----

----

| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2009 |
|---|--------------------------------------------------------------------------------------------------------------------------------------------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _____ to _____ |
|---|----------------------------------------------------------------------------------------------------------------------------------------------|

| New Jersey                                                    |   | 22-3665653                           |
|---------------------------------------------------------------|--------|--------------------------------------|
| (State of Other Jurisdictionof Incorporation or Organization) |   | (I.R.S. Employer Identification No.) |

| 2650 Route 130, P.O. Box 634, Cranbury, NJ |   | 08512         |
|--------------------------------------------|--------|-------------------------------------------------------|
| (Address of Principal Executive Offices)   |   | (Zip Code)                                            |

|                                                   | (609) 655-4500    |                                                     |
|--------------------------------------------------------|----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (Issuer’s Telephone Number, Including Area Code) |
|                                                   |

|                                                                               |
|------------------------------------------------------------------------------------|
| (Former name, former address and former fiscal year, if changed since last report) |

       Noo

| Large accelerated filer                                            | o | Accelerated filer         | o |
|--------------------------------------------------------------------|---|---------------------------|---|
| Non-accelerated filer(Do not check if a smaller reporting company) | o | Smaller reporting company | x |

----

----

----

|                                                          |                                              |                                                                                        | Page   |
|---------------------------------------------------------------|---------------------------------------------------|---------------------------------------------------------------------------------------------|--------|
| PART I.          | FINANCIAL INFORMATION                             |                                                                                        |
|                                                          |                                              |                                                                                        |   |
|                                                          | Item 1.        | Financial Statements                                                                        | 1      |
|                                                          |                                              |                                                                                        |   |
|                                                          |                                              | Consolidated Balance Sheets                                                                 |   |
|                                                          |                                              | (unaudited) as of June 30, 2009                                                             |   |
|                                                          |                                              | and December 31, 2008                                                                       | 1      |
|                                                          |                                              |                                                                                        |   |
|                                                          |                                              | Consolidated Statements of Income                                                           |   |
|                                                          |                                              | (unaudited) for the Three Months and Six Months Ended                                       |   |
|                                                          |                                              | June 30, 2009 and June 30, 2008                                                             | 2      |
|                                                          |                                              |                                                                                        |   |
|                                                          |                                              | Consolidated Statements of Changes in Shareholders’ Equity                            |   |
|                                                          |                                              | (unaudited) for the Six Months Ended                                                        |   |
|                                                          |                                              | June 30, 2009 and June 30, 2008                                                             | 3      |
|                                                          |                                              |                                                                                        |   |
|                                                          |                                              | Consolidated Statements of Cash Flows                                                       |   |
|                                                          |                                              | (unaudited) for the Six Months Ended                                                        |   |
|                                                          |                                              | June 30, 2009 and June 30, 2008                                                             | 4      |
|                                                          |                                              |                                                                                        |   |
|                                                          |                                              | Notes to Consolidated Financial Statements (unaudited)                                      | 5      |
|                                                          |                                              |                                                                                        |   |
|                                                          | Item 2.                                           | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 18     |
|                                                          |                                              |                                                                                        |   |
|                                                          | Item 3.                                           | Quantitative and Qualitative Disclosures About Market Risk                                  | 39     |
|                                                          |                                              |                                                                                        |   |
|                                                          | Item 4.                                           | Controls and Procedures                                                                     | 39     |
|                                                          |                                              |                                                                                        |   |
| PART II.                                                      | OTHER INFORMATION                                 |                                                                                        |
|                                                          |                                              |                                                                                        |   |
|                                                          | Item 2.                                           | Unregistered Sales of Equity Securities and Use of Proceeds                                 | 40     |
|                                                          |                                              |                                                                                        |   |
|                                                          | Item 4.                                           | Submission of Matters to a Vote of Security Holders                                         | 40     |
|                                                          |                                              |                                                                                        |   |
|                                                          | Item 6.                                           | Exhibits                                                                                    | 41     |
|                                                          |                                              |                                                                                        |   |
| SIGNATURES                                                    | 42                                                |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | June 30, 2009 |                            |   | December 31, 2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------|---------------------------------|--------|-------------------|--------|
| ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |                            |   |              |   |
| CASH AND DUE FROM BANKS                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $             | 48,079,083                      |   |              | $      | 14,321,777 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| FEDERAL FUNDS SOLD / SHORT-TERM INVESTMENTS                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 11,375                          |   |              |   | 11,342 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Total cash and cash equivalents                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          | 48,090,458                      |   |              |   | 14,333,119 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| INVESTMENT SECURITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          |                            |   |              |   |   |   |
| Available for sale, at fair value                                                                                                                                                                                                                                                                                                                                                                                                                        |   |          | 89,129,081                      |   |              |   | 93,477,023 |   |
| Held to maturity (fair value of $34,984,388 and $36,140,379 at June 30,               2009 and December 31, 2008, respectively)                                                                                                                                                                                                                                                         |   |          | 35,400,226                      |   |              |   | 36,550,577 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Total investment securities                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 124,529,307                     |   |              |   | 130,027,600 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| LOANS HELD FOR SALE                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |          | 24,486,425                      |   |              |   | 5,702,082 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| LOANS                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |          | 404,176,483                     |   |              |   | 377,348,416 |   |
| Less- Allowance for loan losses                                                                                                                                                                                                                                                                                                                                                                                                                          |   |          | (4,208,733                      | )      |              |   | (3,684,764 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Net loans                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          | 399,967,750                     |   |              |   | 373,663,652 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| PREMISES AND EQUIPMENT, net                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 2,118,608                       |   |              |   | 2,302,489 |   |
| ACCRUED INTEREST RECEIVABLE                                                                                                                                                                                                                                                                                                                                                                                                                              |   |          | 1,875,442                       |   |              |   | 2,192,601 |   |
| BANK-OWNED LIFE INSURANCE                                                                                                                                                                                                                                                                                                                                                                                                                                |   |          | 10,122,531                      |   |              |   | 9,929,204 |   |
| OTHER REAL ESTATE OWNED                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |          | 3,234,042                       |   |              |   | 4,296,536 |   |
| OTHER ASSETS                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |          | 4,020,170                       |   |              |   | 3,839,246 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Total assets                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $             | 618,444,733                     |   |              | $      | 546,286,529 |   |
|  LIABILITIES AND SHAREHOLDERS’ EQUITY                                                                                                                                                                                                                                                                                                                                                                                                         |   |          |                            |   |              |   |   |   |
| LIABILITIES:                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |          |                            |   |              |   |   |   |
| Deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          |                            |   |              |   |   |   |
| Non-interest bearing                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | $             | 86,778,192                      |   |              | $      | 71,772,486 |   |
| Interest bearing                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          | 418,983,332                     |   |              |   | 342,912,245 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Total deposits                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |          | 505,761,524                     |   |              |   | 414,684,731 |   |
|  BORROWINGS                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          | 30,500,000                      |   |              |   | 51,500,000 |   |
| REDEEMABLE SUBORDINATED DEBENTURES                                                                                                                                                                                                                                                                                                                                                                                                                       |   |          | 18,557,000                      |   |              |   | 18,557,000 |   |
| ACCRUED INTEREST PAYABLE                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |          | 1,985,802                       |   |              |   | 1,984,102 |   |
| ACCRUED EXPENSES AND OTHER LIABILITIES                                                                                                                                                                                                                                                                                                                                                                                                                   |   |          | 4,936,656                       |   |              |   | 3,941,044 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Total liabilities                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |          | 561,740,982                     |   |              |   | 490,666,877 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| COMMITMENTS AND CONTINGENCIES                                                                                                                                                                                                                                                                                                                                                                                                                            |   |          |                            |   |              |   |   |   |
|  SHAREHOLDERS’ EQUITY:                                                                                                                                                                                                                                                                                                                                                                                                                        |   |          |                            |   |              |   |   |   |
| Preferred Stock, no par value; 5,000,000 shares authorized, of which 12,000            shares of Series B, $1,000 liquidation preference, 5% cumulative            increasing to 9% cumulative on February 15, 2014, were issued and            outstanding at June 30, 2009 and December 31, 2008 |   |          |       11,419,295 |   |              |   |      11,387,828 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Common stock, no par value; 30,000,000 shares authorized; 4,273,314 and           4,204,202 shares issued and 4,264,396 and 4,198,871 shares           outstanding at June 30, 2009 and December 31, 2008, respectively                                                                                                                         |   |          |     35,426,806        |   |              |   |   35,180,433 |   |
| Retained earnings                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |          | 10,299,588                      |   |              |   | 9,653,923 |   |
| Treasury Stock, at cost, 8,918 and 5,331 shares at June 30, 2009 and December            31, 2008,  respectively                                                                                                                                                                                                                                                                             |   |          | (62,252                         | )      |              |   | (53,331 | ) |
| Accumulated other comprehensive loss                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          | (379,686                        | )      |              |   | (549,201 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Total shareholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                                         |   |          | 56,703,751                      |   |              |   | 55,619,652 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |          |                            |   |              |   |   |   |
| Total liabilities and shareholders’ equity                                                                                                                                                                                                                                                                                                                                                                                                         |   | $             | 618,444,733                     |   |              | $      | 546,286,529 |   |

----

| 1st Constitution Bancorp and SubsidiariesConsolidated Statements of Income(unaudited)                                                         |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                          |   |
|                                                                                                                                          |   | Three months ended June 30, |   |   | Six months ended June 30, |   |
| INTEREST INCOME                                                                                                                               |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Loans, including fees                                                                                                                         |   | $ | 6,261,650 |   |   | $ | 6,127,318 |   |   | $ | 12,301,251 |   |   | $ | 12,136,418 |   |
| Securities                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                                                                                       |   |   | 1,181,655 |   |   |   | 916,342 |   |   |   | 2,419,310 |   |   |   | 1,891,743 |   |
| Tax-exempt                                                                                                                                    |   |   | 123,963 |   |   |   | 139,478 |   |   |   | 252,518 |   |   |   | 285,077 |   |
| Federal funds sold and short-term investments                                                                                                 |   |   | 24,071 |   |   |   | 8,992 |   |   |   | 32,665 |   |   |   | 45,948 |   |
| Total interest income                                                                                                                         |   |   | 7,591,339 |   |   |   | 7,192,130 |   |   |   | 15,005,744 |   |   |   | 14,359,186 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST EXPENSE                                                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                                      |   |   | 2,443,432 |   |   |   | 2,494,237 |   |   |   | 5,028,383 |   |   |   | 5,032,330 |   |
| Securities sold under agreement to repurchase            and other borrowed funds |   |   | 361,967 |   |   |   | 402,929 |   |   |   | 725,197 |   |   |   | 778,956 |   |
| Redeemable subordinated debentures                                                                                                            |   |   | 266,740 |   |   |   | 284,191 |   |   |   | 532,975 |   |   |   | 533,997 |   |
| Total interest expense                                                                                                                        |   |   | 3,072,139 |   |   |   | 3,181,357 |   |   |   | 6,286,555 |   |   |   | 6,345,283 |   |
| Net interest income                                                                                                                           |   |   | 4,519,200 |   |   |   | 4,010,773 |   |   |   | 8,719,189 |   |   |   | 8,013,903 |   |
| Provision for loan losses                                                                                                                     |   |   | 325,000 |   |   |   | 195,000 |   |   |   | 788,000 |   |   |   | 360,000 |   |
| Net interest income after provision for loan losses                                                                                           |   |   | 4,194,200 |   |   |   | 3,815,773 |   |   |   | 7,931,189 |   |   |   | 7,653,903 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NON-INTEREST INCOME                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Service charges on deposit accounts                                                                                                           |   |   | 216,235 |   |   |   | 197,556 |   |   |   | 454,754 |   |   |   | 383,444 |   |
| Gain on sale of loans                                                                                                                         |   |   | 340,993 |   |   |   | 285,559 |   |   |   | 613,186 |   |   |   | 595,603 |   |
| Income on bank-owned life insurance                                                                                                           |   |   | 102,305 |   |   |   | 92,818 |   |   |   | 193,327 |   |   |   | 184,645 |   |
| Other income                                                                                                                                  |   |   | 293,391 |   |   |   | 228,971 |   |   |   | 538,709 |   |   |   | 427,589 |   |
| Total non-interest income                                                                                                                     |   |   | 952,924 |   |   |   | 804,904 |   |   |   | 1,799,976 |   |   |   | 1,591,281 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NON-INTEREST EXPENSE                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                                                                                                |   |   | 2,294,066 |   |   |   | 2,073,066 |   |   |   | 4,521,395 |   |   |   | 4,051,127 |   |
| Occupancy expense                                                                                                                             |   |   | 443,007 |   |   |   | 432,423 |   |   |   | 895,672 |   |   |   | 864,438 |   |
| Data Processing expenses                                                                                                                      |   |   | 276,197 |   |   |   | 217,811 |   |   |   | 535,880 |   |   |   | 429,592 |   |
| FDIC insurance expenses                                                                                                                       |   |   | 704,025 |   |   |   | 46,635 |   |   |   | 803,783 |   |   |   | 71,661 |   |
| Other operating expenses                                                                                                                      |   |   | 1,084,394 |   |   |   | 847,207 |   |   |   | 2,065,572 |   |   |   | 1,614,674 |   |
| Total non-interest expenses                                                                                                                   |   |   | 4,801,689 |   |   |   | 3,617,142 |   |   |   | 8,822,302 |   |   |   | 7,031,492 |   |
|        Income before income taxes (benefit)                                                                |   |   | 345,435 |   |   |   | 1,003,535 |   |   |   | 908,863 |   |   |   | 2,213,692 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INCOME TAXES (Benefit)                                                                                                                        |   |   | (189,175 | ) |   |   | 285,689 |   |   |   | (102,437 | ) |   |   | 693,649 |   |
| Net income                                                                                                                                    |   |   | 534,610 |   |   |   | 717,846 |   |   |   | 1,011,300 |   |   |   | 1,520,043 |   |
| Dividends and accretion on preferred stock                                                                                                    |   |   | 176,985 |   |   |   | - |   |   |   | 365,635 |   |   |   | - |   |
| Net income available to common shareholders                                                                                                   |   | $ | 357,625 |   |   | $ | 717,846 |   |   | $ | 645,665 |   |   | $ | 1,520,043 |   |
|                                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET INCOME PER COMMON SHARE                                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                         |   | $ | 0.08 |   |   | $ | 0.17 |   |   | $ | 0.15 |   |   | $ | 0.36 |   |
| Diluted                                                                                                                                       |   | $ | 0.08 |   |   | $ | 0.17 |   |   | $ | 0.15 |   |   | $ | 0.36 |   |

----

|                                                                                                                                           |   |  PreferredStock |       |   |  CommonStock |   |       |  RetainedEarnings |   |   |  TreasuryStock |   |   | AccumulatedOtherComprehensiveLoss |    |   | TotalShareholders’Equity |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------|------------|--------|-------------------|--------|------------|------------------------|--------|--------|---------------------|--------|--------|-----------------------------------|---------|--------|--------------------------------|--------|
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| BALANCE, January 1, 2008                                                                                                                       |   | $                    | -          |   |              | $      | 32,514,936 |                   |   | $      | 9,009,955           |   |   | $                                 | (18,388 | )      |                           | $      | (533,186 | ) |   | $ | 40,973,317 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Adjustment to initially apply EITF 06-4                                                                                                        |   |                 |       |   |              |   |       |                   |   |   | (329,706            | )      |   |                              |    |   |                           |   |   |   |   |   | (329,706 | ) |
| Exercise of stock options, net of issuance of vested    shares under benefit programs                                      |   |                 |       |   |              |   | (10,161    | )                      |   |   |                |   |   |                              | 35,584  |   |                           |   |   |   |   |   | 25,423 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| FAS 123R share-based compensation                                                                                                              |   |                 |       |   |              |   | 62,148     |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   | 62,148 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Treasury stock, shares acquired at cost                                                                                                        |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              | (28,195 | )      |                           |   |   |   |   |   | (28,195 | ) |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Comprehensive Income:                                                                                                                          |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
|     Net Income for the six months   ended June 30, 2008                                                     |   |                 |       |   |              |   |       |                   |   |   | 1,520,043           |   |   |                              |    |   |                           |   |   |   |   |   | 1,520,043 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
|     Unrealized loss on securities        available for sale, net of tax benefit    |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   | (528,381 | ) |   |   | (528,381 | ) |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
|     Unrealized loss on interest rate swap contract         net of tax benefit |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   | (67,470 | ) |   |   | (67,470 | ) |
|      Minimum pension liability net of tax benefit                                                                     |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   | 48,339 |   |   |   | 48,339 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Comprehensive Income                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   | 972,531 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Balance, June 30, 2008                                                                                                                         |   | $                    | -          |   |              | $      | 32,566,923 |                   |   | $      | 10,200,292          |   |   | $                                 | (10,999 | )      |                           | $      | (1,080,698 | ) |   | $ | 41,675,518 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Balance, January 1, 2009                                                                                                                       |   | $                    | 11,387,828 |   |              | $      | 35,180,433 |                   |   | $      | 9,653,923           |   |   | $                                 | (53,331 | )      |                           | $      | (549,201 | ) |   | $ | 55,619,652 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| FAS 123R share-based compensation                                                                                                              |   |                 |       |   |              |   | 41,050     |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   | 41,050 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Treasury stock, shares acquired at cost                                                                                                        |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              | (67,226 | )      |                           |   |   |   |   |   | (67,226 | ) |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Exercise of stock options, net and issuance of vested   shares under benefit programs                                           |   |                 |       |   |              |   | 205,323    |                   |   |   |                |   |   |                              | 58,305  |   |                           |   |   |   |   |   | 263,628 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Dividends on preferred stock                                                                                                                   |   |                 |       |   |              |   |       |                   |   |   | (311,668            | )      |   |                              |    |   |                           |   |   |   |   |   | (311,668 | ) |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Preferred stock issuance cost                                                                                                                  |   |                 | (22,500    | )      |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   | (22,500 | ) |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Accretion of discount on preferred stock                                                                                                       |   |                 | 53,967     |   |              |   |       |                   |   |   | (53,967             | )      |   |                              |    |   |                           |   |   |   |   |   | 0 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Comprehensive Income:                                                                                                                          |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
|     Net Income for the six months   ended June 30, 2009                                                     |   |                 |       |   |              |   |       |                   |   |   | 1,011,300           |   |   |                              |    |   |                           |   |   |   |   |   | 1,011,300 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
|     Minimum pension liability, net of tax benefit                                                                          |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   | 35,971 |   |   |   | 35,971 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
|     Unrealized gain on securities for salenet of tax benefit                                                               |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   | 67,091 |   |   |   | 67,091 |   |
|    Unrealized gain on interest rate swap contractnet of tax benefit                                                             |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   | 66,453 |   |   |   | 66,453 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Comprehensive Income                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   | 1,180,815 |   |
|                                                                                                                                           |   |                 |       |   |              |   |       |                   |   |   |                |   |   |                              |    |   |                           |   |   |   |   |   |   |   |
| Balance, June 30, 2009                                                                                                                         |   | $                    | 11,419,295 |   |              | $      | 35,426,806 |                   |   | $      | 10,299,588          |   |   | $                                 | (62,252 | )      |                           | $      | (379,686 | ) |   | $ | 56,703,751 |   |

----

|                                                                                                                                  |   | Six Ended June 30, |        |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|
|                                                                                                                                  |   | 2009               |        |   | 2008 |   |
| OPERATING ACTIVITIES:                                                                                                            |   |               |        |   |   |   |
|      Net income                                                                                                   |   | $                  | 1,011,300   |   |   | $ | 1,520,043 |   |
|            Adjustments to reconcile net income                                                     |   |               |        |   |   |   |   |   |
|                 to net cash used in operating activities-                 |   |               |        |   |   |   |   |   |
|            Provision for loan losses                                                               |   |               | 788,000     |   |   |   | 360,000 |   |
|            Depreciation and amortization                                                           |   |               | 331,769     |   |   |   | 352,654 |   |
|            Net amortization of premiums and discounts on securities                                |   |               | 32,564      |   |   |   | 35,517 |   |
|            Gain on sales of loans held for sale                                                    |   |               | (613,186    | ) |   |   | (595,603 | ) |
|            Originations of loans held for sale                                                     |   |               | (85,249,642 | ) |   |   | (43,010,217 | ) |
|            Proceeds from sales of loans held for sale                                              |   |               | 67,078,485  |   |   |   | 40,189,755 |   |
|            Income on Bank – owned life insurance                                             |   |               | (193,327    | ) |   |   | (184,645 | ) |
|            Share-based compensation expense                                    |   |               | 121,050     |   |   |   | 161,293 |   |
|            Decrease in accrued interest receivable                                                 |   |               | 317,159     |   |   |   | 453,712 |   |
|            (Increase) in other assets                                     |   |               | (318,581    | ) |   |   | (662,423 | ) |
|            Increase in accrued interest payable                           |   |               | 1,700       |   |   |   | 30,675 |   |
|            Increase (decrease) in accrued expenses and other liabilities  |   |               | 1,028,197   |   |   |   | (1,403,034 | ) |
|                                                                                                                                  |
| Net cash used in operating activities                                                                                            |   |               | (15,664,512 | ) |   |   | (2,752,273 | ) |
|                                                                                                                                  |   |               |        |   |   |   |   |   |
| INVESTING ACTIVITIES:                                                                                                                 |   |               |        |   |   |   |   |   |
|      Purchases of securities -                                                                                    |   |               |        |   |   |   |   |   |
|            Available for sale                                             |   |               | (23,737,730 | ) |   |   | (11,241,517 | ) |
|            Held to maturity                                               |   |               | (1,619,834  | ) |   |   | - |   |
|      Proceeds from maturities and prepayments of securities -                                                     |   |               |        |   |   |   |   |   |
|            Available for sale                                             |   |               | 28,217,044  |   |   |   | 13,269,990 |   |
|            Held to maturity                                               |   |               | 2,707,480   |   |   |   | 7,202,946 |   |
|      Net increase in loans                                                                                        |   |               | (28,123,625 | ) |   |   | (70,324,408 | ) |
|      Additional investment in other real estate owned                                                                  |   |               | (296,468    | ) |   |   | (1,016,320 | ) |
|      Proceeds from sales of other real estate owned                                                                    |   |               | 2,390,489   |   |   |   | 880,212 |   |
|      Capital expenditures                                                                                         |   |               | (129,532    | ) |   |   | (142,570 | ) |
|                                                                                                                                  |
| Net cash used in investing activities                                                                                            |   |               | (20,592,176 | ) |   |   | (61,371,667 | ) |
|                                                                                                                                  |
| FINANCING ACTIVITIES:                                                                                                            |   |               |        |   |   |   |   |   |
|      Exercise of stock options and issuance of Treasury Stock                                                          |   |               | 263,628     |   |   |   | 25,423 |   |
|      Purchase of Treasury Stock                                                                                        |   |               | (67,226     | ) |   |   | (28,195 | ) |
|      Dividend paid on preferred stock                                                                                  |   |               | (236,668    | ) |   |   | - |   |
|      Preferred stock issuance costs paid                                                                               |   |               | (22,500     | ) |   |   | - |   |
|      Net increase in demand, savings and time deposits                                                            |   |               | 91,076,793  |   |   |   | 67,071,427 |   |
|      Net (repayments) increase in borrowings                                                                           |   |               | (21,000,000 | ) |   |   | 8,000,000 |   |
|                                                                                                                                  |
| Net cash provided by financing activities                                                                                        |   |               | 70,104,027  |   |   |   | 75,068,655 |   |
|                                                                                                                                  |
| Increase in cash and cash equivalents                                                                                            |   |               | 33,757,339  |   |   |   | 10,944,715 |   |
|                                                                                                                                  |
| CASH AND CASH EQUIVALENTS                                                                                                        |   |               |        |   |   |   |   |   |
|      AT BEGINNING OF PERIOD                                                                                            |   |               | 14,333,119  |   |   |   | 7,548,102 |   |
|                                                                                                                                  |
| CASH AND CASH EQUIVALENTS                                                                                                        |   |               |        |   |   |   |   |   |
|      AT END OF PERIOD                                                                                             |   | $                  | 48,090,458  |   |   | $ | 18,492,817 |   |
|                                                                                                                                  |
| SUPPLEMENTAL DISCLOSURES                                                                                                         |   |               |        |   |   |   |   |   |
|      OF CASH FLOW INFORMATION:                                                                                    |   |               |        |   |   |   |   |   |
|            Cash paid during the period for -                                                       |   |               |        |   |   |   |   |   |
| Interest                                                                                                                         |   | $                  | 6,284,855   |   |   | $ | 6,314,608 |   |
| Income taxes                                                                                                                     |   |               | 325,000     |   |   |   | 2,120,200 |   |
| Non-cash investing activities                                                                                                         |   |               |        |   |   |   |   |   |
| Real estate acquired in full satisfaction of loans in foreclosure                                                                     |   |               | 1,031,527   |   |   |   | 1,389,191 |   |

----

----

|                                                           |   | Three Months Ended June 30, 2009 |     |
|----------------------------------------------------------------|--------|----------------------------------|----------|
|                                                           |   |  Income                     |     |   | Weighted-averageshares |   |   | Per shareamount |   |
| Basic Earnings Per Common Share                                |   |                             |     |   |   |   |   |   |   |
| Net income                                                     |   | $                                | 534,610  |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                        |   |                             | (176,985 | ) |   |   |   |   |   |   |
| Income available to common shareholders                        |   |                             | 357,625  |   |   |   | 4,255,015 |   |   | $ | 0.08 |   |
|                                                           |   |                             |     |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                  |   |                             |     |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                        |   |                             | -        |   |   |   | 3,420 |   |   |   |   |   |
|                                                           |   |                             |     |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                              |   |                             |     |   |   |   |   |   |   |   |   |   |
| Income available to common shareholdersplus assumed conversion |   | $                                | 357,625  |   |   |   | 4,258,435 |   |   | $ | 0.08 |   |
|                                                           |   |

|                                                               |   | Three Months Ended June 30, 2008 |    |
|--------------------------------------------------------------------|--------|----------------------------------|---------|
|                                                               |   |  Income                     |    |   | Weighted-averageshares |   |   | Per shareAmount |   |
| Basic Earnings Per Common Share                                    |   |                             |    |   |   |   |   |   |   |
| Net income                                                         |   | $                                | 717,846 |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                            |   |                             | 0       |   |   |   |   |   |   |   |
| Income available to common shareholders                            |   |                             | 717,846 |   |   |   | 4,189,497 |   |   | $ | 0.17 |   |
|                                                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                      |   |                             |    |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                            |   |                             | -       |   |   |   | 53,517 |   |   |   | - |   |
|                                                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                                  |   |                             |    |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholdersplus assumed conversion |   | $                                | 717,846 |   |   |   | 4,243,014 |   |   | $ | 0.17 |   |
|                                                               |   |                             |    |   |   |   |   |   |   |   |   |   |

|                                                           |   | Six Months Ended June 30, 2009 |      |
|----------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                           |   |  Income                   |      |   | Weighted-averageshares |   |   | Per shareamount |   |
| Basic Earnings Per Common Share                                |   |                           |      |   |   |   |   |   |   |
| Net income                                                     |   | $                              | 1,011,300 |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                        |   |                           | (365,635  | ) |   |   |   |   |   |   |
| Income available to common shareholders                        |   |                           | 645,665   |   |   |   | 4,236,957 |   |   | $ | 0.15 |   |
|                                                           |   |                           |      |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                  |   |                           |      |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                        |   |                           |      |   |   |   | 3,140 |   |   |   |   |   |
|                                                           |   |                           |      |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                              |   |                           |      |   |   |   |   |   |   |   |   |   |
| Income available to common shareholdersplus assumed conversion |   | $                              | 645,665   |   |   |   | 4,240,097 |   |   | $ | 0.15 |   |

----

|                                                               |   | Six Months Ended June 30, 2008 |      |
|--------------------------------------------------------------------|--------|--------------------------------|-----------|
|                                                               |   | Income                         |      |   | Weighted-averageshares |   |   | Per shareAmount |   |
| Basic Earnings Per Common Share                                    |   |                           |      |   |   |   |   |   |   |
| Net income                                                         |   | $                              | 1,520,043 |   |   |   |   |   |   |   |
| Preferred stock dividends and accretion                            |   |                           | 0         |   |   |   |   |   |   |   |
| Income available to common shareholders                            |   |                           | 1,520,043 |   |   |   | 4,189,198 |   |   | $ | 0.36 |   |
|                                                               |   |                           |      |   |   |   |   |   |   |   |   |   |
| Effect of dilutive securities                                      |   |                           |      |   |   |   |   |   |   |   |   |   |
| Stock options and unvested stock awards                            |   |                           |      |   |   |   | 57,366 |   |   |   |   |   |
|                                                               |   |                           |      |   |   |   |   |   |   |   |   |   |
| Diluted Earnings Per Common Share                                  |   |                           |      |   |   |   |   |   |   |   |   |   |
| Net income available to common shareholdersplus assumed conversion |   | $                              | 1,520,043 |   |   |   | 4,246,563 |   |   | $ | 0.36 |   |

|                                                               |   |      |       |   | Gross      |   |      | Gross      |   |   |       |   |
|--------------------------------------------------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|
|                                                               |   | Amortized |       |   | Unrealized |   |      | Unrealized |   |   | Fair       |   |
| June 30, 2009                                                 |   | Cost      |       |   | Gains      |   |      | Losses     |   |   | Value      |   |
|                                                               |   |      |       |   |       |   |      |       |   |   |       |   |
| Available for sale-                                                |   |      |       |   |       |   |      |       |   |   |       |   |
| U. S. Treasury securities and                                      |   |      |       |   |       |   |      |       |   |   |       |   |
| obligations of U.S. Government                                     |   |      |       |   |       |   |      |       |   |   |       |   |
| sponsored corporations and agencies                                |   | $         | 27,715,252 |   |       | $      | 244,707   |       |   | $      | (26,156    | )      |   | $ | 27,933,803 |   |
|     Collateralized mortgage obligations        |   |      | 6,129,229  |   |       |   | 22,450    |       |   |   | (194,555   | )      |   |   | 5,957,124 |   |
| Mortgage backed securities                                         |   |      | 47,685,783 |   |       |   | 2,050,411 |       |   |   | 0          |   |   |   | 49,736,194 |   |
| Obligations of State and                                           |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Political subdivisions                                             |   |      | 2,265,478  |   |       |   | 19,793    |       |   |   | (14,598    | )      |   |   | 2,270,673 |   |
|     Trust preferred debt securities            |   |      | 2,456,042  |   |       |   | 0         |       |   |   | (1,074,655 | )      |   |   | 1,381,387 |   |
|     Restricted stock                           |   |      | 1,824,900  |   |       |   | 0         |       |   |   | 0          |   |   |   | 1,824,900 |   |
|     Mutual fund                                |   |      | 25,000     |   |       |   | 0         |       |   |   | 0          |   |   |   | 25,000 |   |
|                                                               |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                                               |   | $         | 88,101,684 |   |       | $      | 2,337,361 |       |   | $      | (1,309,964 | )      |   | $ | 89,129,081 |   |
|                                                               |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Held to maturity-                                                  |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| U. S. Treasury securities and                                      |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| obligations of U.S. Government sponsored corporations and agencies |   | $         | 10,000,000 |   |       | $      | 96,900    |       |   | $      | 0          |   |   | $ | 10,096,900 |   |
|     Collateralized mortgage obligations        |   |      | 6,826,756  |   |       |   | 154,709   |       |   |   | 0          |   |   |   | 6,981,465 |   |
| Mortgage backed securities                                         |   |      | 3,489,331  |   |       |   | 37,016    |       |   |   | 0          |   |   |   | 3,526,347 |   |
| Obligations of State and                                           |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
| Political subdivisions                                             |   |      | 10,076,103 |   |       |   | 120,995   |       |   |   | (58,141    | )      |   |   | 10,138,957 |   |
| Trust preferred debt securities                                    |   |      | 992,904    |   |       |   | 0         |       |   |   | (809,442   | )      |   |   | 183,462 |   |
|     Corporate bonds                            |   |      | 4,015,132  |   |       |   | 42,811    |       |   |   | (686       | )      |   |   | 4,057,257 |   |
|                                                               |   |      |       |   |       |   |      |       |   |   |       |   |   |   |   |   |
|                                                               |   | $         | 35,400,226 |   |       | $      | 452,431   |       |   | $      | (868,269   | )      |   | $ | 34,984,388 |   |

----

|                                                                 |   | AmortizedCost |       |   | FairValue |   |
|----------------------------------------------------------------------|--------|---------------|------------|--------|-----------|--------|
| Available for sale-                                                  |   |          |       |   |      |   |
|      Due in one year or less                |   | $             | 2,309,679  |   |      | $      | 2,313,576 |   |
|      Due after one year through five years  |   |          | 28,825,264 |   |      |   | 29,065,158 |   |
|      Due after five years through ten years |   |          | 7,917,556  |   |      |   | 8,139,551 |   |
|      Due after ten years                    |   |          | 49,049,185 |   |      |   | 49,610,796 |   |
| Total                                                                |   | $             | 88,101,684 |   |      | $      | 89,129,081 |   |
|                                                                 |   |          |       |   |      |   |   |   |
| Held to maturity-                                                    |   |          |       |   |      |   |   |   |
|      Due in one year or less                |   | $             | 12,077,644 |   |      | $      | 12,193,523 |   |
|      Due after one year through five years  |   |          | 5,598,358  |   |      |   | 5,672,826 |   |
|      Due after five years through ten years |   |          | 6,520,367  |   |      |   | 6,594,870 |   |
|      Due after ten years                    |   |          | 11,203,857 |   |      |   | 10,523,169 |   |
| Total                                                                |   | $             | 35,400,226 |   |      | $      | 34,984,388 |   |

| June 30, 2009                                                                                                                                                                                 |   |                |   |   | Less than 12 months |   |       | 12 months or longer |   |   | Total      |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|--------|--------|---------------------|--------|------------|---------------------|--------|--------|------------|--------|
|                                                                                                                                                                                          |   | Number ofSecurities |   |   | Fair Value          |   |       | Unrealized Losses   |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
| U.S. Treasury securities and obligations      of U.S. Government sponsored          corporations and agencies |   |                | 7      |   |                | $      | 8,774,930  |                |   | $      | (26,157    | )      |   | $ | 0 |   |   | $ | 0 |   |   | $ | 8,774,930 |   |   | $ | (26,157 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Collateralized Mortgage Obligations                                                                                                                                                           |   |                | 10     |   |                | $      | 3,482,940  |                |   | $      | (57,132    | )      |   | $ | 515,028 |   |   | $ | (137,423 | ) |   | $ | 3,997,968 |   |   | $ | (194,555 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of State and Political    Subdivisions                                                                                                                        |   |                | 11     |   |                |   | 3,022,698  |                |   |   | (65,020    | )      |   |   | 157,553 |   |   |   | (7,718 | ) |   |   | 3,180,251 |   |   |   | (72,738 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Trust preferred securities                                                                                                                                                                    |   |                | 5      |   |                |   | 0          |                |   |   | 0          |   |   |   | 1,564,849 |   |   |   | (1,884,097 | ) |   |   | 1,564,849 |   |   |   | (1,884,097 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds                                                                                                                                                                               |   |                | 2      |   |                |   | 756,544    |                |   |   | (686       | )      |   |   | 0 |   |   |   | 0 |   |   |   | 756,544 |   |   |   | (686 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Total temporarily impaired securities                                                                                                                                             |   |                | 35     |   |                | $      | 16,037,112 |                |   | $      | (148,995   | )      |   | $ | 2,237,430 |   |   | $ | (2,029,238 | ) |   | $ | 18,274,542 |   |   | $ | (2,178,233 | ) |
|                                                                                                                                                                                          |   |                |   |   |                |   |       |                |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Stock Options                                   |   | Number ofShares |    |   | WeightedAverageExercise Price |   |   | WeightedAverageRemainingContractualTerm (years) |   |   | AggregateIntrinsicValue |   |
|-------------------------------------------------|--------|-----------------|---------|--------|-------------------------------|--------|--------|-------------------------------------------------|--------|--------|-------------------------|--------|
| Outstanding at January 1, 2009                  |   |            | 164,041 |   |                          | $      | 9.92   |                                            |   |   |                    |   |   |   |
|      Options Granted   |   |            | 17,220  |   |                          |   | 10.00  |                                            |   |   |                    |   |   |   |
|      Options Exercised |   |            | (53,218 | )      |                          |   | 4.70   |                                            |   |   |                    |   |   |   |
|      Options Forfeited |   |            | -       |   |                          |   | -      |                                            |   |   |                    |   |   |   |
|      Options Expired   |   |            | -       |   |                          |   | -      |                                            |   |   |                    |   |   |   |
| Outstanding at June 30, 2009                    |   |            | 128,043 |   |                          | $      | 12.10  |                                            |   |   | 6.1                     |   |   | $ | 55,049 |   |
|                                            |   |            |    |   |                          |   |   |                                            |   |   |                    |   |   |   |   |   |
| Exercisable at June 30, 2009                    |   |            | 92,213  |   |                          | $      | 11.77  |                                            |   |   | 4.9                     |   |   | $ | 55,049 |   |

----

| Fair value of Options granted |   | $      | 3.26   |
|-------------------------------|--------|--------|--------|
| Risk-free rate of return      |   |   | 1.60%  |
| Expected Option life in years |   |   | 7      |
| Expected volatility           |   |   | 27.58% |
| Expected dividends (1)        |   |   | -      |

| (1)   | To date, the Company has not paid cash dividends on its common stock. |
|-----------------|-----------------------------------------------------------------------|

| Stock Awards                               |   | Number ofShares |   |   | Average Grant Date Fair Value |   |
|--------------------------------------------|--------|-----------------|--------|--------|------------------------------------|--------|
| Non-vested stock awards at January 1, 2009 |   |            | 30,470 |   |                               | $      | 14.80 |   |
| Shares granted                             |   |            | 22,260 |   |                               |   | 10.00 |   |
| Shares vested                              |   |            | -      |   |                               |   | - |   |
| Shares forfeited                           |   |            | -      |   |                               |   | - |   |
| Non-vested stock awards at June 30, 2009   |   |            | 52,730 |   |                               | $      | 12.77 |   |

----

|                          |   | Three months endedJune 30, |    |   | Six months endedJune 30, |   |
|-------------------------------|--------|----------------------------|---------|--------|--------------------------|--------|
|                          |   | 2009                       |    |   | 2008                     |   |   | 2009 |   |   | 2008 |   |
|                          |   |                       |    |   |                     |   |   |   |   |
| Service cost                  |   | $                          | 79,544  |   |                     | $      | 57,637 |   |   | $ | 140,638 |   |   | $ | 115,274 |   |
| Interest cost                 |   |                       | 45,630  |   |                     |   | 39,830 |   |   |   | 91,260 |   |   |   | 79,660 |   |
| Actuarial loss recognized     |   |                       | 21,744  |   |                     |   | 15,375 |   |   |   | 43,488 |   |   |   | 30,750 |   |
| Prior service cost recognized |   |                       | 24,750  |   |                     |   | 24,858 |   |   |   | 49,608 |   |   |   | 49,716 |   |
|                          |   | $                          | 171,668 |   |                     | $      | 137,700 |   |   | $ | 324,994 |   |   | $ | 275,400 |   |
|                          |   |                       |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |

|                                 |   | June 30, |       |   | December 31, |   |
|--------------------------------------|--------|----------|------------|--------|--------------|--------|
|                                 |   | 2009     |       |   | 2008         |   |
| Unrealized holding gains on          |   |     |       |   |         |   |
| securities available for sale        |   | $        | 1,027,397  |   |         | $      | 926,166 |   |
| Related income tax effect            |   |     | (356,779   | )      |         |   | (322,639 | ) |
|                                 |   |     | 670,618    |   |         |   | 603,527 |   |
|                                 |   |     |       |   |         |   |   |   |
| Unrealized loss on interest rate     |   |     |       |   |         |   |   |   |
| swap contract                        |   |     | (1,028,676 | )      |         |   | (1,159,156 | ) |
| Related income tax effect            |   |     | 399,721    |   |         |   | 463,748 |   |
|                                 |   |     | (628,955   | )      |         |   | (695,408 | ) |
|                                 |   |     |       |   |         |   |   |   |
| Pension liability                    |   |     | (704,334   | )      |         |   | (761,439 | ) |
| Related income tax effect            |   |     | 282,985    |   |         |   | 304,119 |   |
|                                 |   |     | (421,349   | )      |         |   | (457,320 | ) |
|                                 |   |     |       |   |         |   |   |   |
| Accumulated other comprehensive loss |   | $        | (379,686   | )      |         | $      | (549,201 | ) |
|                                 |   |     |       |   |         |   |   |   |

----

|                                    |   | Three Months Ended |     | Six Months Ended |     |
|-----------------------------------------|--------|--------------------|----------|------------------|----------|
|                                    |   | June 30,           |     |             | June 30, |   |   | June 30, |   |   | June 30, |   |
|                                    |   | 2009               |     |             | 2008     |   |   | 2009 |   |   | 2008 |   |
|                                    |   |               |     |             |     |   |   |   |   |   |   |   |
| Unrealized holding gain (loss) on       |   |               |     |             |     |   |   |   |   |   |   |   |
| securities available for sale           |   | $                  | (217,341 | )                |     | $ | (1,761,761 | ) |   | $ | 101,231 |   |   | $ | (800,578 | ) |
| Related income tax effect               |   |               | 73,896   |             |     |   | 598,863 |   |   |   | (34,140 | ) |   |   | 272,197 |   |
|                                    |   |               | (143,445 | )                |     |   | (1,162,898 | ) |   |   | 67,091 |   |   |   | (528,381 | ) |
|                                    |   |               |     |             |     |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized gain (loss) on interest rate |   |               |     |             |     |   |   |   |   |   |   |   |   |   |   |   |
| swap contract                           |   |               | 101,099  |             |     |   | 614,841 |   |   |   | 130,480 |   |   |   | (111,437 | ) |
| Related income tax effect               |   |               | (52,292  | )                |     |   | (245,893 | ) |   |   | (64,027 | ) |   |   | 43,967 |   |
|                                    |   |               | 48,807   |             |     |   | 368,948 |   |   |   | 66,453 |   |   |   | (67,470 | ) |
|                                    |   |               |     |             |     |   |   |   |   |   |   |   |   |   |   |   |
| Pension liability amortization          |   |               | 10,505   |             |     |   | 80,467 |   |   |   | 57,105 |   |   |   | 80,467 |   |
| Related income tax effect               |   |               | (4,221   | )                |     |   | (32,128 | ) |   |   | (21,134 | ) |   |   | (32,128 | ) |
|                                    |   |               | 6,284    |             |     |   | 48,339 |   |   |   | 35,971 |   |   |   | 48,339 |   |
|                                    |   |               |     |             |     |   |   |   |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss)       |   | $                  | (88,354  | )                |     | $ | (745,611 | ) |   | $ | 169,515 |   |   | $ | (547,512 | ) |
|                                    |   |               |     |             |     |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

|   | Level 1:  | Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. |
|--------|----------------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2:  | Quoted prices in markets that are not active, or inputs that are observable either directly or indirectly, for substantially the full term of the asset or liability. |
|--------|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3:  | Prices or valuation techniques that require inputs that are both significant to the fair value measurement and unobservable (i.e., supported with little or no market activity). |
|--------|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                          |   | Level 1 Inputs |   |   | Level 2 Inputs |   |       | Level 3 Inputs |   |   | Total Fair Value |   |
|-------------------------------|--------|----------------|--------|--------|----------------|--------|------------|----------------|--------|--------|------------------|--------|
| June 30, 2009:                |   |           |   |   |           |   |       |           |   |   |             |   |
| Securities available for sale |   | $              | -      |   |           | $      | 89,129,081 |           |   | $      | -                |   |   | $ | 89,129,081 |   |
| Derivative liabilities        |   |           | -      |   |           |   | (1,028,676 | )              |   |   | -                |   |   |   | (1,028,676 | ) |
|                          |   |           |   |   |           |   |       |           |   |   |             |   |   |   |   |   |
| December 31, 2008:            |   |           |   |   |           |   |       |           |   |   |             |   |   |   |   |   |
| Securities available for sale |   | $              | -      |   |           | $      | 93,477,023 |           |   | $      | -                |   |   | $ | 93,477,023 |   |
| Derivative liabilities        |   |           | -      |   |           |   | (1,159,156 | )              |   |   | -                |   |   |   | (1,159,156 | ) |

|                    |   | Level 1 Inputs |   |   | Level 2 Inputs |   |   | Level 3 Inputs |   |   | Total Fair Value |   |
|-------------------------|--------|----------------|--------|--------|----------------|--------|--------|----------------|--------|--------|------------------|--------|
| June 30, 2009:          |   |           |   |   |           |   |   |           |   |   |             |   |
| Impaired loans          |   | $              | -      |   |           | $      | -      |           |   | $      | 3,011,770        |   |   | $ | 3,011,770 |   |
| Other real estate owned |   |           | -      |   |           |   | -      |           |   |   | 3,234,042        |   |   |   | 3,234,042 |   |
|                    |   |           |   |   |           |   |   |           |   |   |             |   |   |   |   |   |
| December 31, 2008:      |   |           |   |   |           |   |   |           |   |   |             |   |   |   |   |   |
| Impaired loans          |   | $              | -      |   |           | $      | -      |           |   | $      | 1,427,673        |   |   | $ | 1,427,673 |   |
| Other real estate owned |   |           | -      |   |           |   | -      |           |   |   | 4,296,536        |   |   |   | 4,296,536 |   |

----

|                                     |   | June 30, 2009 |          |   | December 31, 2008 |
|------------------------------------------|--------|---------------|---------------|--------|-------------------|
|                                     |   | Carrying      |          |   | Estimated         |   |   | Carrying |   |   | Estimated |
|                                     |   | Value         |          |   | Fair Value        |   |   | Value |   |   | Fair Value |
|                                     |   |          |          |   |              |   |   |   |   |   |   |
| Cash and cash equivalents                |   | $             | 48,090,458    |   |              | $ | 48,090,458 |   |   | $ | 14,333,119 |   |   | $ | 14,333,119 |
| Securities available for sale       |   |          | 89,129,081    |   |              |   | 89,129,081 |   |   |   | 93,477,023 |   |   |   | 93,477,023 |
| Securities held to maturity         |   |          | 35,400,226    |   |              |   | 34,984,388 |   |   |   | 36,550,577 |   |   |   | 36,140,379 |
| Loans held for sale                 |   |          | 24,486,425    |   |              |   | 24,486,425 |   |   |   | 5,702,082 |   |   |   | 5,702,082 |
| Gross loans                         |   |          | 404,176,483   |   |              |   | 403,952,000 |   |   |   | 377,348,416 |   |   |   | 382,020,000 |
| Accrued interest receivable              |   |          | 1,875,442     |   |              |   | 1,875,442 |   |   |   | 2,192,601 |   |   |   | 2,192,601 |
| Deposits                            |   |          | (505,761,524) |   |              |   | (507,585,000) |   |   |   | (414,684,731) |   |   |   | (416,809,000) |
| Other borrowings                    |   |          | (30,500,000)  |   |              |   | (33,266,000) |   |   |   | (51,500,000) |   |   |   | (54,486,000) |
| Redeemable subordinated debentures  |   |          | (18,557,000)  |   |              |   | (18,559,000) |   |   |   | (18,557,000) |   |   |   | (18,583,000) |
| Interest rate swap contract         |   |          | (1,028,676)   |   |              |   | (1,028,676) |   |   |   | (1,159,156) |   |   |   | (1,159,156) |
| Accrued interest payable                 |   |          | (1,985,802)   |   |              |   | (1,985,802) |   |   |   | (1,984,102) |   |   |   | (1,984,102) |

|  Maturity |  Hedged Liability | NotionalAmounts | Swap FixedInterest Rates | Swap VariableInterest Rates        |
|----------------|------------------------|-----------------|--------------------------|------------------------------------|
|           |                   |            |                     |                               |
| June 15, 2011  | Subordinated Debenture | $18,000,000     | 5.87%                    | 3 month LIBOR plus165 basis points |

----

----

----

----

| Non-interest Expenses                   |   |                        |      |   |   |   |
|-----------------------------------------|--------|-----------------------------|-----------|--------|--------|--------|
|                                    |   | Three months ended June 30, |      |
|                                    |   | 2009                        |      |   | 2008   |   |
| Salaries and employee benefits          |   | $                           | 2,294,066 |   |   | $      | 2,073,066 |   |
| Occupancy expenses                      |   |                        | 443,007   |   |   |   | 432,423 |   |
| Equipment expense                       |   |                        | 167,358   |   |   |   | 153,583 |   |
| Marketing                               |   |                        | 42,773    |   |   |   | 73,206 |   |
| Data processing services                |   |                        | 276,197   |   |   |   | 217,811 |   |
| Regulatory, professional and other fees |   |                        | 358,547   |   |   |   | 273,191 |   |
| FDIC insurance expense                  |   |                        | 704,025   |   |   |   | 46,635 |   |
| Office expense                          |   |                        | 142,999   |   |   |   | 144,526 |   |
| All other expenses                      |   |                        | 372,717   |   |   |   | 202,701 |   |
|                                    |   | $                           | 4,801,689 |   |   | $      | 3,617,142 |   |
|                                    |   |                        |      |   |   |   |   |   |

----

----

----

| Average Balance Sheets with Resultant Interest and Rates |
|----------------------------------------------------------|
| (yields on a tax-equivalent basis)                       | Six months ended June 30, 2009 | Six months ended June 30, 2008 |
|                                                     | AverageBalance | Interest | AverageRate | AverageBalance | Interest | AverageRate |
| Assets:                                                  |   |   |   |   |   |   |
| Federal Funds Sold/Short-Term Investments                | $1,930,829 | $32,665 | 3.41% | $3,315,021 | $45,948 | 2.80% |
|  Investment Securities:                             |   |   |   |   |   |   |
| Taxable                                                  | 108,255,221 | 2,419,310 | 4.51% | 75,859,885 | 1,891,743 | 5.03% |
| Tax-exempt                                               | 12,915,459 | 373,725 | 5.84% | 14,905,787 | 421,912 | 5.71% |
| Total                                                    | 121,170,680 | 2,793,035 | 4.65% | 90,765,672 | 2,313,655 | 5.14% |
|                                                     |   |   |   |   |   |   |
| Loan Portfolio:                                          |   |   |   |   |   |   |
| Construction                                             | 92,634,819 | 2,809,468 | 6.12% | 125,325,518 | 4,465,079 | 7.18% |
| Residential real estate                                  | 11,231,769 | 333,877 | 5.99% | 10,262,589 | 326,308 | 6.41% |
| Home Equity                                              | 14,957,939 | 438,081 | 5.91% | 14,846,031 | 483,102 | 6.56% |
| Commercial and commercial real estate                    | 136,927,234 | 4,728,139 | 6.96% | 124,908,153 | 4,606,553 | 7.44% |
| Mortgage warehouse lines                                 | 122,836,692 | 2,792,042 | 4.58% | 42,836,780 | 1,052,384 | 4.95% |
| Installment                                              | 809,691 | 32,657 | 8.13% | 1,406,142 | 55,781 | 8.00% |
| All Other Loans                                          | 31,372,046 | 1,166,987 | 7.50% | 25,666,806 | 1,147,211 | 9.01% |
| Total                                                    | 410,770,190 | 12,301,251 | 6.04% | 345,252,019 | 12,136,418 | 7.09% |
|                                                     |   |   |   |   |   |   |
| Total Interest-Earning Assets                            | 533,871,699 | 15,126,951 | 5.71% | 439,332,712 | 14,496,021 | 6.65% |
|                                                     |   |   |   |   |   |   |
| Allowance for Loan Losses                                | (3,948,215) |   |   | (3,503,487) |   |   |
| Cash and Due From Bank                                   | 37,090,915 |   |   | 11,230,919 |   |   |
| Other Assets                                             | 21,097,384 |   |   | 21,353,707 |   |   |
| Total Assets                                             | $588,111,783 |   |   | $468,413,851 |   |   |
|  Interest-Bearing Liabilities:                      |   |   |   |   |   |   |
| Money Market and NOW Accounts                            | $97,677,148 | $967,521 | 2.00% | $86,246,257 | $1,054,068 | 2.46% |
| Savings Accounts                                         | 123,068,983 | 1,316,408 | 2.16% | 74,058,876 | 957,054 | 2.61% |
| Certificates of Deposit                                  | 175,994,379 | 2,744,454 | 3.14% | 137,599,681 | 3,021,208 | 4.43% |
| Other Borrowed Funds                                     | 32,525,967 | 725,197 | 4.50% | 34,161,538 | 778,956 | 4.60% |
| Trust Preferred Securities                               | 18,557,000 | 532,975 | 5.79% | 18,557,000 | 533,997 | 5.80% |
| Total Interest-Bearing Liabilities                       | 447,823,477 | 6,286,555 | 2.83% | 350,623,352 | 6,345,283 | 3.65% |
|                                                     |   |   |   |   |   |   |
| Net Interest Spread                                      |   |   | 2.88% |   |   | 3.00% |
|                                                     |   |   |   |   |   |   |

| Demand Deposits                                 | 78,934,727         |       |   | 71,276,343         |       |   |
|-------------------------------------------------|--------------------|------------|--------|--------------------|------------|--------|
| Other Liabilities                               | 5,537,806          |       |   | 4,842,204          |       |   |
| Total Liabilities                               | 532,296,010        |       |   | 426,741,899        |       |   |
| Shareholders’ Equity                      | 55,815,773         |       |   | 41,671,952         |       |   |
| Total Liabilities and Shareholders’Equity |  $588,111,783 |       |   |  $468,413,851 |       |   |
|                                            |               |       |   |               |       |   |
| Net Interest Margin                             |               | $8,840,396 | 3.34%  |               | $8,150,738 | 3.74%  |
|                                            |               |       |   |               |       |   |

----

----

| Non-interest Expenses                   |   |                      |      |   |   |   |
|-----------------------------------------|--------|---------------------------|-----------|--------|--------|--------|
|                                    |   | Six months ended June 30, |      |
|                                    |   | 2009                      |      |   | 2008   |   |
| Salaries and employee benefits          |   | $                         | 4,521,395 |   |   | $      | 4,051,127 |   |
| Occupancy expenses                      |   |                      | 895,672   |   |   |   | 864,438 |   |
| Equipment expense                       |   |                      | 322,438   |   |   |   | 291,374 |   |
| Marketing                               |   |                      | 82,214    |   |   |   | 139,535 |   |
| Data processing services                |   |                      | 535,880   |   |   |   | 429,592 |   |
| Regulatory, professional and other fees |   |                      | 703,603   |   |   |   | 419,883 |   |
| FDIC insurance expense                  |   |                      | 803,783   |   |   |   | 71,661 |   |
| Office expense                          |   |                      | 271,036   |   |   |   | 285,697 |   |
| All other expenses                      |   |                      | 686,282   |   |   |   | 478,185 |   |
|                                    |   | $                         | 8,822,302 |   |   | $      | 7,031,492 |   |
|                                    |   |                      |      |   |   |   |   |   |

----

----

| Loan Portfolio Composition    |   | June 30, 2009 |        | December 31, 2008 |
|-------------------------------|--------|---------------|-------------|-------------------|
| Component                     |   | Amount        |        | %of total         |   | Amount |   | %of total |
| Construction loans            |   | $             | 90,769,503  |              | 22% |   | $ | 94,163,997 |   | 25% |
| Residential real estate loans |   |          | 10,908,031  |              | 3% |   |   | 11,078,402 |   | 3% |
| Commercial business           |   |          | 56,294,413  |              | 14% |   |   | 57,528,879 |   | 15% |
| Commercial real estate        |   |          | 96,228,145  |              | 24% |   |   | 90,904,418 |   | 24% |
| Mortgage warehouse lines      |   |          | 134,089,494 |              | 33% |   |   | 106,000,231 |   | 28% |
| Loans to individuals          |   |          | 15,088,195  |              | 4% |   |   | 16,797,194 |   | 5% |
| Deferred loan fees and costs  |   |          | 584,686     |              | 0% |   |   | 647,673 |   | 0% |
| All other loans               |   |          | 214,016     |              | 0% |   |   | 227,622 |   | 0% |
|                          |   | $             | 404,176,483 |              | 100% |   | $ | 377,348,416 |   | 100% |

----

----

|                                         |   |     |      |   |         |   |
|---------------------------------------------------|--------|----------|-----------|--------|--------------|--------|
| Non-Performing Assets and Loans                   |   | June 30, |      |   | December 31, |   |
|                                              |   | 2009     |      |   | 2008         |   |
| Non-Performing loans:                             |   |     |      |   |         |   |
| Loans 90 days or more past due and still accruing |   | $        | 0         |   |         | $      | 0 |   |
| Non-accrual loans                                 |   |     | 5,221,174 |   |         |   | 3,351,777 |   |
| Total non-performing loans                        |   |     | 5,221,174 |   |         |   | 3,351,777 |   |
| Other real estate owned                           |   |     | 3,234,042 |   |         |   | 4,296,536 |   |
| Total non-performing assets                       |   | $        | 8,455,216 |   |         | $      | 7,648,313 |   |
|                                              |   |     |      |   |         |   |   |   |
| Non-performing loans to total loans               |   |     | 1.29%     |   |         |   | 0.89% |   |
| Non-performing assets to total assets             |   |     | 1.37%     |   |         |   | 1.40% |   |

----

|   | · | General economic conditions. |
|--------|--------|------------------------------|

|   | · | Trends in charge-offs. |
|--------|--------|------------------------|

|   | · | Trends and levels of delinquent loans. |
|--------|--------|----------------------------------------|

|   | · | Trends and levels of non-performing loans, including loans over 90 days delinquent. |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | Trends in volume and terms of loans. |
|--------|--------|--------------------------------------|

|   | · | Levels of allowance for specific classified loans. |
|--------|--------|----------------------------------------------------|

|   | · | Credit concentrations. |
|--------|--------|------------------------|

----

| Allowance for Loan Losses                               |   | Six Months EndedJune 30,2009 |        |   | Year EndedDecember 31,2008 |   |        | Six MonthsEndedJune 30,2008 |   |
|---------------------------------------------------------|--------|------------------------------|-------------|--------|----------------------------|--------|-------------|-----------------------------|--------|
| Balance, beginning of period                            |   | $                            | 3,684,764   |   |                       | $      | 3,348,080   |                        |   | $ | 3,348,080 |   |
| Provision charged to operating expenses                 |   |                         | 788,000     |   |                       |   | 640,000     |                        |   |   | 360,000 |   |
|                                                    |   |                         |        |   |                       |   |        |                        |   |   |   |   |
| Loans charged off:                                      |   |                         |        |   |                       |   |        |                        |   |   |   |   |
| Construction loans                                      |   |                         | -           |   |                       |   | (53,946     | )                           |   |   | (53,946 | ) |
| Residential real estate loans                           |   |                         | -           |   |                       |   | (31,865     | )                           |   |   | - |   |
| Commercial and commercial real estate                   |   |                         | (270,790    | )      |                       |   | (220,565    | )                           |   |   | (18,368 | ) |
| Loans to individuals                                    |   |                         | -           |   |                       |   | -           |                        |   |   | - |   |
| Lease financing                                         |   |                         | -           |   |                       |   | -           |                        |   |   | - |   |
| All other loans                                         |   |                         | -           |   |                       |   | -           |                        |   |   | - |   |
|                                                    |   |                         | (270,790    | )      |                       |   | (306,376    | )                           |   |   | (72,314 | ) |
| Recoveries:                                             |   |                         |        |   |                       |   |        |                        |   |   |   |   |
| Construction loans                                      |   |                         | -           |   |                       |   | -           |                        |   |   | - |   |
| Residential real estate loans                           |   |                         | -           |   |                       |   | -           |                        |   |   | - |   |
| Commercial and commercial real estate                   |   |                         | 1,559       |   |                       |   | 3,060       |                        |   |   | - |   |
| Loans to individuals                                    |   |                         | 5,200       |   |                       |   | -           |                        |   |   | - |   |
| Lease financing                                         |   |                         | -           |   |                       |   | -           |                        |   |   | - |   |
| All other loans                                         |   |                         | -           |   |                       |   | -           |                        |   |   | - |   |
|                                                    |   |                         | 6,759       |   |                       |   | 3,060       |                        |   |   | 0 |   |
|                                                    |   |                         |        |   |                       |   |        |                        |   |   |   |   |
| Net (charge offs)                                       |   |                         | (264,031    | )      |                       |   | (303,316    | )                           |   |   | (72,314 | ) |
| Balance, end of period                                  |   | $                            | 4,208,733   |   |                       | $      | 3,684,764   |                        |   | $ | 3,635,766 |   |
|                                                    |   |                         |        |   |                       |   |        |                        |   |   |   |   |
| Loans:                                                  |   |                         |        |   |                       |   |        |                        |   |   |   |   |
| At period end                                           |   | $                            | 404,176,483 |   |                       | $      | 377,348,416 |                        |   | $ | 363,623,631 |   |
| Average during the period                               |   |                         | 393,845,224 |   |                       |   | 340,666,744 |                        |   |   | 345,252,017 |   |
| Net annualized charge offs to average loans outstanding |   |                         | (0.13%      | )      |                       |   | (0.09%      | )                           |   |   | (0.04% | ) |
| Allowance for loan losses to:                           |   |                         |        |   |                       |   |        |                        |   |   |   |   |
| Total loans at period end                               |   |                         | 1.04%       |   |                       |   | 0.98%       |                        |   |   | 1.00% |   |
| Non-performing loans                                    |   |                         | 80.61%      |   |                       |   | 109.93%     |                        |   |   | 147.14% |   |
|                                                    |   |                         |        |   |                       |   |        |                        |   |   |   |   |

----

|                                         |   | June 30,2009 |        |   | December 31, 2008 |   |
|----------------------------------------------|--------|--------------|-------------|--------|-------------------|--------|
| Demand                                       |   |         |        |   |              |   |
|     Non-interest bearing |   | $            | 86,778,192  |   |              | $      | 71,772,486 |   |
|     Interest bearing     |   |         | 97,945,365  |   |              |   | 82,842,413 |   |
| Savings                                      |   |         | 145,182,326 |   |              |   | 83,410,405 |   |
| Time                                         |   |         | 175,855,641 |   |              |   | 176,659,427 |   |
|                                         |   | $            | 505,761,524 |   |              | $      | 414,684,731 |   |
|                                         |   |         |        |   |              |   |   |   |

----

----

|                                   | Actual      | For CapitalAdequacy Purposes | To Be Well CapitalizedUnder PromptCorrective ActionProvision |
|----------------------------------------|-------------|------------------------------|--------------------------------------------------------------|
| Amount                                 | Ratio       | Amount                       | Ratio                                                        | Amount | Ratio |
| As of June 30, 2009                    |        |                         |                                                         |   |   |   |
| Company                                |        |                         |                                                         |   |   |   |
| Total Capital to Risk Weighted Assets  | $77,569,672 | 17.08%                       | $36,336,395                                                  | >8% | N/A | N/A |
| Tier 1 Capital to Risk Weighted Assets | 73,360,939  | 16.15%                       | 18,168,198                                                   | >4% | N/A | N/A |
| Tier 1 Capital to Average Assets       | 73,360,939  | 12.15%                       | 24,150,172                                                   | >4% | N/A | N/A |
| Bank                                   |        |                         |                                                         |   |   |   |
| Total Capital to Risk Weighted Assets  | $76,144,628 | 16.80%                       | $36,266,640                                                  | >8% | $45,333,300 | >10% |
| Tier 1 Capital to Risk Weighted Assets | 71,935,895  | 15.87%                       | 18,133,320                                                   | >4% | 27,199,980 | >6% |
| Tier 1 Capital to Average Assets       | 71,935,895  | 11.94%                       | 24,108,211                                                   | >4% | 30,135,264 | >5% |

|  As of December 31, 2008          |        |   |        |   |        |    |
|----------------------------------------|-------------|--------|-------------|--------|-------------|---------|
| Company                                |        |   |        |   |        |    |
| Total Capital to Risk Weighted Assets  | $76,475,124 | 17.90% | $34,184,717 | >8% | N/A         | N/A     |
| Tier 1 Capital to Risk Weighted Assets | 72,790,360  | 17.03% | 17,092,359  | >4% | N/A         | N/A     |
| Tier 1 Capital to Average Assets       | 72,790,360  | 14.05% | 20,715,932  | >4% | N/A         | N/A     |
| Bank                                   |        |   |        |   |        |    |
| Total Capital to Risk Weighted Assets  | $75,316,536 | 17.67% | $34,096,080 | >8% | $42,620,100 | >10% |
| Tier 1 Capital to Risk Weighted Assets | 71,631,772  | 16.81% | 17,048,040  | >4% | 25,572,060  | >6%  |
| Tier 1 Capital to Average Assets       | 71,631,772  | 13.88% | 20,636,440  | >4% | 25,795,550  | >5%  |
|                                   |        |   |        |   |        |    |

----

|   | · | At least every six months, the Compensation Committee of the board of directors (the “Compensation Committee”) must discuss, evaluate and review with the Company’s senior risk officers the compensation plans for senior executive officers (“SEO”) and compensation plans for other employees and the risks such plans pose so that they do not encourage SEOs to take unnecessary and excessiverisks that threaten the value of the Company.  For this purpose, SEO is generally defined as the group of five individuals, including all of the Company’s named executive officers identified as such in the Company’s annual filings with the SEC; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | At least every six months, the Compensation Committee must discuss, evaluate, and review the employee compensation plans of the Company to ensure that those plans do not encourage the manipulation of reported earnings of the Company to enhance the compensation of any of the Company’s employees; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | At least once per fiscal year, the Compensation Committee shall provide a narrative description of how the SEO compensation plans do not encourage the SEOs to take unnecessary and excessive risks that threaten the value of the Company including how these SEO compensation plans do not encourage behavior focused on short-term results rather than long-term value creation; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Compensation Committee must certify the completion of the required reviews of the compensation plans; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | The Company must ensure that any bonus payment made to an SEO or the next 20 most highly compensated employees during the TARP period is subject to a provision for recovery or “clawback” by the Company if the bonus payment was based on materially inaccurate financial statements or any other materially inaccurate performance metric criteria; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company must prohibit any golden parachute payment to an SEO or any of the next five most highly compensated employees during the TARP period.  For this purpose, a golden parachute payment includes any payment for the departure from the Company for any reason, or any payment due to a change in control; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company must prohibit the payment or accrual of any bonus, retention or incentive payment during the TARP period to the Company’s most highly compensated employee.  Exceptions exist for certain types of long term restricted stock, as well as payments that are required pursuant to binding, unchanged agreements that were in place on February 11, 2009; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company is required to annually disclose any perquisites whose total value for the fiscal year exceeds $25,000 for the most highly compensated employee; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Compensation Committee must provide annually a narrative description of whether the Company, the board of directors, or the Compensation Committee has engaged a compensation consultant, and all types of services provided by such compensation consultant in the prior three years; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company is generally prohibited from providing (formally or informally) tax gross-ups of any kind to any of the SEOs and the next 20 most highly compensated employees; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The board of directors of the Company must (i) adopt an excessive or luxury expenditures policy, (ii) provide the policy to the Treasury and the recipient’s primary regulatory agency, and (iii) post the text of the policy on its own website; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Any proxy or consent or authorization for an annual or other meeting of the Company’s shareholders must permit a separate shareholder vote to approve the compensation of executives; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company’s principal executive officer and principal financial officer must certify as to compliance with the Interim Final Rule for each year in which the TARP obligations remain outstanding. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

|         Period |           |    Total Number of Shares Purchased |   |   |      Average Price Paid Per Share |   |   |  Total Number of Shares Purchased As Part of Publicly Announced Plan or Program |   |   | Maximum Number of Shares That May Yet be Purchased Under the Plan or Program |   |
|--------------------------------------------------------|----------------|----------------------------------------------------|--------|--------|------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------|--------|
|  Beginning                                        |  Ending   |                                               |   |   |                                                       |   |   |                                                                                 |   |   |                                                                         |   |   |
| April 1, 2009                                          | April 30, 2009 |                                               |   | -      |                                                       |   | $      | -                                                                                    |   |   |                                                                         | -      |   |   |   | 156,926 |   |
| May 1, 2009                                            | May 31, 2009   |                                               |   | -      |                                                       |   |   | -                                                                                    |   |   |                                                                         | -      |   |   |   | 156,926 |   |
| June 1, 2009                                           | June 30, 2009  |                                               |   | -      |                                                       |   |   | -                                                                                    |   |   |                                                                         | -      |   |   |   | 156,926 |   |
|  Total                                            |           |                                               | 0      |   |                                                       | $      | 0.00   |                                                                                 |   |   | 0                                                                            |   |   |   | 156,926 |   |

| (1) | The Company’s common stock repurchase program covers a maximum of 185,787 shares of common stock of the Company, representing 5% of the outstanding common stock of the Company on July 21, 2005, as adjusted for the annual stock dividends, including the 5% stock dividend paid on February 2, 2009 to holders of record as of the close of business on January 20, 2009. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 31.1                                                                                                                                                                                                                                                                                                                                                                         | *      | Certification of Robert F. Mangano, principal executive officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)                                                                                                                                  |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                                                                                                                                                                                                                |
| 31.2                                                                                                                                                                                                                                                                                                                                                                         | *      | Certification of Joseph M. Reardon, principal financial officer of the Company, pursuant to Securities Exchange Act Rule 13a-14(a)                                                                                                                                  |
|                                                                                                                                                                                                                                                                                                                                                                         |   |                                                                                                                                                                                                                                                                |
| 32                                                                                                                                                                                                                                                                                                                                                                           | *      | Certifications pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of The Sarbanes-Oxley Act of 2002, signed by Robert F. Mangano, principal executive officer of the Company, and Joseph M. Reardon, principal financial officer of the Company |
|                                                *           Filed herewith. |

----

|                  |   | 1ST CONSTITUTION BANCORP |
|-----------------------|--------|--------------------------|
|                  |   |                     |
|                  |   |                     |
| Date: August 13, 2009 |   | By:                 | /s/ ROBERT F. MANGANO |   |   |
|                  |   |                     | Robert F. Mangano |   |   |
|                  |   |                     | President and Chief Executive Officer |   |   |
|                  |   |                     | (Principal Executive Officer) |   |   |
|                  |   |                     |   |   |   |
|                  |   |                     |   |   |   |
| Date: August 13, 2009 |   | By:                 | /s/ JOSEPH M. REARDON |   |
|                  |   |                     | Joseph M. Reardon |   |   |
|                  |   |                     | Senior Vice President and Treasurer |   |   |
|                  |   |                     | (Principal Financial and Accounting Officer) |   |   |

----