 4,631 |   | 4,575 |   | 3,380 |
|    Noninterest expense                     | 15,843                                                                       |   | 15,323 |   | 15,998 |   | 14,823 |   | 11,138 |
|    Net income                              | 2,549                                                                        |   | 1,743 |   | 1,849 |   | 3,823 |   | 3,315 |
|    Net income applicable                   |                                                                         |   |   |   |   |   |   |   |   |
|      to common                   |                                                                         |   |   |   |   |   |   |   |   |
|      stockholders                | 2,233                                                                        |   | 1,461 |   | 1,849 |   | 3,823 |   | 3,315 |
|                                                      |                                                                         |   |   |   |   |   |   |   |   |
| Per  common share data:                         |                                                                         |   |   |   |   |   |   |   |   |
|    Basic net income per                    |                                                                         |   |   |   |   |   |   |   |   |
|      Share                       |  $           .74 |   | $            .49 |   | $            .62 |   | $          1.28 |   | $          1.35 |
|    Diluted net income per                  |                                                                         |   |   |   |   |   |   |   |   |
|      Share                       | .74                                                                          |   | .49 |   |             .61 |   |           1.25 |   | 1.27 |
|   Per share data:                               |                                                                         |   |   |   |   |   |   |   |   |
|      Basic net income            |                                                                         |   |   |   |   |   |   |   |   |
|         per share | $            .84 |   | $            .58 |   | $             .62 |   | $         1.28 |   | $           1.35 |
|      Diluted net income          |                                                                         |   |   |   |   |   |   |   |   |
|         per share | .84                                                                          |   | .58 |   | .61 |   | 1.25 |   | 1.27 |
|                                                      |                                                                         |   |   |   |   |   |   |   |   |
| Selected Year End                                         |                                                                         |   |   |   |   |   |   |   |   |
|   Balances:                                     |                                                                         |   |   |   |   |   |   |   |   |
|                                                      |                                                                         |   |   |   |   |   |   |   |   |
|      Total assets                | $    503,045                                             |   | $    477,552 |   | $     474,824 |   | $   496,056 |   | $     417,769 |
|      Securities                  | 107,136                                                                      |   | 114,618 |   | 102,303 |   | 87,052 |   | 91,810 |
|      Loans, net of               |                                                                         |   |   |   |   |   |   |   |   |
|        allowance       | 327,956                                                                      |   | 314,033 |   | 318,300 |   | 367,002 |   | 284,082 |
|      Deposits                    | 396,479                                                                      |   | 383,754 |   | 378,079 |   | 386,168 |   | 351,722 |
|      Stockholders’ equity  | 57,098                                                                       |   | 43,617 |   | 36,568 |   | 36,281 |   | 32,365 |

|                                  | 2010                                                                                                      |   | 2009                                                                                                      |
|---------------------------------------|-----------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|
|                                  | (In thousands)                                                                                            |
|                                  |                                                                                                      |   |                                                                                                      |
| Interest income                       | $          23,453                                       |   | $          24,621                                       |
| Interest expense                      |               6,933                 |   |               9,966                 |
| Net interest income                   | 16,520                                                                                                    |   | 14,655                                                                                                    |
|                                  |                                                                                                      |   |                                                                                                      |
| Provision for loan losses             |                  983 |   |               1,206                 |
|                                  |                                                                                                      |   |                                                                                                      |
| Net interest income after             |                                                                                                      |   |                                                                                                      |
|   provision for loan losses |             15,537                            |   |            13,449                                  |
|                                  |                                                                                                      |   |                                                                                                      |
| Other income                          | 3,894                                                                                                     |   | 4,396                                                                                                     |
|                                  |                                                                                                      |   |                                                                                                      |
| Other expense                         | 15,405                                                                                                    |   | 14,963                                                                                                    |
|                                  |                                                                                                      |   |                                                                                                      |
| Income tax expense                    |               1,010                 |   |                  672 |
|                                  |                                                                                                      |   |                                                                                                      |
| Net income                            | $            3,016                            |   | $            2,210                            |

----

|                                   | 2010                                                                                      |   | 2009                                                                                            |
|----------------------------------------|-------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------|
|                                   | (In thousands)                                                                            |
|                                   |                                                                                      |   |                                                                                            |
| Net interest income:                   |                                                                                      |   |                                                                                            |
| Net interest income of subsidiary bank | $          16,520                       |   | $         14,655                                   |
| Intercompany eliminations              |               (186) |   |                (265) |
|                                   | $          16,334                       |   |  $         14,390                             |
|                                   |                                                                                      |   |                                                                                            |
| Net income:                            |                                                                                      |   |                                                                                            |
| Net income of subsidiary bank          | $            3,016            |   | $           2,210                        |
| Net loss of the Company, excluding     |                                                                                      |   |                                                                                            |
| intercompany accounts                  |               (783) |   |              (749)             |
|                                   | $            2,233            |   | $           1,461                        |

----

|                                                |                                                      |   | Years Ended December 31,                                             |
|-----------------------------------------------------|-----------------------------------------------------------|--------|----------------------------------------------------------------------|
|                                                | 2010                                                      |   | 2009                                                                 |   | 2008 |
|                                                | Average Balance                                           |   | Income/Expenses                                                      |   | Yield/Rate |   | AverageBalance |   | Income/Expenses |   | Yield/Rate |   | AverageBalance |   | Income/Expenses |   | Yield/Rate |
| Assets                                              | (Dollars in thousands)                                    |
| Earning Assets                                      |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loans (1)(2                                  | $328,950                                                  |   | $  20,289                                                  |   | 6.17% |   | $320,495 |   | $  20,674 |   | 6.45% |   | $349,572 |   | $  25,407 |   | 7.27% |
|   Securities                              | 106,891                                                   |   | 3,121                                                                |   | 2.92% |   | 109,422 |   | 3,861 |   | 3.53% |   | 96,357 |   | 4,416 |   | 4.58% |
|   Federal funds sold                           | 16,473                                                    |   | 21                                                                   |   | .13% |   | 17,331 |   | 28 |   | .16% |   | 16,885 |   | 331 |   | 1.96% |
|   Other                                   |          859 |   |            22 |   | 2.56% |   |       1,991 |   |           66 |   |      3.31% |   |       2,783 |   |            98 |   | 3.52% |
|   Total earning assets                         |   453,173                                       |   |     23,453                                       |   | 5.18% |   |   449,239 |   |    24,629 |   | 5.48% |   |   465,597 |   |     30,252 |   | 6.50% |
|                                                |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Cash and due from banks                 | 16,686                                                    |   |                                                                 |   |   |   | 9,172 |   |   |   |   |   | 9,940 |   |   |   |   |
|   Premises and equipment                  | 14,490                                                    |   |                                                                 |   |   |   | 14,675 |   |   |   |   |   | 15,538 |   |   |   |   |
|   Other assets                            | 18,469                                                    |   |                                                                 |   |   |   | 13,620 |   |   |   |   |   | 13,256 |   |   |   |   |
|   Allowance for loan losses               |     (4,513)                           |   |                                                                 |   |   |   |     (5,064) |   |   |   |   |   |     (4,566) |   |   |   |   |
| Total assets                                        | $498,305                                                  |   |                                                                 |   |   |   | $481,642 |   |   |   |   |   | $499,765 |   |   |   |   |
|                                                |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                         |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest-bearing liabilities      | $395,956                                                  |   | $    7,119                                       |   | 1.80% |   | $384,744 |   | $  10,239 |   | 2.66% |   | $403,017 |   | $  14,146 |   | 3.51% |
|    Demand deposits (1)                    | 49,203                                                    |   |                                                                 |   |   |   | 48,855 |   |   |   |   |   | 56,236 |   |   |   |   |
|    Other liabilities                 | 9,434                                                     |   |                                                                 |   |   |   | 6,366 |   |   |   |   |   | 3,964 |   |   |   |   |
|    Shareholders’ equity             |     43,712                            |   |                                                                 |   |   |   |     41,677 |   |   |   |   |   |     36,548 |   |   |   |   |
|    Total liabilities and             |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      shareholders’ equity | $498,305                                                  |   |                                                                 |   |   |   | $481,642 |   |   |   |   |   | $499,765 |   |   |   |   |
|                                                |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net interest spread               |                                                      |   |                                                                 |   | 3.38% |   |   |   |   |   | 2.82% |   |   |   |   |   | 2.99% |
|    Net yield on interest-earning          |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      assets                |                                                      |   | $  16,334                                                  |   | 3.60% |   |   |   | $  14,390 |   | 3.20% |   |   |   | $  16,106 |   | 3.46% |
|                                                |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |                                                      |   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | All loans and deposits were made to borrowers in the United States.  Includes nonaccrual loans of $4,212, $4,367, and $3,340, respectively, during the periods presented.  Loans include held for sale loans. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Includes loan fees of $400, $477, and $609, respectively. |
|-----------------|-----------------------------------------------------------|

----

|                                                |  Year Ended December 31,                                              |   | Year Ended December 31,                    |
|-----------------------------------------------------|----------------------------------------------------------------------------|--------|--------------------------------------------|
|                                                | 2010 versus 2009Increase (decrease) due to                                 |   | 2009 versus 2008Increase (decrease) due to |
|                                                | Volume                                                                     |   |                                       | Rate |   | Net |   | Volume |   | Rate |   | Net |
|                                                | (Dollars in thousands)                                                     |
| Earning Assets                                      |                                                                       |   |                                       |   |   |   |   |   |   |   |   |   |
| Loans                                               | $        545                       |   |                                       | $      (930) |   | $       (385) |   | $ (2,113) |   | $(2,622) |   | $ (4,735) |
| Securities                                          | (89)                                                                       |   |                                       | (651) |   | (740) |   | 598 |   | (1,153) |   | (555) |
| Federal funds sold                                  | (2)                                                                        |   |                                       | (5) |   | (7) |   | 9 |   | (312) |   | (303) |
| Other short-term investments                        |           (37)           |   |                                       |             (7) |   |            (44) |   |          (28) |   |          (4) |   |         (32) |
|      Total interest income |           417            |   |                                       |     (1,593) |   |       (1,176) |   |    (1,534) |   |   (4,091) |   |    (5,625) |
| Interest-Bearing Liabilities                        |                                                                       |   |                                       |   |   |   |   |   |   |   |   |   |
| Interest-bearing transaction accounts               | 992                                                                        |   |                                       | (1,369) |   | (377) |   | 618 |   | (792) |   | (174) |
| Money market accounts                               | (50)                                                                       |   |                                       | (31) |   | (81) |   | (242) |   | (108) |   | (350) |
| Savings deposits                                    | (5)                                                                        |   |                                       | (8) |   | (13) |   | (18) |   | (58) |   | (76) |
| Time deposits                                       | (671)                                                                      |   |                                       | (1,590) |   | (2,261) |   | (566) |   | (2,058) |   | (2,624) |
| Borrowed funds                                      |         (172)                      |   |                                       |         (216) |   |          (388) |   |       (471) |   |       (212) |   |       (683) |
| Total interest expense                              |             94 |   |                                       |      (3,214) |   |       (3,120) |   |       (679) |   |    (3,228) |   |    (3,907) |
| Netinterestincome                              | $        323                       |   |                                       | $     1,621 |   | $       1,944 |   | $    (855) |   | $    (863) |   | $ (1,718) |
|                                                |                                                                       |   |                                       |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                         | December 31, 2008                                                                                              |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                         | WithinThreeMonths                                                                                              |   | After ThreeThroughTwelveMonths |   | WithinOneYear |   | Greater ThanOne Year orNonsensitive |   | Total |
|                                                                                                                                                                                                                                                                                                         | (Dollars in thousands)                                                                                         |
| Assets                                                                                                                                                                                                                                                                                                       |                                                                                                           |   |   |   |   |   |   |   |   |
| Earning Assets:                                                                                                                                                                                                                                                                                              |                                                                                                           |   |   |   |   |   |   |   |   |
| Loans                                                                                 | $        81,230                                                        |   | $        57,092 |   | $      138,322 |   | $     184,762 |   | $     323,084 |
| Securities (2)                                                                        | 14,487                                                                                                         |   | 14,112 |   | 28,599 |   | 73,704 |   | 102,303 |
| Funds sold and other                                                                  |          13,359                                                   |   |               2,762 |   |           16,121 |   |                   - |   |          16,121 |
| Total earning assets                                                                                 |        109,076                                                              |   |           73,966 |   |         183,042 |   |       258,466 |   |        441,508 |
| Liabilities                                                                                                                                                                                                                                                                                                  |                                                                                                           |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                                                                                                                                                                                                |                                                                                                           |   |   |   |   |   |   |   |   |
| Interest-bearing deposits:                                                                                                                                                                                                                                                                                   |                                                                                                           |   |   |   |   |   |   |   |   |
| NOW accounts (1)                                                                 | $                  - |   | $        86,795 |   | $        86,795 |   | $                 - |   | $       86,795 |
| Money market accounts                                                                 | 27,836                                                                                                         |   | - |   | 27,836 |   | - |   | 27,836 |
| Savings deposits (1)                                                                  | -                                                                                                              |   | 18,419 |   | 18,419 |   | - |   | 18,419 |
| Time deposits                                                                         |           15,361                                             |   |         114,555 |   |         129,916 |   |          57,518 |   |       187,434 |
| Total interest-bearing deposits                                                                                                                                                                                                                                                                              | 43,197                                                                                                         |   | 219,769 |   | 262,966 |   | 57,518 |   | 320,484 |
| Borrowed funds (3)                                                |           10,519                                             |   |             6,471 |   |           16,990 |   |          29,037 |   |         46,027 |
| Total interest-bearing liabilities                                                                                                                                                                                                                                                                           |           53,716                                             |   |         226,240 |   |         279,956 |   |          86,555 |   |       366,511 |
| Interest-sensitivity gap per period                                                                                                                                                                                                                                                                          | $        55,360                                                        |   | $   (152,274) |   | $      (96,914) |   | $     171,911 |   | $      74,997 |
| Cumulative gap at December 31, 2008                                                                                                                                                                                                                                                                          | $        55,360                                                        |   | $     (96,914) |   | $      (96,914) |   | $       74,997 |   | $      74,997 |
| Ratio of cumulative gap to total earningassets at December 31, 2008                                                                                                                                                                                                                                          | 12.5%                                                                                                          |   | (21.9%) |   | (21.9%) |   | 16.9% |   |   |

|                                                                           | December 31, 2009 |
|--------------------------------------------------------------------------------|-------------------|
|                                                                           |              | WithinThreeMonths |   | After ThreeThroughTwelveMonths |   | WithinOneYear |   | Greater ThanOne Year orNonsensitive |   | Total |
|                                                                           |              | (Dollars in thousands) |
| Assets                                                                         |              |   |   |   |   |   |   |   |   |   |
| Earning Assets:                                                                |              |   |   |   |   |   |   |   |   |   |
| Loans                                                                          |              | $        63,217 |   | $        55,419 |   | $      118,636 |   |    $     200,159 |   | $     318,795 |
| Securities (2)                                                                 |              | 12,099 |   | 15,059 |   | 27,158 |   | 87,460 |   | 114,618 |
| Funds sold and other                                                           |              |             7,575 |   |               296 |   |             7,871 |   |                    - |   |            7,871 |
| Total earning assets                                                           |              |           82,891 |   |          70,774 |   |         153,665 |   |        287,619 |   |        441,284 |
| Liabilities                                                                    |              |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:Interest-bearing deposits:                        |              |   |   |   |   |   |   |   |   |   |
|           NOW accounts (1)   |              | $                  - |   | $      122,363 |   | $      122,363 |   | $                 - |   | $      122,363 |
| Money market accounts                                                          |              | 25,110 |   | - |   | 25,110 |   | - |   | 25,110 |
| Savings deposits (1)                                                           |              | - |   | 15,712 |   | 15,712 |   | - |   | 15,712 |
| Time deposits                                                                  |              |          59,192 |   |          95,291 |   |         154,483 |   | 17,559 |   |         172,042 |
| Total interest-bearing deposits                                                |              | 84,302 |   | 233,366 |   | 317,668 |   | 17,559 |   | 335,227 |
| Borrowed funds (3)                                                             |              |                 26 |   |           10,404 |   |           10,430 |   |          21,607 |   |           32,037 |
| Total interest-bearing liabilities                                             |              |          84,328 |   |         243,770 |   |         328,098 |   |          39,166 |   |         367,264 |
| Interest-sensitivity gap per period                                            |              | $       (1,437) |   | $   (172,996) |   | $   (174,433) |   | $     248,453 |   | $        74,020 |
|      Cumulative gap at December 31, 2009              |              | $       (1,437) |   | $   (174,433) |   | $   (174,433) |   | $       74,020 |   | $        74,020 |
| Ratio of cumulative gap to totalearning assets at  December 31, 2009 |              | (.3%) |   | (39.5%) |   | (39.5%) |   | 16.8% |   |   |
|                                                                           |              |   |   |   |   |   |   |   |   |   |

----

|                                                                           |   | December 31, 2010                                                                                                         |
|--------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------|
|                                                                           |   | WithinThreeMonths                                                                                                         |   | After ThreeThroughTwelveMonths |   | WithinOneYear |   | Greater ThanOne Year orNonsensitive |   | Total |
|                                                                           |   | (Dollars in thousands)                                                                                                    |
| Assets                                                                         |   |                                                                                                                      |   |   |   |   |   |   |   |   |
| Earning Assets:                                                                |   |                                                                                                                      |   |   |   |   |   |   |   |   |
| Loans                                                                          |   | $         62,439                                                             |   | $       62,095 |   | $     124,534 |   | $   208,039 |   | $      332,573 |
| Securities (2)                                                                 |   | 12,011                                                                                                                    |   | 7,592 |   | 19,603 |   | 87,533 |   | 107,136 |
| Funds sold and other                                                           |   |             9,083                                             |   |          12,443 |   |          21,526 |   |                 - |   |           21,526 |
| Total earning assets                                                           |   |           83,533                                                        |   |          82,130 |   |        165,663 |   |     295,572 |   |         461,235 |
| Liabilities                                                                    |   |                                                                                                                      |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:Interest-bearing deposits:                        |   |                                                                                                                      |   |   |   |   |   |   |   |   |
|           NOW accounts (1)   |   | $                  -            |   | $     149,551 |   | $     149,551 |   | $               - |   | $      149,551 |
| Money market accounts                                                          |   | 18,853                                                                                                                    |   | - |   | 18,853 |   | - |   | 18,853 |
| Savings deposits (1)                                                           |   | -                                                                                                                         |   | 14,043 |   | 14,043 |   | - |   | 14,043 |
| Time deposits                                                                  |   |           34,437                                                        |   |          72,886 |   |        107,323 |   | 58,398 |   |         165,721 |
| Total interest-bearing deposits                                                |   | 53,290                                                                                                                    |   | 236,480 |   | 289,770 |   | 58,398 |   | 348,168 |
| Borrowed funds (3)                                                             |   |                     - |   |            3,075 |   |           3,075 |   |        27,032 |   |           30,107 |
| Total interest-bearing liabilities                                             |   |           53,290                                                        |   |        239,555 |   |       292,845 |   |        85,430 |   |         378,275 |
| Interest-sensitivity gap per period                                            |   | $        30,243                                                                   |   | $  (157,425) |   | $ (127,182) |   | $   210,142 |   | $        82,960 |
|      Cumulative gap at December 31, 2010              |   | $        30,243                                                                   |   |  $  (127,182) |   | $ (127,182) |   | $     82,960 |   | $        82,960 |
| Ratio of cumulative gap to totalearning assets at  December 31, 2010 |   | 6.6%                                                                                                                      |   | (27.6%) |   | (27.6%) |   | 18.0% |   |   |

| (1)   | NOW and savings accounts are subject to immediate withdrawal and repricing.  These deposits do not tend to immediately react to changes in interest rates and the Company believes these deposits are a stable and predictable funding source.  Therefore, these deposits are included in the repricing period that management believes most closely matches the periods in which they are likely to reprice rather than the period in which the funds can be withdrawn contractually. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Securities include mortgage backed and other installment paying obligations based upon stated maturity dates. |
|-----------------|---------------------------------------------------------------------------------------------------------------|

| (3)   | Does not include subordinated debentures of  $10,310,000. |
|-----------------|---------------------------------------------------------------------|

----

|      Local Unemployment Rate                 |
|-----------------------------------------------------------------------|
|      Insurance issues (Windpool areas)       |
|      Bankruptcy Rates (increasing/declining) |
|      Local Commercial R/E Vacancy rates      |
|      Established market/new market           |
|      Hurricane threat                        |

----

|      Gross Domestic Product (GDP)                            |
|---------------------------------------------------------------------------------------|
|      Home Sales                                              |
|      Consumer Price Index (CPI)                              |
|      Interest Rate Environment (increasing/steady/declining) |
|      Single Family construction starts                       |
|      Inflation Rate                                          |
|      Retail Sales                                            |

|      Second Mortgages                       |
|----------------------------------------------------------------------|
|      Single Pay Loans                       |
|      Non-Recourse Loans                     |
|      Limited Guaranty Loans                 |
|      Loan to Value Exceptions               |
|      Secured by Non-Owner Occupied property |
|      Raw Land Loans                         |
|      Unsecured Loans                        |

|      Delinquency Trends                                                       |
|--------------------------------------------------------------------------------------------------------|
|      Non-Accrual Trends                                                       |
|      Net Charge Offs                                                          |
|      Loan Volume Trends                                                       |
|      Non-Performing Assets                                                    |
|      Underwriting Standards/Lending Policies                                  |
|      Experience/Depth of Bank Lending     Management |
|                                                                                                   |

----

----

|                                                              | December 31, 2010                                                                             |
|-------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|
|                                                              | (In thousands)                                                                                |
|                                                              |                                                                                          |   |   |   |   |
|                                                              | Past Due 30to 89 Days                                                                         |   | Past Due 90 days ormore and still accruing |   | Non-Accrual |
|                                                              |                                                                                          |   |   |   |   |
| Real Estate-construction                                          | $       593                  |   | $            1         |   | $       1,433          |
| Real Estate-mortgage                                              | 3,673                                                           |   | 153         |   | 893          |
| Real Estate-non farm nonresidential                               | 438                                                             |   | 737         |   | 1,452          |
| Commercial                                                        | 740                                                             |   | 144         |   | 386          |
| Consumer                                                          |          262       |   |             36         |   |               48          |
|           Total | $    5,706                                  |   | $     1,071         |   | $       4,212          |

|                                                              | December 31, 2009                                                                                   |
|-------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|
|                                                              | (In thousands)                                                                                      |
|                                                              |                                                                                                |   |   |   |   |
|                                                              | Past Due 30to 89 Days                                                                               |   | Past Due 90 days or More and still accruing |   | Non-Accrual |
|                                                              |                                                                                                |   |   |   |   |
| Real Estate-construction                                          | $    3,737                                   |   | $        205           |   | $       1,890              |
| Real Estate-mortgage                                              | 2,104                                                            |   | 74           |   | 1,416              |
| Real Estate-non farm nonresidential                               | 3,004                                                            |   | 735           |   | 589              |
| Commercial                                                        | 897                                                              |   | 419           |   | 452              |
| Consumer                                                          |          619        |   |            14           |   |              20              |
|           Total | $  10,361                                              |   | $    1,447           |   | $      4,367              |

----

|                                                                                                                                                                                                                                                                                                                                                                                                  | Years Ended December 31,                                                                |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                  | 2010                                                                                    |   | 2009 |   | 2008 |   | 2007 |   | 2006 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                    |   |   |   |   |   |   |   |   |
| Average loans outstanding                                                                      | $     328,950                                                  |   | $     320,495 |   | $      349,572 |   | $      338,368 |   | $      237,578 |
| Loans outstanding at year end                                                                  | $     332,573                                                  |   | $     318,795 |   | $      323,084 |   | $      371,223 |   | $      287,875 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                    |   |   |   |   |   |   |   |   |
| Total nonaccrual loans                                                                         | $         4,212                            |   | $         4,367 |   | $          3,340 |   | $          2,429 |   | $          1,789 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                    |   |   |   |   |   |   |   |   |
| Beginning balance of allowance                                                                 | $         4,762                            |   | $         4,785 |   | $          4,221 |   | $          3,793 |   | $          2,367 |
| Loans charged-off                                                                              |         (1,370)                                 |   |          (1,396) |   |          (1,784) |   |             (950) |   |             (186) |
| Total loans charged-off                                                                        |         (1,370)                                 |   |          (1,396) |   |          (1,784) |   |             (950) |   |             (186) |
| Total recoveries                                                                               |               242 |   |                167 |   |               143 |   |                 57 |   |                107 |
| Net loans charged-off                                                                          | (1,128)                                                                                 |   | (1,229) |   | (1,641) |   | (893) |   |                 (79) |
| Acquisition                                                                                    | -                                                                                       |   | - |   | - |   | - |   | 705 |
| Provision for loan losses                                                                      |              983       |   |            1,206 |   |            2,205 |   |            1,321 |   |               800 |
| Balance at year end                                                                            | $        4,617                                  |   | $         4,762 |   | $         4,785 |   | $         4,221 |   | $         3,793 |
|                                                                                                                                                                                                                                                                                                                                                                                                  |                                                                                    |   |   |   |   |   |   |   |   |
| Net charge-offs to average loans                                                               | .34%                                                                                    |   | .38% |   | .47% |   | .26% |   | .03% |
| Allowance as percent of total loans                                                            | 1.39%                                                                                   |   | 1.49% |   | 1.48% |   | 1.14% |   | 1.32% |
| Nonperforming loans as a percentage of total loans                                                                                                                                                                                                                                                                                                                                                    | 1.27%                                                                                   |   | 1.37% |   | 1.03% |   | .65% |   | .62% |
| Allowance as a multiple of nonaccrual loans                                                                                                                                                                                                                                                                                                                                                           | 1.1X                                                                                    |   | 1.1X |   | 1.4X |   | 1.7X |   | 2.1X |

|                             | Allowance                    |
|----------------------------------|------------------------------|
|                             | (In thousands)               |
| Allocated:                       |                         |
|    Impaired loans | $    738 |
|    Graded loans   |    3,879      |
|                             | $ 4,617                      |
|                             |                         |

----

|         The following table represents the activity of the allowance for loan losses for the years 2009 and  2010.  |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

| Analysis of the Allowance for Loan Losses        |                                                                                                |   |
|--------------------------------------------------|-----------------------------------------------------------------------------------------------------|--------|
|                                             |                                                                                                |   |
|                                             |      Years Ended December 31,                                                   |   |   |
|                                             | 2010                                                                                                |   | 2009 |   |   |
|                                             | (Dollars in thousands)                                                                              |   |   |
|                                             |                                                                                                |   |   |   |   |
| Balance at beginning of  year          | $           4,762                            |   | $          4,785 |   |   |
| Charge-offs:                                     |                                                                                                |   |   |   |   |
|     Real Estate-construction | 312                                                                                                 |   | 296 |   |   |
|     Real Estate-farmland     | -                                                                                                   |   | 2 |   |   |
|     Real Estate-mortgage     | 460                                                                                                 |   | 443 |   |   |
| Real Estate-nonfarm residential                  | 43                                                                                                  |   | - |   |   |
|     Commercial               | 367                                                                                                 |   | 389 |   |   |
|     Consumer                 |                 188 |   |               266 |   |   |
|        Total  | 1,370                                                                                               |   | 1,396 |   |   |
| Recoveries:                                      |                                                                                                |   |   |   |   |
| Real Estate-construction                         | 14                                                                                                  |   | 45 |   |   |
| Real Estate-mortgage                             | 51                                                                                                  |   | 4 |   |   |
| Commercial                                       | 71                                                                                                  |   | 3 |   |   |
| Consumer                                         |                 106 |   |               115 |   |   |
|        Total  |                 242 |   |               167 |   |   |
| Net charge-off                                   |              1,128                 |   |            1,229 |   |   |
| Provision for loan losses                        |                 983 |   |            1,206 |   |   |
| Balance at end of year                           | $           4,617                            |   | $         4,762 |   |   |

|        The following tables represent how the allowance for loan losses is allocated to a particular loan type as well as the percentage of the category to total loans at December 31, 2010 and 2009. |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                      |   |   |
| Allocation of the Allowance for Loan Losses                                                                                                                                                                                               |   |   |

|                                                  | 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%                               |   |   |

|                                                  |                                                                                                                        |         |
|-------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------|--------------|
|                                                  | December 31, 2009                                                                                                           |         |   |
|                                                  | (Dollars in thousands)                                                                                                      |         |   |
|                                                  | Amount                                                                                                       |         | % of loansin each category to total loans |   |   |
|                                                  |                                                                                                                        |         |   |   |   |
| Commercial Non Real Estate                            | $    1,015                                  |         | 13.9% |   |   |
| Commercial Real Estate                                | 2,564                                                           |         | 62.2% |   |   |
| Consumer Real Estate                                  | 687                                                             |         | 17.8% |   |   |
| Consumer                                              | 317                                                             |    |  3.9% |   |   |
| Unallocated                                           |         179             |         |  2.2% |   |   |
|         Total | $   4,762                                        |         | 100% |   |   |

----

| Noninterest Expense |   |
|---------------------|--------|

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | Years ended December 31,       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | 2010                                |   | 2009 |   | 2008 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             | (In thousands )                |
| Salaries and employee benefits                                                                                   | $   8,693            |   | $     8,401 |   | $   9,455 |
| Occupancy                                                                                                        | 1,052                               |   | 1,071 |   | 1,146 |
| Equipment                                                                                                        | 976                                 |   | 900 |   | 1,055 |
| Marketing and public relations                                                                                   | 312                                 |   | 329 |   | 250 |
| Data processing                                                                                                  | 12                                  |   | 30 |   | 20 |
| Supplies and printing                                                                                            | 284                                 |   | 278 |   | 352 |
| Telephone                                                                                                        | 271                                 |   | 249 |   | 260 |
| Correspondent services                                                                                           | 118                                 |   | 110 |   | 110 |
| Deposit and other insurance                                                                                      | 1,118                               |   | 1,019 |   | 474 |
| Professional and consulting fees                                                                                 | 924                                 |   | 830 |   | 845 |
| Postage                                                                                                          | 148                                 |   | 173 |   | 196 |
| ATM fees                                                                                                         | 225                                 |   | 217 |   | 206 |
| Other                                                                                                            |      1,710 |   |        1,716 |   |      1,629 |
| Total                                                                                                                                     | $ 15,843                            |   | $   15,323 |   | $ 15,998 |

----

|                                              | December 31,                                                |
|---------------------------------------------------|-------------------------------------------------------------|
|                                              |           2010 |   | 2009 |   | 2008 |
|                                              | Amount                                                      |   | Percentof Total |   | Amount |   | Percentof Total |   | Amount |   | Percentof Total |
|                                              |                                                        |   |   |   | (Dollars in Thousands) |   |   |   |   |
|                                              |                                                        |   |   |   |   |   |   |   |   |   |   |
| Mortgage loans held for sale                      | $     2,938                        |   | 0.9% |   | $     3,692 |   | 1.2% |   | $     3,113 |   | 1.0% |
| Commercial, financial and agricultural            | 48,427                                                      |   | 14.6% |   | 43,229 |   | 13.6% |   | 37,861 |   | 11.7% |
| Real Estate:   Mortgage-commercial | 109,073                                                     |   | 32.8% |   | 87,492 |   | 27.4% |   | 84,181 |   | 26.1% |
|    Mortgage-residential            | 102,425                                                     |   | 30.8% |   | 102,738 |   | 32.2% |   | 100,603 |   | 31.1% |
|    Construction                    | 58,962                                                      |   | 17.7% |   | 68,695 |   | 21.5% |   | 81,178 |   | 25.1% |
| Consumer and other                                |     10,748                              |   |    3.2% |   |      12,949 |   |     4.1% |   |      16,149 |   |        5.0% |
| Total loans                                       | 332,573                                                     |   |   100% |   | 318,795 |   |    100% |   | 323,085 |   |       100% |
| Allowance for loan losses                         |     (4,617)                             |   |   |   |     (4,762) |   |   |   |     (4,785) |   |   |
| Net loans                                         | $ 327,956                                                   |   |   |   | $ 314,033 |   |   |   | $ 318,300 |   |   |
|                                              |                                                        |   |   |   |   |   |   |   |   |   |   |

----

|                                   | December 31, 2010                                                                                                                                                        |
|----------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                   | One Yearor Less                                                                                                                                                          |   | Over One YearThroughFive Years |   | Over FiveYears |   | Total |
|                                   | (Dollars in thousands)                                                                                                                                                   |
|                                   |                                                                                                                                                                     |
| Commercial, financial and agricultural | $         20,888                            |   | $       25,223                |   | $     2,316                |   | $    48,427        |
| Real estate – construction       |            58,962                 |   |                   -                |   |                -                |   |       58,962        |
|                                   | $         79,850                            |   | $       25,223                |   | $     2,316                |   | $  107,389        |
|                                   |                                                                                                                                                                     |   |   |   |   |   |   |
| Loans maturing after one year with:    |
| Fixed interest rates                   |                                                                                                                                                                     |   |   | $    22,170        |
| Floating interest rates                |                                                                                                                                                                     |   |   |         5,369        |
|                                   |                                                                                                                                                                     |   |   |   |   |   |   |   | $    27,539        |

|                                                                                                                                                                                                                                                                                                                                                                                                   | December 31                                                                           |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                   | 2010                                                                                  |   | 2009 |   | 2008 |
|                                                                                                                                                                                                                                                                                                                                                                                                   | (In thousands)                                                                        |
| Available-for-sale                                                                                                                                                                                                                                                                                                                                                                                     |                                                                                  |   |   |   |   |
| U. S. Government agencies                                                                                                                                                                                                                                                                                                                                                                              | $   41,173                                                             |   | $    59,519 |   | $ 64,814 |
| States and municipal subdivisions                                                                                                                                                                                                                                                                                                                                                                      | 54,673                                                                                |   | 41,982 |   | 23,093 |
| Corporate obligations                                                                                                                   | 7,702                                                                                 |   | 9,772 |   | 10,813 |
|       Mutual finds                                                                    |           986                       |   |            958 |   |        959 |
|       Total available-for-sale                                                        |    104,534                                                             |   |     112,231 |   |   99,679 |
| Held-to-maturity                                                                                                                                                                                                                                                                                                                                                                                       |                                                                                  |   |   |   |   |
| U.S. Government agencies                                                                                                                |               3 |   |                3 |   |          12 |
| Total                                                                                                                                                                                                                                                                                                                                                                                                  | $ 104,537                                                                             |   | $  112,234 |   | $ 99,691 |

----

|                                                | December 31, 2010                                                    |
|-----------------------------------------------------|----------------------------------------------------------------------|
|                                                |                                                                 |   | After One But             |   | After Five But             |   |   |
| ($ in thousands)                                    | Within One Year              |   | Within Five Years         |   | Within Ten Years          |   | After Ten Years               |
|                                                | Amount                                                               |   | Yield |   | Amount |   | Yield |   | Amount |   | Yield |   | Amount |   | Yield |
| Held-to-maturity:                                   |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    U.S. Government agencies (2)      | $           - |   | - |   | $           - |   | - |   | $           - |   | - |   | $           - |   | - |
|                                                |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale:                                 |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    U.S. Government agencies (3)      | 1,023                                                                |   | 4.90% |   | 19,827 |   | 1.41% |   | 2,005 |   | .98% |   | - |   | - |
|    States and municipal subdivisions | 7,504                                                                |   | 3.28% |   | 31,478 |   | 3.55% |   | 10,854 |   | 5.28% |   | 4,837 |   | 6.02% |
|    Corporate obligations and other   |      2,002                                  |   | 1.19% |   |      2,008 |   | .45% |   |         484 |   | 4.99% |   |      3,208 |   | 2.17% |
|                                                |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total investment securities                         |                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    available-for-sale                | $ 10,529                                                             |   |   |   | $  53,313 |   |   |   | $ 13,343 |   |   |   | $  8,045 |   |   |

|                                   |  December 31,                  |
|----------------------------------------|-------------------------------------|
| ($ in thousands)                       |       2010 |   |       2009 |   |   2008 |
|                                   |                                |   | Percent of |   |   |   | Percent of |   |   |   | Percent of |
|                                   | Amount                              |   | Deposits  |   | Amount |   | Deposits  |   | Amount |   | Deposits  |
|                                   |                                |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing accounts           | $  48,311                 |   | 12.2% |   | $  48,527 |   | 12.6% |   | $  57,594 |   | 15.2% |
| NOW accounts                           | 149,551                             |   | 37.7% |   | 122,363 |   | 31.9% |   | 86,795 |   | 22.9% |
| Money market accounts                  | 18,853                              |   | 4.8% |   | 25,110 |   | 6.5% |   | 27,836 |   | 7.4% |
| Savings accounts                       | 14,043                              |   | 3.5% |   | 15,712 |   | 4.1% |   | 18,419 |   | 4.9% |
| Time deposits less than $100,000       | 65,393                              |   | 16.5% |   | 82,116 |   | 21.4% |   | 99,491 |   | 26.3% |
| Time deposits of $100,000 or over      |   100,328                 |   |    25.3% |   |     89,926 |   |     23.5% |   |     87,944 |   |    23.3% |
|     Total deposits | $396,479                            |   |     100% |   | $383,754 |   |      100% |   | $378,079 |   |     100% |

----

| Maturities of Certificates of Depositof  $100,000 or More  |
|---------------------------------------------------------------------------|
|                                                                      |   |   | After Three |   |   |   |   |
|                                                                      | Within Three |   | Through |   | After Twelve |   |   |
| (In thousands)                                                            | Months |   | Twelve Months |   | Months |   | Total |
|                                                                      |   |   |              |   |   |   |   |
| December 31, 2010                                                         | $       23,811 |   | $      43,426 |   | $       33,091 |   | $      100,328 |
|                                                                      |   |   |   |   |   |   |   |

----

|                     |   |        |   |        |   |         |   |            |   |   |
|--------------------------|--------|-------------|--------|-------------|--------|--------------|--------|-----------------|--------|--------|
|                     |   | Adequately  |   | Well        |   | The Company  |   | Subsidiary Bank |
| Capital Ratios           |   | Capitalized |   | Capitalized |   | December 31, |   | December 31,    |
|                     |   |        |   |        |   | 2010         | 2009   |            | 2010   | 2009   |
|                     |   |        |   |        |   |         |   |            |   |
| Leverage                 |   | 4.0%        |   | 5.0%        |   | 13.1%        | 10.8%  |            | 10.7%  | 10.7%  |
| Risk-based capital:      |   |        |   |        |   |         |   |            |   |   |
|    Tier 1 |   | 4.0%        |   | 6.0%        |   | 18.4%        | 15.3%  |            | 15.0%  | 15.1%  |
|    Total  |   | 8.0%        |   | 10.0%       |   | 19.6%        | 16.5%  |            | 16.2%  | 16.3%  |
|                     |   |        |   |        |   |         |   |            |   |   |

----

| Ratios                                                          |
|-----------------------------------------------------------------|
|                                                            |   |   |   |
|                                                            | 2010 | 2009 | 2008 |
| Return on assets (net income applicable                         |   |   |   |
|      to common stockholders divided by |   |   |   |
|      average total assets)             | .45% | .30% | .37% |
|                                                            |   |   |   |
| Return on equity (net income applicable                         |   |   |   |
|      to common stockholders divided by |   |   |   |
|      average equity)                   | 5.1% | 3.5% | 5.1% |
|                                                            |   |   |   |
| Dividend payout ratio (dividends per                            |   |   |   |
|     share divided by net income per         |   |   |   |
|     common share)                           | 20.3% | - | 36.3% |
|                                                            |   |   |   |
| Equity to asset ratio (average equity                           |   |   |   |
|     divided  by average total assets)  | 8.8% | 8.7% | 7.3% |
|                                                            |   |   |   |

----

----

----

| ASSETS                                                          | 2010                                                      |   | 2009                                                            |
|-----------------------------------------------------------------|-----------------------------------------------------------|--------|-----------------------------------------------------------------|
|                                                            |                                                      |   |                                                            |
| Cash and due from banks                                         | $   12,450,296                             |   | $       8,119,637            |
| Interest-bearing deposits with banks                            | 12,443,412                                                |   | 296,236                                                         |
| Federal funds sold                                              |       9,083,000             |   |          7,575,000 |
| Total cash and cash equivalents                                 | 33,976,708                                                |   | 15,990,873                                                      |
| Held-to-maturity securities (fair value of  $2,763 in |                                                      |   |                                                            |
| 2010 and $3,047 in 2009)                                        | 2,640                                                     |   | 2,983                                                           |
| Available-for-sale securities                                   | 104,534,242                                               |   | 112,231,024                                                     |
| Other securities                                                |         2,598,950 |   |          2,383,650 |
| Total securities                                                | 107,135,832                                               |   | 114,617,657                                                     |
| Loans held for sale                                             | 2,937,834                                                 |   | 3,692,316                                                       |
| Loans, net of allowance for loan losses of $4,617,080           |                                                      |   |                                                            |
| in 2010 and $4,762,069 in 2009                                  | 325,017,844                                               |   | 310,340,494                                                     |
| Interest receivable                                             | 2,022,851                                                 |   | 2,318,207                                                       |
| Premises and equipment                                          | 14,993,926                                                |   | 14,279,291                                                      |
| Cash surrender value of life insurance                          | 6,083,567                                                 |   | 5,857,074                                                       |
| Goodwill                                                        | 702,213                                                   |   | 702,213                                                         |
| Other assets                                                    |      10,174,000                  |   |          9,754,144 |
| Total assets                                                    | $ 503,044,775                                             |   | $   477,552,269                                  |

| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                  |                                                |   |                                                            |
|-------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|--------|-----------------------------------------------------------------|
|                                                                                                        |                                                |   |                                                            |
| Deposits:                                                                                                   |                                                |   |                                                            |
| Noninterest-bearing                                                                                         | $   48,312,231                       |   | $     48,527,218                       |
| Interest-bearing                                                                                            |    348,167,188                       |   |      335,226,686                       |
| Total deposits                                                                                              | 396,479,419                                         |   | 383,753,904                                                     |
| Interest payable                                                                                            | 410,919                                             |   | 672,355                                                         |
| Borrowed funds                                                                                              | 30,106,895                                          |   | 32,037,082                                                      |
| Subordinated debentures                                                                                     | 10,310,000                                          |   | 10,310,000                                                      |
| Other liabilities                                                                                           |       8,639,457       |   |          7,162,262 |
|       Total liabilities                                                       |    445,946,690                       |   |       433,935,603                 |
| Stockholders’ Equity:                                                                                 |                                                |   |                                                            |
| Preferred stock, no par value, $1,000 per share liquidation,                                                |                                                |   |                                                            |
| 10,000,000 shares authorized; 17,123 and 5,000 shares                                                       |                                                |   |                                                            |
|          issued and outstanding in 2010 and 2009, respectively | 16,938,571                                          |   | 4,773,010                                                       |
| Common stock, par value $1 per share: 10,000,000 shares                                                     |                                                |   |                                                            |
| authorized; 3,058,716 and 3,046,363 shares issued and                                                       |                                                |   |                                                            |
| outstanding  in 2010 and 2009, respectively                                                       | 3,058,716                                           |   | 3,046,363                                                       |
| Additional paid-in capital                                                                                  | 23,418,761                                          |   | 23,418,504                                                      |
| Retained earnings                                                                                           | 14,722,496                                          |   | 12,943,540                                                      |
| Accumulated other comprehensive loss                                                                        | (576,814)                                           |   | (101,106)                                                       |
| Treasury stock, at cost                                                                                     |        (463,645) |   |          (463,645) |
| Total stockholders’ equity                                                                            |     57,098,085                  |   |        43,616,666            |
| Total liabilities and stockholders’ equity                                                            | $503,044,775                                        |   | $   477,552,269                                  |

----

| INTEREST INCOME                               | 2010                                                                                             |   | 2009                                                                                             |
|-----------------------------------------------|--------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|
| Interest and fees on loans                    | $      20,289,150                                                  |   | $      20,674,170                                                  |
| Interest and dividends on securities:         |                                                                                             |   |                                                                                             |
| Taxable interest and dividends                | 1,891,322                                                                                        |   | 2,878,125                                                                                        |
| Tax-exempt interest                           | 1,230,024                                                                                        |   | 983,326                                                                                          |
| Interest on federal funds sold                | 21,339                                                                                           |   | 28,143                                                                                           |
| Interest on deposits in banks                 |                21,577 |   |                65,993 |
|     Total interest income |         23,453,412                                       |   |         24,629,757                                       |

| INTEREST EXPENSE                                    |                                                                                  |   |                                                                  |
|-----------------------------------------------------|---------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|
| Interest on time deposits of $100,000 or more       | 1,814,201                                                                             |   | 2,246,314                                                             |
| Interest on other deposits                          | 3,930,024                                                                             |   | 6,230,761                                                             |
| Interest on borrowed funds                          |           1,375,067                 |   |           1,762,639 |
| Total interest expense                              |           7,119,292                 |   |         10,239,714            |
| Net interest income                                 | 16,334,120                                                                            |   | 14,390,043                                                            |
| Provision for loan losses                           |              982,663 |   |          1,206,343       |
| Net interest income after provision for loan losses |         15,351,457                            |   |        13,183,700                  |

| OTHER INCOME                                                                                                                    |                                                                  |   |                                                                                  |
|---------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|
| Service charges on deposit accounts                                                                                             | 2,373,684                                                             |   | 2,476,904                                                                             |
| Other service charges and fees                                                                                                  | 1,697,123                                                             |   | 1,876,477                                                                             |
| Bank owned life insurance income                                                                                                | 226,493                                                               |   | 197,177                                                                               |
| Loss on sale of other real estate                                                                                               | (20,075)                                                              |   | (20,831)                                                                              |
| Other                                                                                                                           | 89,949                                                                |   |           (21,300)                  |
|      Impairment loss on securities:                                                                    |                                                                  |   |                                                                                  |
|          Total other-than-temporary impairment loss                                | (1,713,525)                                                           |   | (689,579)                                                                             |
|          Less:  Portion of loss recognized in other comprehensive income |           1,241,714 |   |              578,151 |
|          Net impairment loss recognized in earnings                                |           (471,811) |   |           (111,428)                 |
| Total other income                                                                                                              |           3,895,363 |   |           4,396,999                 |

| OTHER EXPENSE                                          |                                                                  |   |                                                                  |
|--------------------------------------------------------|-----------------------------------------------------------------------|--------|-----------------------------------------------------------------------|
| Salaries                                               | 7,268,974                                                             |   | 7,098,129                                                             |
| Employee benefits                                      | 1,423,630                                                             |   | 1,302,807                                                             |
| Occupancy                                              | 1,051,537                                                             |   | 1,082,818                                                             |
| Furniture and equipment                                | 975,791                                                               |   | 1,104,138                                                             |
| Supplies and printing                                  | 284,352                                                               |   | 278,376                                                               |
| Professional and consulting fees                       | 923,626                                                               |   | 830,387                                                               |
| Marketing and public relations                         | 311,533                                                               |   | 328,690                                                               |
|      FDIC and OCC assessments | 1,066,963                                                             |   | 968,524                                                               |
| Other                                                  |           2,536,472 |   |           2,329,322 |
| Total other expense                                    |         15,842,878            |   |         15,323,191            |
|                                                   |                                                                  |   |                                                                  |
|                                                   |                                                                  |   |                                                                  |

----

| THE FIRST BANCSHARES, INC.CONSOLIDATED STATEMENTS OF INCOMEYEARS ENDED DECEMBER 31, 2010 AND 2009  |
|---------------------------------------------------------------------------------------------------------|
| Continued: |  2010 |   |  2009 |
|------------|------------|--------|------------|

|                                                                       |                                                                                                                   |   |                                                                                                                   |
|----------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------|
|                                                                       |                                                                                                                   |   |                                                                                                                   |
| Income before income taxes                                                 | 3,403,942                                                                                                              |   | 2,257,508                                                                                                              |
| Income taxes                                                               | 855,198                                                                                                                |   |              514,111                                  |
|                                                                       |                                                                                                                   |   |                                                                                                                   |
| Net income                                                                 | 2,548,744                                                                                                              |   |     1,743,397                                                                                      |
| Preferred dividends                                                        | 273,629                                                                                                                |   |        225,694                                                                      |
| Preferred stock accretion                                                  | 42,561                                                                                                                 |   |                56,748                       |
|      Net income applicable to common stockholders | $        2,232,554                                                             |   | $        1,460,955                                                             |
|                                                                       |                                                                                                                   |   |                                                                                                                   |
| Net income per share:                                                      |                                                                                                                   |   |                                                                                                                   |
|      Basic                                        | $                   .84 |   | $                   .58 |
|      Diluted                                      | .84                                                                                                                    |   | .58                                                                                                                    |
| Net income applicable to common stockholders:                              |                                                                                                                   |   |                                                                                                                   |
| Basic                                                                      | $                   .74 |   | $                   .49 |
| Diluted                                                                    | .74                                                                                                                    |   | .49                                                                                                                    |

----

|                                                                   |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|------------------------------------------------------------------------|----------------------------------------------|-------------------------------------------------------------|----------------------------------------------------------------------|----------------------------------------------------------------------|---------------------------------------------------------------------------------------|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------|
|                                                                   |     Compre-hensiveIncome |      CommonStock    |      PreferredStock     |      Stock     Warrants |     AdditionalPaid-in    Capital    |      Retained   Earnings   | Accumulated   Other          ComprehensiveIncome (Loss) |                      TreasuryStock    |          Total      |
| Balance,                                                               |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|    January 1, 2009                                      |                                         | $3,016,695                                                  | -                                                                    | -                                                                    | $22,941,924                                                                           | $11,482,585                                                             | $ (409,473)                                                                                                         | $ (463,645)                                                                                                                                              | $36,568,086                                                                          |
| Comprehensive                                                          |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|   Income:                                                    |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
| Net income 2009                                                        | $1,743,397                                   | -                                                           | -                                                                    | -                                                                    | -                                                                                     | 1,743,397                                                               | -                                                                                                                   | -                                                                                                                                                        | 1,743,397                                                                            |
|      Non-credit related                       |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          impairment       |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          loss on          |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          investment       |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          securities,      |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          net of tax       | (381,580)                                    | -                                                           | -                                                                    | -                                                                    | -                                                                                     | -                                                                       | (381,580)                                                                                                           | -                                                                                                                                                        | (381,580)                                                                            |
| Net change in                                                          |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
| unrealized gain                                                        |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
| on available-                                                          |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
| for-sale                                                               |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
| securities,                                                            |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
| net of tax                                                             | 702,010                                      | -                                                           | -                                                                    | -                                                                    | -                                                                                     | -                                                                       | 702,010                                                                                                             | -                                                                                                                                                        | 702,010                                                                              |
|      Net change in                            |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          unrealized       |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          loss on          |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          loans held for   |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|          sale, net of tax |      (12,063)       | -                                                           | -                                                                    | -                                                                    | -                                                                                     | -                                                                       | (12,063)                                                                                                            | -                                                                                                                                                        | (12,063)                                                                             |
| Comprehensive                                                          |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|   Income                                                     | $2,051,764                                   |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
| Issuance of                                                            |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|   Preferred                                                  |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|   stock and warrants                                         |                                         | -                                                           | 4,716,262                                                            | 283,738                                                              | -                                                                                     | -                                                                       | -                                                                                                                   | -                                                                                                                                                        | 5,000,000                                                                            |
| Accretion of                                                           |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|    Preferred                                            |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|    stock discount                                       |                                         | -                                                           | 56,748                                                               | -                                                                    | -                                                                                     | (56,748)                                                                | -                                                                                                                   | -                                                                                                                                                        | -                                                                                    |
| Dividends on                                                           |                                         |                                                        |                                                                 |                                                                 |                                                                                  |                                                                    |                                                                                                                |                                                                                                                                                     |                                                                                 |
|    preferred stock                                      |                                         | -                                                           | -                                                                    | -                                                                    | -                                                                                     | (225,694)                                                               | -                                                                                                                   | -                                                                                                                                                        | (225,694)                                                                            |

----

| Continued:                                                             |     Compre-hensiveIncome                |   |      CommonStock   |   |      PreferredStock    |   |      Stock    Warrants |   |     AdditionalPaid-in    Capital    |   |      RetainedEarnings |   |    AccumulatedOther       ComprehensiveIncome (Loss) |   |      Treasury Stock     |   |       Total |
|------------------------------------------------------------------------|-------------------------------------------------------------|--------|-------------------------------------------------------|--------|----------------------------------------------------------------|--------|----------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|-------------------------------------------|
|                                                                   |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| Exercise of stock                                                      |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|   Options                                                    |                                                        |   |      29,668                  |   |  -                                                        |   | -                                                              |   |      192,842                                                 |   |  -                                        |   |  -                                                                                           |   | -                                                                         |   |      222,510     |
| Balance,                                                               |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|   December 31, 2009                                          |                                                        |   |  3,046,363                                       |   |  4,773,010                                                |   |      283,738                          |   |  23,134,766                                                                      |   | 12,943,540                                     |   |  (101,106)                                                                                   |   | (463,645)                                                                 |   | 43,616,666                                |
|                                                                   |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|                                                                   |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| Comprehensive                                                          |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|   Income:                                                    |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| Net income 2010                                                        | $2,548,744                                                  |   | -                                                     |   | -                                                              |   | -                                                              |   | -                                                                                     |   | 2,548,744                                      |   | -                                                                                                 |   | -                                                                         |   | 2,548,744                                 |
|      Non-credit related                       |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          impairment       |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          loss on          |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          investment       |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          securities,      |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          net of tax       | (819,528)                                                   |   | -                                                     |   | -                                                              |   | -                                                              |   | -                                                                                     |   | -                                              |   | (819,528)                                                                                         |   | -                                                                         |   | (819,528)                                 |
| Net change in                                                          |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| unrealized gain                                                        |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| on available-                                                          |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| for-sale                                                               |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| securities,                                                            |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| net of tax                                                             | 335,313                                                     |   | -                                                     |   | -                                                              |   | -                                                              |   | -                                                                                     |   | -                                              |   | 335,313                                                                                           |   | -                                                                         |   | 335,313                                   |
|      Net change in                            |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          unrealized       |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          loss on          |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          loans held for   |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|          sale, net of tax |          8,507 |   | -                                                     |   | -                                                              |   | -                                                              |   | -                                                                                     |   | -                                              |   | 8,507                                                                                             |   | -                                                                         |   | 8,507                                     |
| Comprehensive                                                          |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|   Income                                                     | $2,073,036                                                  |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
| Issuance of                                                            |                                                        |   |                                                  |   |                                                           |   |                                                           |   |                                                                                  |   |                                           |   |                                                                                              |   |                                                                      |   |                                      |
|   preferred stock                                            |                                                        |   | -                                                     |   | 12,123,000                                                     |   | -                                                              |   | -                                                                                     |   | -                                              |   | -                                                                                                 |   | -                                                                         |   | 12,123,000                                |

----

| Continued:                           |   |      CommonStock                                               |   |      PreferredStock                                                         |   |      Stock    Warrants                        |   |     AdditionalPaid-in    Capital    |   |      RetainedEarnings                                                                |   |              Accumulated         Other         Comprehensive  Income (Loss) |   |      TreasuryStock                                              |   |       Total                    |
|--------------------------------------|--------|---------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------|
|                                 |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
| Accretion of                         |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|    Preferred          |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|    stock discount     |   | -                                                                                                 |   | 42,561                                                                                                              |   | -                                                                                     |   | -                                                                                     |   | (42,561)                                                                                                      |   | -                                                                                                                                                                                                                            |   | -                                                                                                       |   | -                                                            |
| Dividends on                         |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|    preferred stock    |   | -                                                                                                 |   | -                                                                                                                   |   | -                                                                                     |   | -                                                                                     |   | (273,629)                                                                                                     |   | -                                                                                                                                                                                                                            |   | -                                                                                                       |   | (273,629)                                                    |
| Cash dividend                        |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|    declared, $.15 per |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|    common share       |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   | (453,598)                                                                                                     |   |                                                                                                                                                                                                                         |   |                                                                                                    |   | (453,598)                                                    |
| Grant of restricted                  |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|   Stock                    |   | 12,353                                                                                            |   | -                                                                                                                   |   | -                                                                                     |   |  (12,353)                                                                        |   | -                                                                                                             |   | -                                                                                                                                                                                                                            |   | -                                                                                                       |   | -                                                            |
| Compensation cost                    |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|   on restricted stock      |   |                 - |   |                    - |   |               - |   |         12,610                                |   |                   - |   |                 -                                                                                                                            |   |                  - |   |          12,610 |
| Balance,                             |   |                                                                                              |   |                                                                                                                |   |                                                                                  |   |                                                                                  |   |                                                                                                          |   |                                                                                                                                                                                                                         |   |                                                                                                    |   |                                                         |
|   December 31, 2010        |   | $3,058,716                                                                                        |   | $16,938,571                                                                                                         |   | $ 283,738                                                                             |   | $23,135,023                                                                           |   | $14,722,496                                                                                                   |   | $(576,814)                                                                                                                                                                                                                   |   | $ (463,645)                                                                                             |   | $ 57,098,085                                                 |

----

|                                                                                   |                             2010 |   |                        2009 |
|----------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|
| CASH FLOWS FROM OPERATING ACTIVITIES                                                   |                                                                                                                                                                    |   |                                                                                                                                      |
| Net income                                                                             | $       2,548,744                                                                                                                    |   | $       1,743,397                                                                                      |
| Adjustments to reconcile net income to net cash provided by operating activities: |                                                                                                                                                                    |   |                                                                                                                                      |
| Depreciation and amortization                                                          | 869,736                                                                                                                                                                 |   | 970,262                                                                                                                                   |
| FHLB Stock dividends                                                                   | (4,100)                                                                                                                                                                 |   | (11,300)                                                                                                                                  |
| Provision for loan losses                                                              | 982,663                                                                                                                                                                 |   | 1,206,343                                                                                                                                 |
|          Impairment loss on securities    | 471,811                                                                                                                                                                 |   | 111,428                                                                                                                                   |
|          Gain on sale/call of securities  | (50,715)                                                                                                                                                                |   | -                                                                                                                                         |
| Deferred income taxes                                                                  | (84,605)                                                                                                                                                                |   | (265,607)                                                                                                                                 |
|          Restricted stock expense         | 12,610                                                                                                                                                                  |   | -                                                                                                                                         |
| Increase in cash value of life insurance                                               | (226,493)                                                                                                                                                               |   | (197,177)                                                                                                                                 |
| Securities, amortization and accretion, net                                            | 271,206                                                                                                                                                                 |   | 336,253                                                                                                                                   |
| Loss on sale/writedown of other real estate                                            | 351,392                                                                                                                                                                 |   | 268,062                                                                                                                                   |
| Changes in:                                                                            |                                                                                                                                                                    |   |                                                                                                                                      |
| Loans held for sale                                                                    | 767,370                                                                                                                                                                 |   | (598,021)                                                                                                                                 |
| Interest receivable                                                                    | 295,356                                                                                                                                                                 |   | 286,378                                                                                                                                   |
| Other assets                                                                           | 2,640,435                                                                                                                                                               |   | (2,342,018)                                                                                                                               |
| Interest payable                                                                       | (261,436)                                                                                                                                                               |   | (177,518)                                                                                                                                 |
| Other liabilities                                                                      |          1,464,758                                                                                                         |   |          4,139,940                                                                           |
| Net cash provided by operating activities                                              |        10,048,732                                                                                                                    |   |          5,470,422                                                                           |
|                                                                                   |                                                                                                                                                                    |   |                                                                                                                                      |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                   |                                                                                                                                                                    |   |                                                                                                                                      |
| Purchases of available-for-sale securities                                             | (51,246,717)                                                                                                                                                            |   | (64,793,467)                                                                                                                              |
| Purchases of other securities                                                          | (595,500)                                                                                                                                                               |   | (110,600)                                                                                                                                 |
| Proceeds from maturities and calls of available-for-sale securities                    | 56,508,885                                                                                                                                                              |   | 52,288,321                                                                                                                                |
| Proceeds from sales of securities available-for-sale                                   | 1,009,000                                                                                                                                                               |   | -                                                                                                                                         |
| Proceeds from redemption of other securities                                           | 384,300                                                                                                                                                                 |   | 350,150                                                                                                                                   |
| (Increase) decrease in loans                                                           | (18,956,156)                                                                                                                                                            |   | 818,581                                                                                                                                   |
| Net (additions) disposals to premises and equipment                                    |       (1,370,243)                                                                                                                         |   |             245,086                                                           |
| Net cash used in investing activities                                                  |     (14,266,431)                                                                                                                                    |   |     (11,201,929)                                                                                                      |
|                                                                                   |                                                                                                                                                                    |   |                                                                                                                                      |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                   |                                                                                                                                                                    |   |                                                                                                                                      |
| Increase in deposits                                                                   | 12,725,515                                                                                                                                                              |   | 5,675,287                                                                                                                                 |
| Proceeds from borrowed funds                                                           | 8,500,000                                                                                                                                                               |   | 3,000,000                                                                                                                                 |
| Repayment of borrowed funds                                                            | (10,430,187)                                                                                                                                                            |   | (16,990,192)                                                                                                                              |
| Exercise of stock options                                                              | -                                                                                                                                                                       |   | 222,510                                                                                                                                   |
| Dividends paid on common stock                                                         | (452,980)                                                                                                                                                               |   | -                                                                                                                                         |
| Dividends paid on preferred stock                                                      | (261,814)                                                                                                                                                               |   | (193,750)                                                                                                                                 |
|      Proceeds from issuance of preferred stock and warrant    |        12,123,000                                                                                                                    |   |          5,000,000                                                                           |
| Net cash  provided by (used in) financing activities                         |        22,203,534                                                                                                                    |   |       (3,286,145)                                                                                           |

----

| Continued:                                                        |                           2010 |   |  2009                                           |
|-------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------------|
|                                                              |                                                                                                                                                        |   |                                                 |
| Net increase (decrease) in cash and cash equivalents              | 17,985,835                                                                                                                                                  |   | (9,017,652)                                          |
| Cash and cash equivalents at beginning of year                    |        15,990,873                                                                                                        |   |        25,008,525 |
| Cash and cash equivalents at end of year                          | $     33,976,708                                                                                                                   |   | $     15,990,873            |
|                                                              |                                                                                                                                                        |   |                                                 |
| Supplemental disclosures:                                         |                                                                                                                                                        |   |                                                 |
|                                                              |                                                                                                                                                        |   |                                                 |
| Cash paid during the year for:                                    |                                                                                                                                                        |   |                                                 |
| Interest                                                          | $       7,380,728                                                                                                        |   | $     10,417,232            |
| Income taxes                                                      | 1,366,854                                                                                                                                                   |   | 876,436                                              |
|                                                              |                                                                                                                                                        |   |                                                 |
| Non-cash activities:                                              |                                                                                                                                                        |   |                                                 |
| Transfers of loans to other real estate                           | 3,296,143                                                                                                                                                   |   | 2,821,539                                            |
|      Issuance of restricted stock grants | 12,353                                                                                                                                                      |   | -                                                    |

----

----

|   | 5. | Loans held for sale |
|--------|----|---------------------|

|   | The Company originates fixed rate single family, residential first mortgage loans on a presold basis.  The Company issues a rate lock commitment to a customer and concurrently “locks in” with a secondary market investor under a best efforts delivery mechanism.  Such loans are sold without the servicing retained by the Company.  The terms of the loan are dictated by the secondary investors and are transferred within several weeks of the Company initially funding the loan.  The Company recognizes certain origination fees and service release fees upon the sale, which are included in other income on loans in the consolidated statements of income.  Between the initial funding of the loans by the Company and the subsequent purchase by the investor, the Company carries the loans held for sale at the lower of cost or fair value in the aggregate as determined by the outstanding commitments from investors. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6. | Loans |
|--------|----|-------|

----

----

|                                                                                   |                                                                                                                                                                                                          |   |                                                                                                                                                                                                                 |
|----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|           (Dollars in thousands)     |  Goodwill                                                                                                                                                                                                |   | Core depositintangible                                                                                                                                                                                               |
|                                                                                   |                                                                                                                                                                                                          |   |                                                                                                                                                                                                                 |
|           Balance, January 1, 2010   | $            702                                                            |   | $              468                                        |
|           Amortization               |                    -                |   |                   69                  |
|           Balance, December 31, 2010 | $            702                                                       |   | $              399                                        |

| (Dollars in thousands) Year |   | Full yearexpectedamortization |
|----------------------------------|--------|-------------------------------|
| 2011                             |   | $69                           |
| 2012                             |   |   69                     |
| 2013                             |   |   69                     |
| 2014                             |   |   69                     |
| 2015                             |   |   69                     |

----

----

|                                                 | For the Year EndedDecember 31, 2010 |   |  For the Year EndedDecember 31, 2009             |
|------------------------------------------------------|-------------------------------------|--------|-------------------------------------------------------|
|                                                 | NetIncome(Numerator)                |   |  Shares(Denominator)                             |   |  Per ShareAmount |   | NetIncome(Numerator)  |   |  Shares(Denominator) |   |  Per ShareAmount |
|                                                 |                                |   |                                                  |   |   |   |   |   |   |   |   |
| Basic per common share                               | $  2,232,554              |   | 3,019,869                                             |   | $          .74 |   | $  1,460,955 |   | 3,011,430 |   | $         .49 |
|                                                 |                                |   |                                                  |   |   |   |   |   |   |   |   |
| Effect of dilutive shares:                           |                                |   |                                                  |   |   |   |   |   |   |   |   |
|       Restricted Stock |                                |   |         2,058 |   |   |   |   |   |               - |   |   |
|                                                 | $  2,232,554              |   |  3,021,927                                       |   | $          .74 |   | $  1,460,955 |   |      3,011,430 |   | $          .49 |

----

----

|                                                          | December 31, 2010                                                              |
|---------------------------------------------------------------|--------------------------------------------------------------------------------|
|                                                          | Amortized Cost                                                                 |   |  Gross Unrealized Gains |   | Gross Unrealized Losses |   | Estimated Fair Value |
| Available-for-sale securities:                                |                                                                           |   |   |   |   |   |   |
|    Obligations of U.S. Government              |                                                                           |   |   |   |   |   |   |
|       agencies                  | $   22,886,882                                                  |   | $      169,384 |   | $     201,664 |   | $   22,854,602 |
|    Tax-exempt and taxable                      |                                                                           |   |   |   |   |   |   |
|       obligations of states and |                                                                           |   |   |   |   |   |   |
|       municipal subdivisions    | 53,895,368                                                                     |   | 998,689 |   | 221,155 |   | 54,672,902 |
|     Mortgage-backed securities            | 17,638,563                                                                     |   | 727,725 |   | 47,866 |   | 18,318,422 |
|     Corporate obligations                 | 9,726,518                                                                      |   | 12,163 |   | 2,036,387 |   | 7,702,294 |
|     Other                                 |        1,255,483                            |   |                    - |   |        269,461 |   |           986,022 |
|                                                          | $ 105,402,814                                                                  |   | $   1,907,961 |   | $  2,776,533 |   | $ 104,534,242 |
| Held-to-maturity securities:                                  |                                                                           |   |   |   |   |   |   |
|     Mortgage-backed securities            | $            2,640 |   | $             123 |   | $                 - |   | $            2,763 |
|                                                          |                                                                           |   |   |   |   |   |   |
|                                                          | December 31, 2009                                                              |

|                                                          | Amortized Cost                                                                  |   | Gross Unrealized Gains                                                                                        |   | Gross Unrealized Losses                                                                             |   | Estimated Fair Value                                                            |
|---------------------------------------------------------------|---------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|
| Available-for-sale securities:                                |                                                                            |   |                                                                                                          |   |                                                                                                |   |                                                                            |
|    Obligations of U.S. Government              |                                                                            |   |                                                                                                          |   |                                                                                                |   |                                                                            |
|       agencies                  | $   31,061,333                                                   |   | $      387,491                                                                  |   | $        56,602                                             |   | $   31,392,222                                                        |
|    Tax-exempt and taxable                      |                                                                            |   |                                                                                                          |   |                                                                                                |   |                                                                            |
|       obligations of states and |                                                                            |   |                                                                                                          |   |                                                                                                |   |                                                                            |
|       municipal subdivisions    | 41,088,714                                                                      |   | 965,403                                                                                                       |   | 72,217                                                                                              |   | 41,981,900                                                                      |
|     Mortgage-backed securities            | 27,226,696                                                                      |   | 985,163                                                                                                       |   | 84,851                                                                                              |   | 28,127,008                                                                      |
|     Corporate obligations                 | 11,742,149                                                                      |   | 51,683                                                                                                        |   | 2,021,721                                                                                           |   | 9,772,111                                                                       |
|     Other                                 |        1,247,049                             |   |                   - |   |        289,266                                                   |   |          957,783                   |
|                                                          | $  112,365,941                                                             |   | $   2,389,740                                                                                       |   | $   2,524,657                                                                        |   | $  112,231,024                                                             |
| Held-to-maturity securities:                                  |                                                                            |   |                                                                                                          |   |                                                                                                |   |                                                                            |
|     Mortgage-backed securities            | $             2,983 |   | $               64                      |   | $                 - |   | $             3,047 |

|                                   | Available-for-Sale                                |   | Held-to-Maturity                                                          |
|----------------------------------------|---------------------------------------------------|--------|---------------------------------------------------------------------------|
|                                   |  AmortizedCost      |   | EstimatedFair      Value     |   |  AmortizedCost      |   | EstimatedFair      Value     |
|                                   |                                              |   |                                                                      |   |   |   |   |
| Due less than one year                 | 10,476,227                                        |   | 10,530,199                                                                |   | - |   | - |
| Due after one year through five years  | 52,717,729                                        |   | 53,311,717                                                                |   | - |   | - |
| Due after five years through ten years | 13,200,070                                        |   | 13,343,290                                                                |   | - |   | - |
| Due after ten years                    | 11,370,225                                        |   | 9,030,614                                                                 |   | - |   | - |
| Mortgage-backed securities             |      17,638,563          |   |     18,318,422                                        |   |            2,640 |   |           2,763 |
|                                   | $ 105,402,814                                     |   | $104,534,242                                                              |   | $         2,640 |   | $        2,763 |

----

|                                              | Losses < 12 Months                                                                                         |   | Losses 12 Months or >                                                                                      |   | Total                                                                                              |
|---------------------------------------------------|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|
|                                              |  FairValue                                                                                               |   | GrossUnrealizedLosses                                                                                         |   |  FairValue                                                                                    |   | GrossUnrealizedLosses |   |  FairValue |   | GrossUnrealizedLosses |
| Obligations of U.S.                               |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|   government agencies                   | $13,340,460                                                                                                   |   | $     201,664                                                                        |   | $                - |   | $                - |   | $13,340,460 |   | $     201,664 |
| Tax-exempt and tax-                               |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|      able obligations of |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|   states and municipal                  |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|      subdivisions        | 9,144,237                                                                                                     |   | 204,952                                                                                                       |   | 257,160                                                                                            |   | 16,203 |   | 9,401,397 |   | 221,155 |
| Mortgage-backed                                   |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|   securities                            | 1,708,389                                                                                                     |   | 3,331                                                                                                         |   | 310,610                                                                                            |   | 44,535 |   | 2,018,999 |   | 47,866 |
| Corporate obligations                             | -                                                                                                             |   | -                                                                                                             |   | 3,199,650                                                                                          |   | 2,036,387 |   | 3,199,650 |   | 2,036,387 |
| Other                                             |                   - |   |                   - |   |        986,022                                                  |   |        269,461 |   |        986,022 |   |        269,461 |
|                                              | $24,193,086                                                                                                   |   | $     409,947                                                                        |   | $  4,753,442                                                                             |   | $  2,366,586 |   | $28,946,528 |   | $  2,776,533 |

|                                              | Losses < 12 Months                                                                                         |   | Losses 12 Months or >                                                                                      |   | Total                                                                                              |
|---------------------------------------------------|---------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------|
|                                              |  FairValue                                                                                               |   | GrossUnrealizedLosses                                                                                         |   |  FairValue                                                                                    |   | GrossUnrealizedLosses |   |  FairValue |   | GrossUnrealizedLosses |
| Obligations of U.S.                               |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|   government agencies                   | $  7,113,888                                                                                        |   | $       56,602                                                             |   | $                - |   | $                - |   | $  7,113,888 |   | $       56,602 |
| Tax-exempt and tax-                               |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|      able obligations of |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|   states and municipal                  |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|      subdivisions        | 5,055,888                                                                                                     |   | 71,665                                                                                                        |   | 90,567                                                                                             |   | 552 |   | 5,146,455 |   | 72,217 |
| Mortgage-backed                                   |                                                                                                          |   |                                                                                                          |   |                                                                                               |   |   |   |   |   |   |
|   securities                            | 776,355                                                                                                       |   | 3,091                                                                                                         |   | 321,532                                                                                            |   | 81,760 |   | 1,097,887 |   | 84,851 |
| Corporate obligations                             | 487,730                                                                                                       |   | 398,736                                                                                                       |   | 3,811,605                                                                                          |   | 1,622,985 |   | 4,299,335 |   | 2,021,721 |
| Other                                             |                   - |   |                   - |   |        957,783                                                  |   |        289,266 |   |        957,783 |   |        289,266 |
|                                              | $13,433,861                                                                                                   |   | $     530,094                                                                        |   | $  5,181,487                                          |   | $  1,994,563 |   | $18,615,348 |   | $  2,524,657 |

----

|                                   | 2010                                                                                                                              |   | 2009                                                                                    |
|----------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------|
|                                   |                     (In thousands) |
|                                   |                                                                                                                              |   |                                                                                    |
| Commercial, financial and agricultural | $        48,427                                                                           |   | $       43,229                                       |
| Real estate – construction       | 58,962                                                                                                                            |   | 68,695                                                                                  |
| Real estate – mortgage           | 211,499                                                                                                                           |   | 190,229                                                                                 |
| Installment loans to individuals       | 10,589                                                                                                                            |   | 12,812                                                                                  |
| Overdrafts                             |                158                                     |   |               137 |
|                                   | 329,635                                                                                                                           |   | 315,102                                                                                 |
| Allowance for loan losses              |          (4,617)                                                                     |   |         (4,762)                                 |
|                                   | $      325,018                                                                                      |   | $     310,340                                                  |

|                                                                    | 2010                                                    |   | 2009                                              |
|-------------------------------------------------------------------------|---------------------------------------------------------|--------|---------------------------------------------------|
|                                                                    |                                                    |   |                                              |
| Balance at beginning of year                                            | $   4,762,069                            |   | $  4,784,919                            |
| Additions:                                                              |                                                    |   |                                              |
|     Provision for loan losses charged to operations | 982,663                                                 |   | 1,206,343                                         |
|     Recoveries                                      |         242,002 |   |        166,904 |
|                                                                    | 5,986,734                                               |   | 6,158,166                                         |
| Deductions:    Loans charged off                    |       1,369,654           |   |      1,396,097           |
| Balance at end of year                                                  | $   4,617,080                            |   | $  4,762,069                            |

|                                                                 | 2010                                                              |   | 2009                                                              |
|----------------------------------------------------------------------|-------------------------------------------------------------------|--------|-------------------------------------------------------------------|
|                                                                 | (In thousands)                                                    |
| Impaired Loans:                                                      |                                                              |   |                                                              |
|     Impaired loans without a valuation allowance | $        2,406            |   | $      12,295                       |
|     Impaired loans with a valuation allowance    |           2,123 |   |           8,314 |
| Total impaired loans                                                 | $        4,529            |   | $      20,609                       |
|                                                                 |                                                              |   |                                                              |
| Allowance for loan losses on impaired loans at year end              | 738                                                               |   | 2,004                                                             |
|                                                                 |                                                              |   |                                                              |
| Total nonaccrual loans                                               | 4,212                                                             |   | 4,367                                                             |
|                                                                 |                                                              |   |                                                              |
| Past due 90 days or more and still accruing                          | 1,071                                                             |   | 1,447                                                             |
|                                                                 |                                                              |   |                                                              |
| Average investment in impaired loans                                 | 14,486                                                            |   | 19,114                                                            |
|                                                                 |                                                              |   |                                                              |
| Interest paid on impaired loans                                      | 208                                                               |   | 1,297                                                             |

----

|   |                               |                                                                               |   |                                                                        |   |                                                                              |
|--------|------------------------------------|------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------|
|   |                               |                                                                               |   |                                                                        |   | Commercial,                                                             |   |   |
|   |                               |                                                                               |   | Installment                                                                 |   | Financial                                                |   |   |
|   |                               | Real Estate                                                                        |   | andOther                                                                    |   | 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 |
|   |                               |                                                                               |   |                                                                        |   |                                                                              |   |   |

----

|                              |                                                                             |   |                                                     |   |                                                                                  |   |                                                                  |   |                                                                                        |   |
|-----------------------------------|----------------------------------------------------------------------------------|--------|----------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|--------|
|                              |                                                                             |   |                                                     |   |                                                                                  |   | Average                                                               |   | Interest                                                                                    |   |
|                              |                                                                             |   |                                                     |   |                                                                                  |   | Recorded                                                              |   | Income                                                                                      |   |
|                              | Recorded                                                                         |   | Unpaid                                                   |   | Related                                                                               |   | Investment                                                            |   | Recognized                                                                                  |   |
|                              | Investment                                                                       |   | Balance                                                  |   | Allowance                                                                             |   | YTD                                                                   |   | 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                                        |   |
|                              |                                                                             |   |                                                     |   |                                                                                  |   |                                                                  |   |                                                                                        |   |

----

|                                                              | December 31, 2010                                                                                                 |
|-------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------|
|                                                              | (In thousands)                                                                                                    |
|                                                              | Past Due 30 to 89 Days                                                                                            |   | Past Due90 Days or More and Still Accruing |   | Non-Accrual |   | Total Past 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 nonresidential                               | 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           |

----

|                                       |                                                                                                                            |   |                                  |   |                                                                                        |          | Commercial,                                     |          |                                                               |
|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|---------------------------------------------------------------------------------------------|---------------|------------------------------------------------------|---------------|--------------------------------------------------------------------|
|                                       |                                                                                                                            |   |                                  |   | Installment                                                                                 |          | Financial                             |          |                                                               |
|                                       | Real EstateCommercial                                                                                                           |   | Real EstateMortgage                   |   | and         Other          |     | 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                                               |

|                                               | 2010                                          |   | 2009                                                          |
|----------------------------------------------------|-----------------------------------------------|--------|---------------------------------------------------------------|
|                                               |                                          |   |                                                          |
| Premises:                                          |                                          |   |                                                          |
|     Land                       | $    4,970,959            |   | $    4,970,959                            |
|     Buildings and improvements | 9,881,906                                     |   | 9,848,581                                                     |
| Equipment                                          | 4,504,541                                     |   | 4,418,294                                                     |
| Construction in progress                           |       1,329,262 |   |          141,923 |
|                                               | 20,686,668                                    |   | 19,379,757                                                    |
| Less accumulated depreciation and amortization     |       5,692,742 |   | 5,100,466                                                     |
|                                               | $  14,993,926                       |   | $  14,279,291                                       |

----

| Year   | Amount                                                              |
|--------|---------------------------------------------------------------------|
|   |                                                                |
| 2011   | $  107,323                                                |
| 2012   | 35,107                                                              |
| 2013   | 8,732                                                               |
| 2014   | 3,409                                                               |
| 2015   |            11,150 |
|   |  $   165,721                                         |

|                                                                   | December 31, |
|------------------------------------------------------------------------|--------------|
|                                                                   | 2010         |   |  2009 |
|                                                                   |         |   |   |
|        Reverse Repurchase Agreement | $15,000,000  |   | $15,000,000 |
|        FHLB advances                | 15,106,895   |   | 17,037,082 |
|                                                                   | $30,106,895  |   | $32,037,082 |

| Year   | Amount                       |
|--------|------------------------------|
|   |                         |
| 2011   | $   3,075,064 |
| 2012   | 3,261,058                    |
| 2013   | 1,770,773                    |
| 2014   | 7,000,000                    |
|   | $ 15,106,895                 |

----

|                                      | Company                         |   | Subsidiary |
|-------------------------------------------|---------------------------------|--------|------------|
|                                      | (Consolidated)                  |   | The First  |
|                                      | Amount                          |   | Ratio      |   | Amount |   | Ratio |
| December 31, 2010                         |                            |   |       |   |   |   |   |
|     Total risk-based  | $    70,818 |   | 19.6%      |   | $   58,368 |   | 16.2% |
|     Tier I risk-based | 66,307                          |   | 18.4%      |   | 53,867 |   | 15.0% |
|     Tier I leverage   | 66,307                          |   | 13.1%      |   | 53,867 |   | 10.7% |
|                                      |                            |   |       |   |   |   |   |
| December 31, 2009                         |                            |   |       |   |   |   |   |
|     Total risk-based  | $    56,545 |   | 16.5%      |   | $   55,686 |   | 16.3% |
|     Tier I risk-based | 52,259                          |   | 15.3%      |   | 51,410 |   | 15.1% |
|     Tier I leverage   | 52,259                          |   | 10.8%      |   | 51,410 |   | 10.7% |

|                                      | Company                         |   | Subsidiary |
|-------------------------------------------|---------------------------------|--------|------------|
|                                      | (Consolidated)                  |   | The First  |
|                                      | Amount                          |   | Ratio      |   | Amount |   | Ratio |
| December 31, 2010                         |                            |   |       |   |   |   |   |
|     Total risk-based  | $    28,860 |   | 8.0%       |   | $   28,798 |   | 8.0% |
|     Tier I risk-based | 14,430                          |   | 4.0%       |   | 14,399 |   | 4.0% |
|     Tier I leverage   | 20,249                          |   | 4.0%       |   | 20,212 |   | 4.0% |
|                                      |                            |   |       |   |   |   |   |
| December 31, 2009                         |                            |   |       |   |   |   |   |
|     Total risk-based  | $   27,397       |   | 8.0%       |   | $   27,326 |   | 8.0% |
|     Tier I risk-based | 13,698                          |   | 4.0%       |   | 13,663 |   | 4.0% |
|     Tier I leverage   | 19,307                          |   | 4.0%       |   | 19,252 |   | 4.0% |

----

|                                                            | Years Ended December 31,                                |
|-----------------------------------------------------------------|---------------------------------------------------------|
|                                                            | 2010                                                    |   | 2009 |
| Unrealized holdings gains (losses) on available-for-            |                                                    |   |   |
|     sale securities and loans held for sale | $(1,141,866)                                            |   | $   355,795 |
| Reclassification adjustment for net losses                      |                                                    |   |   |
|     realized in income                      |         421,096 |   |       111,428 |
| Net unrealized gains (losses)                                   | (720,770)                                               |   | 467,223 |
| Tax effect                                                      |         245,062 |   |             158,856 |
| Net unrealized gains (losses), net of tax                       | $   (475,708)                            |   | $   308,367 |

|                            | Years Ended December 31, |
|---------------------------------|--------------------------|
|                            | 2010                     |   | 2009 |
| Current:                        |                     |   |   |
|     Federal | $832,607                 |   | $731,452 |
|     State   | 107,196                  |   | 48,266 |
| Deferred (benefit)              |  (84,605)           |   |  (265,607) |
|                            | $855,198                 |   | $514,111 |

|                                           | Years Ended December 31,                                      |
|------------------------------------------------|---------------------------------------------------------------|
|                                           | 2010                                                          |   | 2009 |
|                                           |        Amount                   |   |             % |   |        Amount |   |            % |
|                                           |                                                          |   |   |   |   |   |   |
| Income taxes at statutory rate                 | $  1,157,340                                        |   | 34% |   | $     767,553 |   | 34% |
| Tax-exempt income                              | (492,985)                                                     |   | (15)% |   | (399,973) |   | (18)% |
| Nondeductible expenses                         | 127,413                                                       |   | 4% |   | 140,342 |   | 6% |
| State income tax, net of federal               |                                                          |   |   |   |   |   |   |
|       tax effect | 69,140                                                        |   | 2% |   | 31,856 |   | 2% |
| Tax credits                                    | -                                                             |   | - |   | (25,887) |   | (1)% |
| Other, net                                     |          (5,710) |   |          - |   |               220 |   |              - |
|                                           | $     855,198                        |   |    25% |   | $     514,111 |   |         23% |

----

|                                                                     |       December 31,             |
|--------------------------------------------------------------------------|---------------------------------------------------------|
|                                                                     | 2010                                                    |   | 2009 |
| Deferred tax assets:                                                     |                                                    |   |   |
|     Allowance for loan losses                        | $   1,331,481                            |   | $  1,384,855 |
|     Unrealized loss on available-for-sale securities | 295,315                                                 |   | 45,870 |
|     Net operating loss carryover                     | 807,535                                                 |   | 885,272 |
|     Other                                            |         448,375 |   |        360,925 |
|                                                                     |      2,882,706                 |   |     2,676,922 |
| Deferred tax liabilities:                                                |                                                    |   |   |
|     Securities                                       | (113,808)                                               |   | (155,772) |
|     Premises and equipment                           | (700,625)                                               |   | (761,078) |
|     Core deposit intangible                          |      (148,631)                 |   |     (174,480) |
|                                                                     |      (963,064)                 |   |  (1,091,330) |
| Net deferred tax asset, included in other assets                         | $   1,919,642                            |   | $  1,585,592 |

----

|                                     |    Shares                                                                    | WeightedAverage  Exercise   Price    |
|------------------------------------------|---------------------------------------------------------------------------------------------|--------------------------------------------------------------------|
|                                     |                                                                                        |                                                               |
| Options outstanding at beginning of year | 117,826                                                                                     | $8                                        |
| Options exercised                        | (29,668)                                                                                    | 8                                         |
| Options forfeited                        |      (88,158)                                                      | 12                                        |
| Options outstanding at end of year       |                - | 0                                         |
| Options exercisable at end of year       |                - | 0                                         |

----

| Loans outstanding at beginning of year | $     14,814       |
|----------------------------------------|---------------------------------------------|
| New loans                              | 2,489                                       |
| Repayments                             |       (2,723) |
| Loans outstanding at end of year       | $     14,580       |

----

----

|   | 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 Markets forIdentical Assets(Level 1) |   | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |   |
|                          |   |   |                        |   |                                                        |   |   |   |   |   |   |   |   |
| Available-for-sale securities |   |   | $    104,534 |   | $ 986                                                       |   |   |        $100,929 |   | $2,619 |   |

----

|                          |   |                                                                  |   |                                                               | Fair Value Measurements Using |                                        |
|-------------------------------|--------|-----------------------------------------------------------------------|--------|--------------------------------------------------------------------|-------------------------------|---------------------------------------------|
|                          |   | Fair Value                                                            |   | Quoted Prices inActive Markets forIdentical Assets(Level 1)        |                          | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |   |
|                          |   |                                                                  |   |                                                               |                          |                                        |   |   |   |   |   |   |
| Available-for-sale securities |   | $   112,231         |   |            $ 958 |                          |                                        |        $108,040          |   | $3,233 |   |

| (Dollars in thousands) | Bank-IssuedTrustPreferredSecurities |
|------------------------|-------------------------------------|

| Balance, December 31, 2009                                                        | $         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          |            (142)           |
| Balance, December 31, 2010                                                        | $         2,619                      |

----

| December 31, 2010       |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
|-------------------------|--------|---------------------------------------------------------------|--------|---------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|
|                    |   |                                                          |   | Fair Value Measurements Using                                                         |
|                    |   |                                                          |   | Quoted Prices inActive MarketsForIdentical Assets                                     |   | SignificantOtherObservableInputs                |   |  SignificantUnobservableInputs                                                                     |
|                    |   | Fair Value                                                    |   | (Level 1)                                                                             |   | (Level 2)                                       |   | (Level 3)                                                                                               |
|                    |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
| Impaired loans          |   | $     4,529                          |   | $           -                  |   | $     4,529            |   | $               -            |
| Other real estate owned |   |        3,995               |   |              -       |   |        3,995 |   |                  - |
|                    |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
|                    |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
| December 31, 2009       |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
|                    |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
|                    |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
| Impaired loans          |   |       $   20,609 |   | $            -            |   | $   20,609                       |   | $               -            |
| Other real estate owned |   |       2,903                          |   |               - |   |        2,903      |   |                  - |
|                    |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |
|                    |   |                                                          |   |                                                                                  |   |                                            |   |                                                                                                    |

----

|   |  Loans – The fair value of loans is estimated by discounting the future cash flows using the current rates at which similar loans would be made to borrowers with similar credit ratings and for the same  remaining maturities. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                   |          As of          December 31, 2010 |   |          As of           December 31, 2009 |
|--------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------|
|                                                   |                                                                                                                           |   |                                                                                                                                 |   |   |   |   |
|                                                   | CarryingAmount                                                                                                                 |   | EstimatedFair Value                                                                                                                  |   | CarryingAmount |   | EstimatedFair Value |
|                                                   |                (In thousands)                            |
| Financial Instruments:                                 |                                                                                                                           |   |                                                                                                                                 |   |   |   |   |
| Assets:                                                |                                                                                                                           |   |                                                                                                                                 |   |   |   |   |
| Cash and cash equivalentsSecurities available-for-sale | $    33,977104,534                                                                                         |   | $   33,977104,534                                                                                                     |   | $    15,991112,231 |   | $   15,991112,231 |
| Securities held-to-maturity                            | 3                                                                                                                              |   | 3                                                                                                                                    |   | 3 |   | 3 |
| Other securities                                       | 2,599                                                                                                                          |   | 2,599                                                                                                                                |   | 2,384 |   | 2,384 |
| Loans, net                                             | 327,956                                                                                                                        |   | 339,927                                                                                                                              |   | 314,033 |   | 326,271 |
|                                                   |                                                                                                                           |   |                                                                                                                                 |   |   |   |   |
|   Liabilities:                               |                                                                                                                           |   |                                                                                                                                 |   |   |   |   |
| Noninterest-bearing                                    |                                                                                                                           |   |                                                                                                                                 |   |   |   |   |
| deposits                                               | $    48,312                                                                                                |   | $   48,312                                                                                                            |   | $    48,527 |   | $   48,527 |
| Interest-bearing deposits                              | 348,167                                                                                                                        |   | 349,565                                                                                                                              |   | 335,227 |   | 337,238 |
| Subordinated debentures                                | 10,310                                                                                                                         |   | 10,310                                                                                                                               |   | 10,310 |   | 10,310 |
| FHLB and other borrowings                              | 30,107                                                                                                                         |   | 30,107                                                                                                                               |   | 32,037 |   | 32,037 |

----

----

|                                                    |                December 31,                             |
|---------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
|                                                    |                      2010 |   |                      2009 |
| Assets:                                                 |                                                                                                                          |   |   |
|     Cash and cash equivalents       | $  11,819,433                                                                                                       |   | $       285,232 |
|     Investment in subsidiary bank   | 54,659,166                                                                                                                    |   | 52,768,436 |
|     Investments in statutory trusts | 310,000                                                                                                                       |   | 310,000 |
|     Other securities                | 100,000                                                                                                                       |   | 100,000 |
|     Premises and equipment          | 368,623                                                                                                                       |   | 368,623 |
|     Other                           |          204,364                                                                 |   |          207,448 |
|                                                    | $  67,461,586                                                                                                       |   | $  54,039,739 |
| Liabilities and Stockholders’ Equity:             |                                                                                                                          |   |   |
|     Subordinated debentures         | 10,310,000                                                                                                                    |   | 10,310,000 |
|     Other                           | 53,501                                                                                                                        |   | 113,073 |
|     Stockholders’ equity      |     57,098,085                                                                                            |   |     43,616,666 |
|                                                    | $  67,461,586                                                                                                       |   | $  54,039,739 |

----

|                                                              |                 Years Ended December 31,           |
|-------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
|                                                              |                      2010 |   |  2009 |
| Income:                                                           |                                                                                                                          |   |   |
|     Interest and dividends                    | $             799                                            |   | $        25,354 |
|     Dividend income                           | 650,000                                                                                                                       |   | - |
|     Other                                     |             1,500                                                 |   |              1,500 |
|                                                              | 652,299                                                                                                                       |   | 26,854 |
| Expenses:                                                         |                                                                                                                          |   |   |
|     Interest on borrowed funds                | 187,160                                                                                                                       |   | 291,110 |
|     Other                                     |         438,031                                                                       |   | 360,820 |
|                                                              | 625,191                                                                                                                       |   | 651,930 |
| Income (loss) before income taxes and equity in undistributed     |                                                                                                                          |   |   |
|     income of subsidiary                      | 27,108                                                                                                                        |   | (625,076) |
| Income tax benefit                                                |        155,197                                                                             |   |         158,282 |
| Income (loss) before equity in undistributed income of subsidiary | 182,305                                                                                                                       |   | (466,794) |
| Equity in undistributed income of subsidiary                      |     2,366,439                                                                                             |   |      2,210,191 |
|                                                              |                                                                                                                          |   |   |
| Net income                                                        | $  2,548,744                                                                                                        |   | $   1,743,397 |

|                                                                                                                                    |                   Years Ended December 31, |
|-----------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                    |  2010                                                                                                                      |   |  2009 |
| Cash flows from operating activities:                                                                                                   |                                                                                                                            |   |   |
|     Net income                                                                                                      | $   2,548,744                                                                                                    |   | $   1,743,397 |
|     Adjustments to reconcile net income to net cash provided by                                                     |                                                                                                                            |   |   |
|         (used in) operating activities:                                                         |                                                                                                                            |   |   |
|            Equity in undistributed income of subsidiary                          | (2,366,439)                                                                                                                     |   | (2,210,191) |
|            Restricted stock expense                                              | 12,610                                                                                                                          |   | - |
|            Other, net                                                            |         (68,920)                                                                        |   |        161,957 |
|               Net cash provided by (used in) operating activities |         125,995                                                                         |   |       (304,837) |
|                                                                                                                                    |                                                                                                                            |   |   |
| Cash flows from investing activities:                                                                                                   |                                                                                                                            |   |   |
|     Investment in subsidiary bank                                                                                   |                     -       |   |   (5,000,000) |
|               Net cash used in investing activities               |                     -       |   |   (5,000,000) |
|                                                                                                                                    |                                                                                                                            |   |   |
| Cash flows from financing activities:                                                                                                   |                                                                                                                            |   |   |
|     Dividends paid on common stock                                                                                  | (452,980)                                                                                                                       |   | - |
|     Dividends paid on preferred stock                                                                               | (261,814)                                                                                                                       |   | (193,750) |
|     Exercise of stock options                                                                                       | -                                                                                                                               |   | 222,510 |
|     Proceeds from issuance of preferred stock and warrant                                                           |     12,123,000                                                                                              |   |        5,000,000 |
|           Net cash provided by financing activities                                   |    11,408,206                                                                                                    |   |        5,028,760 |
|                                                                                                                                    |                                                                                                                            |   |   |
| Net  increase (decrease) in cash and cash equivalents                                                                         | 11,534,201                                                                                                                      |   | (276,077) |
| Cash and cash equivalents at beginning of year                                                                                          |        285,232                                                                               |   |          561,309 |
|                                                                                                                                    |                                                                                                                            |   |   |
| Cash and cash equivalents at end of year                                                                                                | $11,819,433                                                                                                                     |   | $      285,232 |

----

|                                                            | Three Months Ended                                                               |
|-----------------------------------------------------------------|----------------------------------------------------------------------------------|
|                                                            | March 31                                                                         |   | June 30 |   | Sept. 30 |   | Dec. 31 |
|                                                            | (In thousands, except per share amounts)                                         |
|                                                            |                                                                             |   |   |   |   |   |   |
| 2010                                                            |                                                                             |   |   |   |   |   |   |
| Total interest income                                           | $      5,884                                       |   | $      5,944 |   | $      5,849 |   | $      5,776 |
| Total interest expense                                          |         2,094                            |   |         1,865 |   |         1,623 |   |         1,537 |
|     Net interest income                     | 3,790                                                                            |   | 4,079 |   | 4,226 |   | 4,239 |
| Provision for loan losses                                       |            165            |   |            217 |   |            372 |   |            229 |
|     Net interest income after provision for |                                                                             |   |   |   |   |   |   |
|         loan losses     | 3,625                                                                            |   | 3,862 |   | 3,854 |   | 4,010 |
| Total non-interest income                                       | 841                                                                              |   | 986 |   | 1,054 |   | 1,014 |
| Total non-interest expense                                      | 3,698                                                                            |   | 3,895 |   | 4,025 |   | 4,224 |
| Income tax expense                                              |            232            |   |            304 |   |            261 |   |              58 |
| Net income                                                      |            536            |   |            649 |   |            622 |   |            742 |
| Preferred dividends                                             | 62                                                                               |   | 63 |   | 61 |   | 88 |
| Preferred stock accretion                                       | 14                                                                               |   | 14 |   | 14 |   | - |
| Net income applicable to common                                 |                                                                             |   |   |   |   |   |   |
|      stockholders                      | $         460                       |   | $         572 |   | $         547 |   |  $        654 |
| Per common share:                                               |                                                                             |   |   |   |   |   |   |
|     Net income, basic                       | $          .15                 |   | $          .19 |   | $          .18 |   | $          .22 |
|     Net income, diluted                     | .15                                                                              |   | .19 |   | .18 |   | .22 |
|     Cash dividends declared                 | .075                                                                             |   | .025 |   | .05 |   | - |
|  2009                                                      |                                                                             |   |   |   |   |   |   |
| Total interest income                                           | $      6,253                                       |   | $      6,156 |   | $      6,104 |   | $      6,117 |
| Total interest expense                                          |         2,812                            |   |         2,634 |   |         2,493 |   |         2,301 |
|     Net interest income                     | 3,441                                                                            |   | 3,522 |   | 3,611 |   | 3,816 |
| Provision (credit) for loan losses                              |            628            |   |            464 |   |           (36) |   |            150 |
|     Net interest income after provision for |                                                                             |   |   |   |   |   |   |
|         loan losses     | 2,813                                                                            |   | 3,058 |   | 3,647 |   | 3,666 |
| Total non-interest income                                       | 1,097                                                                            |   | 1,056 |   | 1,131 |   | 1,113 |
| Total non-interest expense                                      | 3,658                                                                            |   | 3,890 |   | 3,707 |   | 4,069 |
| Income tax expense                                              |              61 |   |              43 |   |            301 |   |            109 |
| Net income                                                      |            191            |   |            181 |   |            770 |   |            601 |
| Preferred dividends                                             | 38                                                                               |   | 63 |   | 63 |   | 62 |
| Preferred stock accretion                                       |              14 |   |              14 |   |              14 |   |              14 |
| Net income applicable to common                                 |                                                                             |   |   |   |   |   |   |
|      stockholders                      | $         139                       |   | $         104 |   | $         693 |   | $         525 |
| Per common share:                                               |                                                                             |   |   |   |   |   |   |
|     Net income, basic                       | $          .05                 |   | $          .03 |   | $          .23 |   | $          .18 |
|     Net income, diluted                     | .05                                                                              |   | .03 |   | .23 |   | .18 |
|     Cash dividends declared                 | -                                                                                |   | - |   | - |   | - |