----

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

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

|   | Registrant's      Telephone      Number:               (662)      563-9311 |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                                                    ------------------------------------------ |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | None                                                                                                    None |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | -----------------------------------------------------------------------------------------------------------------------                        --- |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Large      accelerated filer  [   ] | Accelerated      filer [X ] |   |   Non-accelerated      filer      [    ]                       Smaller reporting company [  ] |
|--------------------------------------------------------------|-----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Indicate      by check mark whether the registrant is a shell company (as defined in      Rule 12b-2 of the Act). |
|--------|-------------------------------------------------------------------------------------------------------------------|

|   | Yes      [   ]       No [ X      ] |
|--------|--------------------------------------------------------------------------------------|

|                Class | Outstanding at      December 31, 2007 |
|-------------------------------------------------------------------------------------------------|---------------------------------------|

| Common      stock ($5.00 par value) |              2,881,959      Shares |
|-------------------------------------|-----------------------------------------------------------------------------------------------------|

----

|                     |                                                                                                        |   | Page                                                                             |
|--------------------------|-------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|
| PART      I              |                                                                                                        |   |                                                                             |
| Item      1              | Business                                                                                                    |   | 2                                                                                |
| Item      1A             | Risk      Factors                                                                                           |   | 10                                                                               |
| Item      1B             | Unresolved      Staff Comments                                                                              |   | 15                                                                               |
| Item      2              | Properties                                                                                                  |   | 15                                                                               |
| Item      3              | Legal      Proceedings                                                                                      |   | 16                                                                               |
| Item      4              | Submission      of Matters to a Vote of Security Holders                                                    |   | 16                                                                               |
|                     |                                                                                                        |   |                                                                             |
| PART      II             |                                                                                                        |   |                                                                             |
|                     |                                                                                                        |   |                                                                             |
| Item      5              | Market      for the Registrant's Common Equity, Related Stockholder Matters      and                        |   |                                                                             |
|                     | Issuer      Purchases of Equity Securities                                                                  |   |                   16 |
| Item      6              | Selected      Financial Data                                                                                |   | 17                                                                               |
| Item      7              | Management's      Discussion and Analysis of Financial Condition and Results    of                          |   |                                                                             |
|                     | Operations                                                                                                  |   | 18                                                                               |
| Item      7A             | Quantitative      and Qualitative Disclosures about Market Risk                                             |   |                   40 |
| Item      8              | Financial      Statements and Supplementary Data                                                            |   |                   40 |
| Item      9              | Changes      in and Disagreements with Accountants on Accounting and Financial      Disclosure              |   |                   71 |
| Item      9A             | Controls      and Procedures                                                                                |   |              71 |
| Item      9B             | Other      Information                                                                                      |   |                   72 |
|                     |                                                                                                        |   |                                                                             |
| PART      III            |                                                                                                        |   |                                                                             |
|                     |                                                                                                        |   |                                                                             |
| Item      10             | Directors, Executive      Officers, and Corporate Governance                                      |   |                   72 |
| Item      11             | Executive      Compensation                                                                                 |   |                   72 |
| Item      12             | Security      Ownership of Certain Beneficial Owners,  Management and Related      Stockholder Matters |   |                   72 |
| Item      13             | Certain      Relationships, Related Transactions, and Director    Independence                              |   |                   73 |
| Item      14             | Principal      Accounting Fees and Services                                                                 |   |                   73 |
|                     |                                                                                                        |   |                                                                             |
| Part      IV             |                                                                                                        |   |                                                                             |
|                     |                                                                                                        |   |                                                                             |
| Item      15             | Exhibits      and Financial Statement Schedules                                                             |   |                  73       |
| Signatures               |                                                                                                        |   |                  74       |
| Index      to Exhibits   |                                                                                                        |   |                  75       |
| EX-3.(B)      (EX-3.(B)) |                                                                                                        |   |                                                                             |
| EX-21      (EX-21)       |                                                                                                        |   |                                                                             |
| EX-31.1      (EX-31.1)   |                                                                                                        |   |                                                                             |
| EX-31.2      (EX-31.2)   |                                                                                                        |   |                                                                             |
| EX-32.1      (EX-32.1)   |                                                                                                        |   |                                                                             |

----

|              |  POPULATION |
|-------------------|------------------|
|              |  2000       |  1990 |  1980 |  1970 |   |
|  DeSoto      |  107,199    |  67,910 |  53,930 |  35,885 |   |
|  Panola      |  34,274     |  29,996 |  28,164 |  26,829 |   |
|  Quitman     |  10,117     |  10,490 |  12,636 |  15,888 |   |
|  Tunica      |  9,277      |  8,164 |  9,652 |  11,854 |   |
|  Mississippi |  2,844,658  |  2,573,216 |  2,520,698 |  2,216,994 |   |
|              |             |   |   |   |

|                                                                                      |  PER      CAPITA INCOME |
|-------------------------------------------------------------------------------------------|------------------------------|
|                                                                                      |  2005                   |  2004 |  2003 |  2002 |  2001 |   |
|  DeSoto                                                                              |  $29,623                |  $29,318 |  $28,713 |  $28,251 |  $27,679 |   |
|  Panola                                                                              |  20,908                 |  20,017 |  19,173 |  18,331 |  18,238 |   |
|  Quitman                                                                             |  20,058                 |  19,482 |  17,933 |  15,256 |  16,820 |   |
|  Tunica                                                                              |  19,656                 |  19,567 |  19,325 |  16,823 |  18,444 |   |
|  Mississippi                                                                         |  25,051                 |  24,518 |  23,466 |  22,511 |  21,950 |   |
|  SOURCE:      United States Department of Commerce, Bureau of Economic      Analysis |

|                                                                         |  MEDIAN      AGE |
|------------------------------------------------------------------------------|-----------------------|
|                                                                         |  2000            |  1990 |
|  DeSoto                                                                 |  33.7            |  31.5 |
|  Panola                                                                 |  33.0            |  30.1 |
|  Quitman                                                                |  31.8            |  30.1 |
|  Tunica                                                                 |  30.6            |  25.3 |
|  SOURCE:      Center for Population Studies, University of  Mississippi |

----

| Loans                                           |   |
|-------------------------------------------------|--------|
| Major      Classifications                      |   |
|                                            |   |   |   |   |   |   |
|                                            |   |   |   |   |   |   |
|                                            |   | December      31, |   |
|                                            |   | 2007 |   |   | 2006 |   |
|                                            |   | (In      thousands) |   |
|                                            |   |   |   |   |   |   |
| Commercial,      financial and agricultural     |   | $ | 39,135 |   |   | $ | 38,349 |   |
| Real      estate - construction and development |   |   | 124,714 |   |   |   | 105,545 |   |
| Real      estate - mortgage                     |   |   | 151,998 |   |   |   | 153,525 |   |
| Installment      loans to individuals           |   |   | 24,624 |   |   |   | 26,858 |   |
| Other                                           |   |   | 2,718 |   |   |   | 2,381 |   |
|                                            |   |   | 343,189 |   |   |   | 326,658 |   |
| Less      allowance for loan losses             |   |   | (4,729 | ) |   |   | (4,334 | ) |
|                                            |   | $ | 338,460 |   |   | $ | 322,324 |   |

----

----

----

----

----

|   | • | Repeals      historical restrictions on, and eliminates many federal and state law      barriers to, affiliations among banks, securities firms, insurance      companies, and other financial service  providers; |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Provides      a uniform framework for the functional regulation of the activities of      banks, savings institutions, and their holding  companies; |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Broadens      the activities that may be conducted by national banks, banking      subsidiaries of bank holding companies, and their financial      subsidiaries; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Provides      an enhanced framework for protecting the privacy of consumer      information; |
|--------|---------|----------------------------------------------------------------------------------------------|

|   | • | Adopts      a number of provisions related to the capitalization, membership,      corporate governance, and other measures designed to modernize the Federal      Home Loan Bank system; |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Modifies      the laws governing the implementation of the Community Reinvestment Act      ("CRA"); and |
|--------|---------|---------------------------------------------------------------------------------------------------------|

|   | • | Addresses      a variety of other legal and regulatory issues affecting both day-to-day      operations and long-term activities of financial    institutions. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                     |   | Corporation |   | Bank   |   |         |
|--------------------------|--------|-------------|--------|--------|--------|--------------|
| Risk-Based Capital Ratio |   | Ratio       |   | Ratio  |   | Requirements |
| Total      Capital       |   | 15.30%      |   | 14.67% |   | 8.00%        |
| Tier      1 Capital      |   | 14.05%      |   | 13.42% |   | 4.00%        |
| Leverage      Capital    |   | 11.06%      |   | 10.55% |   | 3.00%        |

----

----

----

----

----

----

| Name of Office           |   | Location/Telephone Number             |   | Banking Services Offered       |
|--------------------------|--------|---------------------------------------|--------|--------------------------------|
|                     |   |                                  |   |                           |
| Main      Office         |   | 295      Highway 6 West               |   | Loans,      Deposits, Cash,    |
|                     |   | Batesville,      Mississippi 38606;   |   | Safe      Deposit Boxes, ATM,  |
|                     |   | 662-563-9311                          |   | Drive-thru                     |
|                     |   |                                  |   |                           |
| Express      Branch      |   | 130      Highway 51 North             |   | Drive-thru,      Cash          |
|                     |   | Batesville,      Mississippi 38606;   |   |                           |
|                     |   | 662-563-9311                          |   |                           |
|                     |   |                                  |   |                           |
| Marks      Branch        |   | 1651      Charlie Pride Highway South |   | Loans,      Deposits, Cash,    |
|                     |   | Marks,      Mississippi 38646;        |   | Safe      Deposit Boxes,       |
|                     |   | 662-326-8053                          |   | Drive-thru                     |
|                     |   |                                  |   |                           |
|                     |   |                                  |   |                           |
| Power      Drive Branch  |   | 230      Power Drive                  |   | Loans,      Deposits, ATM      |
|                     |   | Batesville,      Mississippi 38606;   |   | Safe      Deposit Boxes,       |
|                     |   | 662-563-9311                          |   | Cash,      Drive-thru          |
|                     |   |                                  |   |                           |
| Sardis      Branch       |   | 201      South Main                   |   | Loans,      Deposits, Cash     |
|                     |   | Sardis,      Mississippi 38666;       |   | Safe      Deposit Boxes,       |
|                     |   | 662-487-1661                          |   | Drive-thru                     |
|                     |   |                                  |   |                           |
| Olive      Branch Branch |   | 6659      Highway 305                 |   | Loans,      Deposits, Cash,    |
|                     |   | Olive      Branch, Mississippi 38654; |   | Safe      Deposit Boxes, ATM,  |
|                     |   | 662-895-1994                          |   | Drive-thru                     |
|                     |   |                                  |   |                           |
| Como      Branch         |   | 227      Main Street                  |   | Loans,      Deposits, Cash,    |
|                     |   | Como,      Mississippi 38619;         |   | Safe      Deposit Boxes,       |
|                     |   | 662-526-5191                          |   | Drive-thru,      ATM           |
|                     |   |                                  |   |                           |
| Crenshaw      Branch     |   | 729      Broad Street                 |   | Loans,      Deposits, Cash,    |
|                     |   | Crenshaw,      Mississippi 38621;     |   | Safe      Deposit Boxes,       |
|                     |   | 662-382-5215                          |   | Drive-thru                     |
|                     |   |                                  |   |                           |
| Tunica      Branch       |   | 1262      East Edwards Street         |   | Loans,      Deposits, Drive-   |
|                     |   | Tunica,      Mississippi 38676;       |   | thru,      Safe Deposit Boxes, |
|                     |   | 662-363-2311                          |   | ATM,      Cash                 |

|                              |   |                                             |   |                                 |
|-----------------------------------|--------|--------------------------------------------------|--------|--------------------------------------|
| Robinsonville      Branch         |   | 11490      Old Highway 61 North                  |   | Loans,      Deposits, Cash,          |
|                              |   | Robinsonville,      Mississippi 38664;           |   | Safe      Deposit Boxes,             |
|                              |   | 662-363-5015                                     |   | ATM,      Drive-thru                 |
|                              |   |                                             |   |                                 |
| Hernando      Branch              |   | 985      East Commerce Street                    |   | Loans,      Deposits, Cash,          |
|                              |   | Hernando,      Mississippi 38632;                |   | Safe      Deposit Boxes,             |
|                              |   | 662-449-4115                                     |   | ATM,      Drive-thru                 |
|                              |   |                                             |   |                                 |
| Pope      Branch                  |   | 7024      Highway 51 North                       |   | Deposits,      Cash, ATM,            |
|                              |   | Pope,      Mississippi 38658;                    |   | Drive-thru                           |
|                              |   | 662-578-5650                                     |   |                                 |
|                              |   |                                             |   |                                 |
| Southaven      Branch             |   | 3035      Church Road East                       |   | Loans,      Deposits, Cash,          |
|                              |   | Southaven,      MS  38672;             |   | Safe      Deposit Boxes,             |
|                              |   | 662-893-3243                                     |   | ATM,      Drive-thru                 |
|                              |   |                                             |   |                                 |
| Sardis      Express Branch        |   | 610      East Lee Street                         |   | Deposits,      Cash, ATM             |
|                              |   | Sardis,      Mississippi  38666;       |   | Drive-thru                           |
|                              |   | 662-487-1895                                     |   |                                 |
|                              |   |                                             |   |                                 |
| Goodman      Road Branch          |   | 5028      Goodman Road                           |   | Loans,      Deposits, Cash,          |
|                              |   | Olive      Branch, Mississippi  38654; |   | Safe      Deposit Boxes,             |
|                              |   | 662-890-1043                                     |   | ATM,      Drive-thru                 |
|                              |   |                                             |   |                                 |
| Trust      and Financial Services |   | 275      Highway 6 West                          |   | Investment      Planning &       |
| Branch                            |   | Batesville,      Mississippi 38606;              |   | Management,      Personal Trusts,    |
|                              |   | 662-563-9311                                     |   | Corporate      Trusts, Pension & |
|                              |   |                                             |   | Profit-Sharing      Plans, IRAs,     |
|                              |   |                                             |   | Paying      Agent Accounts           |

----

| plaintiffs      ask for compensatory damages in the amount determined to be fair by the      jury.  At December 31, 2007, the legal proceedings had not been      resolved.  However, an analysis by legal counsel anticipates      possible awards to the claimants to be within the insurance coverage with      no potential loss to the Bank and closure of the case is dependent on      forthcoming medical documentation on status of  claimants. |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ITEM      5. | MARKET      FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER      MATTERS |
|--------------|------------------------------------------------------------------------------------|

----

|   Security      Capital Corporation                                                                           |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|
| Table      1 - Five Year Financial Summary                                                                              |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                    |   | 12/31/2007 |   |   | 12/31/2006 |   |   | 12/31/2005 |   |   | 12/31/2004 |   |   | 12/31/2003 |   |
|                                                                                                                    |   | (in      thousands except per share data and Other Financial Data) |   |
| Income      Statement Data:                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Income                                                                                                    |   |   | 34,133 |   |   |   | 30,586 |   |   |   | 24,458 |   |   |   | 19,092 |   |   |   | 17,009 |   |
| Interest      Expense                                                                                                   |   |   | 13,699 |   |   |   | 11,523 |   |   |   | 6,907 |   |   |   | 4,139 |   |   |   | 3,955 |   |
| Net      Interest Income                                                                                                |   |   | 20,434 |   |   |   | 19,063 |   |   |   | 17,551 |   |   |   | 14,953 |   |   |   | 13,054 |   |
| Provision      for Loan Losses                                                                                          |   |   | 1,155 |   |   |   | 965 |   |   |   | 1,440 |   |   |   | 637 |   |   |   | 546 |   |
| Net      Interest Income After Provision                                                                                |   |   | 19,279 |   |   |   | 18,098 |   |   |   | 16,111 |   |   |   | 14,316 |   |   |   | 12,508 |   |
| Noninterest      Income                                                                                                 |   |   | 6,849 |   |   |   | 6,926 |   |   |   | 6,151 |   |   |   | 5,657 |   |   |   | 5,666 |   |
| Noninterest      Expenses                                                                                               |   |   | 15,538 |   |   |   | 14,435 |   |   |   | 12,948 |   |   |   | 11,410 |   |   |   | 10,618 |   |
| Income      Before Income Taxes                                                                                         |   |   | 10,590 |   |   |   | 10,589 |   |   |   | 9,314 |   |   |   | 8,563 |   |   |   | 7,556 |   |
| Income      Tax Expense                                                                                                 |   |   | 3,155 |   |   |   | 3,349 |   |   |   | 2,707 |   |   |   | 2,431 |   |   |   | 2,039 |   |
| NET      INCOME                                                                                                         |   |   | 7,435 |   |   |   | 7,240 |   |   |   | 6,607 |   |   |   | 6,132 |   |   |   | 5,517 |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per      Share Data:                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Income*                                                                                                        |   |   | 2.58 |   |   |   | 2.51 |   |   |   | 2.29 |   |   |   | 2.13 |   |   |   | 1.92 |   |
| Cash      Dividends*                                                                                                    |   |   | 1.00 |   |   |   | 0.95 |   |   |   | 0.91 |   |   |   | 0.86 |   |   |   | 0.78 |   |
| Book      Value*                                                                                                        |   |   | 19.76 |   |   |   | 18.05 |   |   |   | 16.39 |   |   |   | 15.25 |   |   |   | 14.22 |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Ratios:                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return      on Average Assets                                                                                           |   |   | 1.54 |   |   |   | 1.58 |   |   |   | 1.57 |   |   |   | 1.65 |   |   |   | 1.66 |   |
| Return      on Equity                                                                                                   |   |   | 13.44 |   |   |   | 14.36 |   |   |   | 14.16 |   |   |   | 14.22 |   |   |   | 13.73 |   |
| Loans      to Deposits                                                                                                  |   |   | 88.28 |   |   |   | 89.08 |   |   |   | 83.98 |   |   |   | 70.29 |   |   |   | 70.87 |   |
| Loans      to Total Assets                                                                                              |   |   | 72.02 |   |   |   | 71.27 |   |   |   | 68.36 |   |   |   | 60.06 |   |   |   | 60.08 |   |
| Equity      Capital to Total Assets                                                                                     |   |   | 11.95 |   |   |   | 11.34 |   |   |   | 10.83 |   |   |   | 11.24 |   |   |   | 12.01 |   |
| Average      Equity to Average Assets                                                                                   |   |   | 11.43 |   |   |   | 10.99 |   |   |   | 11.12 |   |   |   | 11.61 |   |   |   | 12.12 |   |
| Dividend      Payout Ratio                                                                                              |   |   | 38.76 |   |   |   | 37.90 |   |   |   | 39.52 |   |   |   | 40.52 |   |   |   | 40.66 |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Financial Data:                                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      Dividends Declared                                                                                            |   |   | 2,811,809 |   |   |   | 2,743,770 |   |   |   | 2,611,400 |   |   |   | 2,484,937 |   |   |   | 2,243,187 |   |
| Weighted      Average                                                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding      Common Shares                                                                                          |   |   | 2,881,934 |   |   |   | 2,880,487 |   |   |   | 2,879,059 |   |   |   | 2,876,613 |   |   |   | 2,871,747 |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *      The per share information is based upon the retroactive effect of the      stock dividends for the period.       |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| The      per share data being reflected was derived using the weighted average      number of outstanding shares at     |   |
| December      31, 2007 as the denominator. (The weighted average number of      outstanding shares at December     |   |
| 31,      2007 was 2,881,934.) For example, the cash dividends per share was      determined by dividing the amount |   |
| of      dividends by 2,881,934.                                                                                         |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      Sheet Data:                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Assets                                                                                                       |   |   | 476,530 |   |   |   | 458,329 |   |   |   | 435,876 |   |   |   | 390,274 |   |   |   | 340,253 |   |
| Earning      Assets                                                                                                     |   |   | 425,879 |   |   |   | 398,824 |   |   |   | 381,794 |   |   |   | 349,276 |   |   |   | 304,056 |   |
| Investment      Securities AFS                                                                                          |   |   | 66,156 |   |   |   | 61,028 |   |   |   | 78,949 |   |   |   | 96,669 |   |   |   | 76,320 |   |
| Investment      Securities HTM                                                                                          |   |   | 7,235 |   |   |   | 7,850 |   |   |   | 2,047 |   |   |   | 2,050 |   |   |   | 2,053 |   |
| Other      Securities                                                                                                   |   |   | 2,028 |   |   |   | 2,250 |   |   |   | 1,456 |   |   |   | 1,259 |   |   |   | 991 |   |
| Loans      - Net                                                                                                        |   |   | 338,460 |   |   |   | 322,324 |   |   |   | 294,046 |   |   |   | 230,805 |   |   |   | 200,759 |   |
| Allowance      for Loan Losses                                                                                          |   |   | 4,729 |   |   |   | 4,334 |   |   |   | 3,899 |   |   |   | 3,598 |   |   |   | 3,665 |   |
| Total      Deposits                                                                                                     |   |   | 388,733 |   |   |   | 366,699 |   |   |   | 354,766 |   |   |   | 333,458 |   |   |   | 288,442 |   |
| Savings      Deposits                                                                                                   |   |   | 26,897 |   |   |   | 30,553 |   |   |   | 30,349 |   |   |   | 28,416 |   |   |   | 25,869 |   |
| Time      Deposits                                                                                                      |   |   | 175,805 |   |   |   | 156,692 |   |   |   | 129,057 |   |   |   | 116,064 |   |   |   | 110,914 |   |
| Long      Term Borrowings                                                                                               |   |   | 22,082 |   |   |   | 11,937 |   |   |   | 12,991 |   |   |   | 8,634 |   |   |   | 4,738 |   |
| Shareholders'      Equity                                                                                               |   |   | 56,939 |   |   |   | 51,984 |   |   |   | 47,187 |   |   |   | 43,870 |   |   |   | 40,848 |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      Balances:                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Assets                                                                                                       |   |   | 472,756 |   |   |   | 450,822 |   |   |   | 419,569 |   |   |   | 371,424 |   |   |   | 331,612 |   |
| Earning      Assets                                                                                                     |   |   | 420,609 |   |   |   | 397,929 |   |   |   | 371,856 |   |   |   | 333,561 |   |   |   | 296,651 |   |
| Securities                                                                                                              |   |   | 72,399 |   |   |   | 78,309 |   |   |   | 93,077 |   |   |   | 97,514 |   |   |   | 87,954 |   |
| Total      Loans                                                                                                        |   |   | 340,689 |   |   |   | 315,468 |   |   |   | 271,323 |   |   |   | 221,309 |   |   |   | 197,814 |   |
| Allowance      for Loan Losses                                                                                          |   |   | 4,612 |   |   |   | 4,281 |   |   |   | 3,727 |   |   |   | 3,850 |   |   |   | 3,667 |   |
| Savings      Deposits                                                                                                   |   |   | 29,932 |   |   |   | 31,363 |   |   |   | 29,420 |   |   |   | 26,663 |   |   |   | 23,006 |   |
| Time      Deposits                                                                                                      |   |   | 168,032 |   |   |   | 144,549 |   |   |   | 117,127 |   |   |   | 114,125 |   |   |   | 114,998 |   |
| Long-Term      Borrowings                                                                                               |   |   | 16,291 |   |   |   | 12,450 |   |   |   | 11,766 |   |   |   | 7,695 |   |   |   | 3,197 |   |
| Shareholder's      Equity                                                                                               |   |   | 52,990 |   |   |   | 50,414 |   |   |   | 46,665 |   |   |   | 43,110 |   |   |   | 40,183 |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Data:                                                                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number      of Employees                                                                                                |   |   | 190 |   |   |   | 190 |   |   |   | 182 |   |   |   | 162 |   |   |   | 157 |   |
|                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| ITEM      7. | MANAGEMENT’S      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF      OPERATIONS |
|--------------|-------------------------------------------------------------------------------------------------------|

----

| Security      Capital Corporation                                    |   |
|----------------------------------------------------------------------|--------|
| Table      2 - Average Balances; Interest Earned and Interest Yields |   |
| (in      thousands)                                                  |   |
|                                                                 |   | Years      ended December 31, |   |
|                                                                 |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                 |   | Average |   |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
|                                                                 |   | Balance |   |   | Interest |   |   | Yields |   |   | Balance |   |   | Interest |   |   | Yields |   |   | Balance |   |   | Interest |   |   | Yields |   |
| Assets:                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Earning Assets:                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities                                                           |   |   | 72,654 |   |   |   | 3,487 |   |   |   | 4.80 |   |   |   | 78,986 |   |   |   | 3,386 |   |   |   | 4.29 |   |   |   | 92,679 |   |   |   | 3,687 |   |   |   | 3.98 |   |
| BV      to MV                                                        |   |   | -255 |   |   |   |   |   |   |   |   |   |   |   | -677 |   |   |   |   |   |   |   |   |   |   |   | 398 |   |   |   |   |   |   |   |   |   |
| Total      Securities                                                |   |   | 72,399 |   |   |   | 3,487 |   |   |   | 4.82 |   |   |   | 78,309 |   |   |   | 3,386 |   |   |   | 4.32 |   |   |   | 93,077 |   |   |   | 3,687 |   |   |   | 3.96 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commerical/Agricultural                                              |   |   | 265,654 |   |   |   | 22,496 |   |   |   | 8.47 |   |   |   | 240,725 |   |   |   | 19,759 |   |   |   | 8.21 |   |   |   | 197,627 |   |   |   | 13,888 |   |   |   | 7.03 |   |
| Consumer/Installment                                                 |   |   | 69,374 |   |   |   | 6,218 |   |   |   | 8.96 |   |   |   | 69,092 |   |   |   | 5,826 |   |   |   | 8.43 |   |   |   | 68,682 |   |   |   | 5,275 |   |   |   | 7.68 |   |
| Mortgage                                                             |   |   | 338 |   |   |   | 34 |   |   |   | 10.06 |   |   |   | 529 |   |   |   | 44 |   |   |   | 8.32 |   |   |   | 859 |   |   |   | 70 |   |   |   | 8.15 |   |
| Other      Personal Loans                                            |   |   | 5,323 |   |   |   | 394 |   |   |   | 7.40 |   |   |   | 5,122 |   |   |   | 278 |   |   |   | 5.43 |   |   |   | 4,155 |   |   |   | 278 |   |   |   | 6.69 |   |
| Total      Loans                                                     |   |   | 340,689 |   |   |   | 29,142 |   |   |   | 8.55 |   |   |   | 315,468 |   |   |   | 25,907 |   |   |   | 8.21 |   |   |   | 271,323 |   |   |   | 19,511 |   |   |   | 7.19 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Investments                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CDs      with Other Banks                                            |   |   | 198 |   |   |   | 8 |   |   |   | 4.04 |   |   |   | 374 |   |   |   | 15 |   |   |   | 4.01 |   |   |   | 564 |   |   |   | 19 |   |   |   | 3.37 |   |
| Federal      Funds Sold                                              |   |   | 2,903 |   |   |   | 139 |   |   |   | 4.79 |   |   |   | 1,836 |   |   |   | 88 |   |   |   | 4.79 |   |   |   | 3,567 |   |   |   | 106 |   |   |   | 2.97 |   |
| FHLB      Account/Bank Accounts                                      |   |   | 4,420 |   |   |   | 205 |   |   |   | 4.64 |   |   |   | 1,942 |   |   |   | 84 |   |   |   | 4.33 |   |   |   | 3,325 |   |   |   | 76 |   |   |   | 2.29 |   |
| Total      Other                                                     |   |   | 7,521 |   |   |   | 352 |   |   |   | 4.68 |   |   |   | 4,152 |   |   |   | 187 |   |   |   | 4.50 |   |   |   | 7,456 |   |   |   | 201 |   |   |   | 2.70 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Earning Assets                                            |   |   | 420,609 |   |   |   | 32,981 |   |   |   | 7.84 |   |   |   | 397,929 |   |   |   | 29,480 |   |   |   | 7.41 |   |   |   | 371,856 |   |   |   | 23,399 |   |   |   | 6.29 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest Earning Assets:                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      for Loan Losses                                       |   |   | -4,612 |   |   |   |   |   |   |   |   |   |   |   | -4,281 |   |   |   |   |   |   |   |   |   |   |   | -3,727 |   |   |   |   |   |   |   |   |   |
| Fixed      Assets                                                    |   |   | 20,834 |   |   |   |   |   |   |   |   |   |   |   | 18,848 |   |   |   |   |   |   |   |   |   |   |   | 16,570 |   |   |   |   |   |   |   |   |   |
| Other      Assets                                                    |   |   | 18,912 |   |   |   |   |   |   |   |   |   |   |   | 23,404 |   |   |   |   |   |   |   |   |   |   |   | 19,250 |   |   |   |   |   |   |   |   |   |
| Cash      and Due Froms                                              |   |   | 17,013 |   |   |   |   |   |   |   |   |   |   |   | 14,922 |   |   |   |   |   |   |   |   |   |   |   | 15,620 |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Noninterest Earning Assets                                |   |   | 52,147 |   |   |   |   |   |   |   |   |   |   |   | 52,893 |   |   |   |   |   |   |   |   |   |   |   | 47,713 |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Assets                                                    |   |   | 472,756 |   |   |   |   |   |   |   |   |   |   |   | 450,822 |   |   |   |   |   |   |   |   |   |   |   | 419,569 |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      & Shareholder Equity                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-BearingLiabilities                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits:                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing      DDA                                            |   |   | 135,369 |   |   |   | 3,732 |   |   |   | 2.76 |   |   |   | 132,447 |   |   |   | 3,511 |   |   |   | 2.65 |   |   |   | 145,036 |   |   |   | 2,461 |   |   |   | 1.70 |   |
| Savings      Deposits                                                |   |   | 29,932 |   |   |   | 456 |   |   |   | 1.52 |   |   |   | 31,363 |   |   |   | 470 |   |   |   | 1.50 |   |   |   | 29,420 |   |   |   | 348 |   |   |   | 1.18 |   |
| Time      Deposits                                                   |   |   | 168,032 |   |   |   | 8,171 |   |   |   | 4.86 |   |   |   | 144,549 |   |   |   | 6,169 |   |   |   | 4.27 |   |   |   | 117,127 |   |   |   | 3,355 |   |   |   | 2.86 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Interest-Bearing Deposits                                 |   |   | 333,333 |   |   |   | 12,359 |   |   |   | 3.71 |   |   |   | 308,359 |   |   |   | 10,150 |   |   |   | 3.29 |   |   |   | 291,583 |   |   |   | 6,164 |   |   |   | 2.11 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Borrowed Funds                                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-Term      Borrowings                                           |   |   | 3,252 |   |   |   | 181 |   |   |   | 5.57 |   |   |   | 3,899 |   |   |   | 216 |   |   |   | 5.54 |   |   |   | 6,272 |   |   |   | 230 |   |   |   | 3.67 |   |
| FHLB      Advances- Short/Long-Term                                  |   |   | 20,458 |   |   |   | 1,159 |   |   |   | 5.67 |   |   |   | 23,334 |   |   |   | 1,133 |   |   |   | 4.86 |   |   |   | 11,766 |   |   |   | 506 |   |   |   | 4.30 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Borrowed Funds                                            |   |   | 23,710 |   |   |   | 1,340 |   |   |   | 5.65 |   |   |   | 27,233 |   |   |   | 1,349 |   |   |   | 4.95 |   |   |   | 18,038 |   |   |   | 736 |   |   |   | 4.08 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Interest-Bearing Liabilities                              |   |   | 357,043 |   |   |   | 13,699 |   |   |   | 3.84 |   |   |   | 335,592 |   |   |   | 11,499 |   |   |   | 3.43 |   |   |   | 309,621 |   |   |   | 6,900 |   |   |   | 2.23 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-Interest-Bearing      Liabilities                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-Interest-Bearing      Deposits                                   |   |   | 57,067 |   |   |   |   |   |   |   |   |   |   |   | 58,877 |   |   |   |   |   |   |   |   |   |   |   | 58,199 |   |   |   |   |   |   |   |   |   |
| Other      Liabilities                                               |   |   | 5,656 |   |   |   |   |   |   |   |   |   |   |   | 5,939 |   |   |   |   |   |   |   |   |   |   |   | 5,084 |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Shareholders'      Equity                                            |   |   | 52,990 |   |   |   |   |   |   |   |   |   |   |   | 50,414 |   |   |   |   |   |   |   |   |   |   |   | 46,665 |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Liabilities & Shareholder Equity                      |   |   | 472,756 |   |   |   |   |   |   |   |   |   |   |   | 450,822 |   |   |   |   |   |   |   |   |   |   |   | 419,569 |   |   |   |   |   |   |   |   |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Interest Income &                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Rate Spread                                            |   |   |   |   |   |   | 19,282 |   |   |   | 4.00 |   |   |   |   |   |   |   | 17,981 |   |   |   | 3.98 |   |   |   |   |   |   |   | 16,499 |   |   |   | 4.06 |   |
|                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Interest Margin                                             |   |   |   |   |   |   |   |   |   |   | 4.58 |   |   |   |   |   |   |   |   |   |   |   | 4.52 |   |   |   |   |   |   |   |   |   |   |   | 4.44 |   |

----

| Table      3 - Net Interest Earning Assets |   |
|--------------------------------------------|--------|
| (in      thousands)                        |   |
|                                       |   |   |   |   |   |   |   |   |   |
|                                       |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                       |   |   |   |   |   |   |   |   |   |
| Average      Interest                      |   |   |   |   |   |   |   |   |   |
|    Earning      Assets      |   |   | 420,609 |   |   |   | 397,929 |   |   |   | 371,856 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      Interest                      |   |   |   |   |   |   |   |   |   |   |   |   |
|    Bearing      Liabilities |   |   | 357,043 |   |   |   | 335,592 |   |   |   | 309,621 |   |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                                        |   |   | 63,566 |   |   |   | 62,337 |   |   |   | 62,235 |   |

----

|  Table      3A - Volume/Rate Analysis                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
| (in      thousands)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | 2007      Change from 2006 |   |   | 2006      Change from 2005 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | Volume |   |   | Rate |   |   | Total |   |   | Volume |   |   | Rate |   |   | Total |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST      INCOME:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 2,202 |   |   |   | 1,073 |   |   |   | 3,275 |   |   |   | 3,679 |   |   |   | 2,767 |   |   |   | 6,446 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment      Securities                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | -285 |   |   |   | 392 |   |   |   | 107 |   |   |   | -638 |   |   |   | 335 |   |   |   | -303 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 158 |   |   |   | 7 |   |   |   | 165 |   |   |   | -149 |   |   |   | 134 |   |   |   | -15 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Interest Income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 2,075 |   |   |   | 1,472 |   |   |   | 3,547 |   |   |   | 2,892 |   |   |   | 3,236 |   |   |   | 6,128 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST      EXPENSE:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Bearing                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      Deposit Accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | 81 |   |   |   | 146 |   |   |   | 227 |   |   |   | -334 |   |   |   | 1,378 |   |   |   | 1,044 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings      Deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |   | -22 |   |   |   | 6 |   |   |   | -16 |   |   |   | 29 |   |   |   | 94 |   |   |   | 123 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Time      Deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |   | 1,141 |   |   |   | 832 |   |   |   | 1,973 |   |   |   | 1,186 |   |   |   | 1,651 |   |   |   | 2,837 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Borrowed      Funds                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | -199 |   |   |   | 191 |   |   |   | -8 |   |   |   | 455 |   |   |   | 157 |   |   |   | 612 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Interest Expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |   | 1,001 |   |   |   | 1,175 |   |   |   | 2,176 |   |   |   | 1,336 |   |   |   | 3,280 |   |   |   | 4,616 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NET      INTEREST INCOME                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |   | 1,074 |   |   |   | 297 |   |   |   | 1,371 |   |   |   | 1,556 |   |   |   | -44 |   |   |   | 1,512 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |
| Non-Interest      Income and Non-Interest Expense Non-interest      expense increased by 11.48% from 2005 to 2006 and increased by 7.64% from      2006 to 2007, primarily because of increases in salaries and employee      benefits. Increases in non-interest expense is supported by the decision      to provide a new state of the art facility for the Robinsonville      Branch. The increase also signifies the move by Security Capital      Corporation into an additional location in Desoto County that required      expenditures for banking facilities as well as training employees to      perform the operational procedures. Security Capital Corporation, in      providing state of the art buildings in its Desoto County locations, has      addressed the needs of its staff and of the increase in business as well      as presented an attractive banking establishment for its      customers. With the establishment of a new facility, other costs are      involved such as the purchase of new equipment and the increase in the      maintenance costs of the equipment. In addition to the increase in      employees, salaries and employee benefits normally increase in a range      from 3% to 7% dependent on the profits and the attainment of performance      goals. |   |

----

| Table      4 - Non-Interest Income and Expense |   |
|------------------------------------------------|--------|
| (in      thousands)                            |   |
|                                           |   |   |   |   |   |   |   |   |   |
|                                           |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Non-Interest      Income:                      |   |   |   |   |   |   |   |   |   |
| Trust      Department Income                   |   |   | 1,068 |   |   |   | 1,038 |   |   |   | 978 |   |
| Service      Charges: Deposits                 |   |   | 5,152 |   |   |   | 4,592 |   |   |   | 4,333 |   |
| Other      Operating Income                    |   |   | 629 |   |   |   | 1,296 |   |   |   | 840 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Non-Interest Income                 |   |   | 6,849 |   |   |   | 6,926 |   |   |   | 6,151 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-Interest      Expense:                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      & Employee Benefits          |   |   | 10,141 |   |   |   | 9,276 |   |   |   | 8,588 |   |
| Occupancy      Expense                         |   |   | 2,302 |   |   |   | 1,888 |   |   |   | 1,553 |   |
| Other      Operating Expense                   |   |   | 3,095 |   |   |   | 3,271 |   |   |   | 2,807 |   |
|                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Non-Interest Expense                |   |   | 15,538 |   |   |   | 14,435 |   |   |   | 12,948 |   |

----

----

| Table      5 - Loans by Type                      |   |
|---------------------------------------------------|--------|
| (in      thousands)                               |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
| Commercial,      Financial & Agricultural     |   |   | 39,135 |   |   |   | 38,349 |   |   |   | 30,826 |   |   |   | 28,077 |   |   |   | 32,878 |   |
| Real      Estate - Construction & Development |   |   | 124,714 |   |   |   | 105,545 |   |   |   | 86,404 |   |   |   | 49,189 |   |   |   | 37,116 |   |
| Real      Estate - Mortgage                       |   |   | 151,998 |   |   |   | 153,525 |   |   |   | 149,602 |   |   |   | 124,911 |   |   |   | 103,348 |   |
| Installment      Loans to Individuals             |   |   | 24,624 |   |   |   | 26,858 |   |   |   | 28,833 |   |   |   | 29,898 |   |   |   | 28,529 |   |
| Other                                             |   |   | 2,718 |   |   |   | 2,381 |   |   |   | 2,280 |   |   |   | 2,328 |   |   |   | 2,553 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Loans                                  |   |   | 343,189 |   |   |   | 326,658 |   |   |   | 297,945 |   |   |   | 234,403 |   |   |   | 204,424 |   |

| Table      6 - Loan Liquidity                    |   |
|--------------------------------------------------|--------|
| (in      thousands)                              |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   | Within |   |   | 1 thr 5 |   |   | Over |   |   |   |   |
| Loans      That Will Reprice or Will Mature:     |   | 1 Year |   |   | Years |   |   | 5 Years |   |   | Total |   |
| Allocation      by Maturity Date:                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial,      financial and agriculture loans |   |   | 28,343 |   |   |   | 10,247 |   |   |   | 545 |   |   |   | 39,135 |   |
| Construction      and development                |   |   | 112,462 |   |   |   | 12,112 |   |   |   | 140 |   |   |   | 124,714 |   |
|                                             |   |   | 140,805 |   |   |   | 22,359 |   |   |   | 685 |   |   |   | 163,849 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Repricing      frequency of loan types above:    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fixed      Rate                                  |   |   | 42,915 |   |   |   | 15,546 |   |   |   | 348 |   |   |   | 58,809 |   |
| Variable      Rate                               |   |   | 97,890 |   |   |   | 6,813 |   |   |   | 337 |   |   |   | 105,040 |   |
|                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                            |   |   | 140,805 |   |   |   | 22,359 |   |   |   | 685 |   |   |   | 163,849 |   |
| Percent      of Total                            |   |   | 85.94 | % |   |   | 13.65 | % |   |   | 0.41 | % |   |   | 100.00 | % |

----

| Security      Capital Corporation                       |   |
|---------------------------------------------------------|--------|
| Table      7 - Allowance for Loan Losses           |   |
| (in      thousands)                                     |   |
|                                                    |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
| Balance      at                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Beginning      of Year                |   |   | 4,334 |   |   |   | 3,899 |   |   |   | 3,598 |   |   |   | 3,665 |   |   |   | 3,455 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      Charged-Off                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial,      Financial & Agricultural           |   |   | 92 |   |   |   | 105 |   |   |   | 250 |   |   |   | 242 |   |   |   | 146 |   |
| Real      Estate - Construction & Development       |   |   | 202 |   |   |   | 35 |   |   |   | 20 |   |   |   | 6 |   |   |   | 4 |   |
| Real      Estate - Mortgage                             |   |   | 76 |   |   |   | 44 |   |   |   | 313 |   |   |   | 225 |   |   |   | 69 |   |
| Installment      Loans to Individuals                   |   |   | 2,025 |   |   |   | 1,017 |   |   |   | 971 |   |   |   | 655 |   |   |   | 167 |   |
| Other                                                   |   |   | 5 |   |   |   | 13 |   |   |   | 63 |   |   |   | - |   |   |   | 324 |   |
| Total      Charge-Offs                                  |   |   | 2,400 |   |   |   | 1,214 |   |   |   | 1,617 |   |   |   | 1,128 |   |   |   | 710 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-Off      Recovered                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial,      Financial & Agricultural           |   |   | 10 |   |   |   | 8 |   |   |   | 23 |   |   |   | 2 |   |   |   | 36 |   |
| Real      Estate - Construction & Development       |   |   | 11 |   |   |   | 4 |   |   |   | - |   |   |   | - |   |   |   | 26 |   |
| Real      Estate - Mortgage                             |   |   | 27 |   |   |   | 21 |   |   |   | 49 |   |   |   | 24 |   |   |   | - |   |
| Installment      Loans to Individuals                   |   |   | 1,591 |   |   |   | 648 |   |   |   | 383 |   |   |   | 398 |   |   |   | 104 |   |
| Other                                                   |   |   | 1 |   |   |   | 3 |   |   |   | 23 |   |   |   | - |   |   |   | 208 |   |
| Total      Recoveries                                   |   |   | 1,640 |   |   |   | 684 |   |   |   | 478 |   |   |   | 424 |   |   |   | 374 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Charge-Offs                                    |   |   | 760 |   |   |   | 530 |   |   |   | 1,139 |   |   |   | 704 |   |   |   | 336 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Current      Year Provision                             |   |   | 1,155 |   |   |   | 965 |   |   |   | 1,440 |   |   |   | 637 |   |   |   | 546 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at End of Year                             |   |   | 4,729 |   |   |   | 4,334 |   |   |   | 3,899 |   |   |   | 3,598 |   |   |   | 3,665 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      at End of Year (Net of Allowance)            |   |   | 338,460 |   |   |   | 322,324 |   |   |   | 294,046 |   |   |   | 230,805 |   |   |   | 200,759 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio:      Allowance to Loans                          |   |   | 1.40 | % |   |   | 1.34 | % |   |   | 1.33 | % |   |   | 1.56 | % |   |   | 1.83 | % |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Average      Loans                                      |   |   | 340,689 |   |   |   | 315,468 |   |   |   | 271,323 |   |   |   | 221,309 |   |   |   | 197,814 |   |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio:  Allowance      to Average Loans       |   |   | 1.39 | % |   |   | 1.37 | % |   |   | 1.44 | % |   |   | 1.63 | % |   |   | 1.85 | % |
|                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio:  Net      Charge Offs to Average Loans |   |   | 0.22 | % |   |   | 0.17 | % |   |   | 0.42 | % |   |   | 0.32 | % |   |   | 0.17 | % |

----

| Table      8 - Nonperforming Assets |   |
|-------------------------------------|--------|
| (in      thousands)                 |   |
|                                |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
| Loans:                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual                         |   |   | 1,043 |   |   |   | 819 |   |   |   | 15 |   |   |   | 172 |   |   |   | 78 |   |
|                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 90      Days+ Past-Due              |   |   | 1,725 |   |   |   | 1,489 |   |   |   | 786 |   |   |   | 724 |   |   |   | 629 |   |
|                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Nonperforming Loans      |   |   | 2,768 |   |   |   | 2,308 |   |   |   | 801 |   |   |   | 896 |   |   |   | 707 |   |
| As      % of Total Loans            |   |   | 0.81 | % |   |   | 0.71 | % |   |   | 0.27 | % |   |   | 0.38 | % |   |   | 0.35 | % |
|                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Real Estate              |   |   | 716 |   |   |   | 365 |   |   |   | 558 |   |   |   | 165 |   |   |   | 129 |   |
| As      % of Total Loans            |   |   | 0.21 | % |   |   | 0.11 | % |   |   | 0.19 | % |   |   | 0.07 | % |   |   | 0.06 | % |
|                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan      Loss Reserve              |   |   | 4,729 |   |   |   | 4,334 |   |   |   | 3,899 |   |   |   | 3,598 |   |   |   | 3,665 |   |
|                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan      Charge-Offs               |   |   | 2,400 |   |   |   | 1,214 |   |   |   | 1,617 |   |   |   | 1,128 |   |   |   | 710 |   |
|                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Loans                    |   |   | 343,189 |   |   |   | 326,658 |   |   |   | 297,945 |   |   |   | 234,403 |   |   |   | 204,424 |   |

----

----

| Table      8A - Allocation of the Allowance for Loan Losses |   |
|-------------------------------------------------------------|--------|
| (Dollars      in thousands)                                 |   |
|                                                        |   | At      December 31, |   |
|                                                        |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
|                                                        |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Balance |   |   | Percent |   |   | Balance |   |   | Percent |   |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial,      Financial                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    &      Agricultural                   |   | $ | 547 |   |   |   | 11.57 | % |   | $ | 590 |   |   |   | 13.61 | % |   | $ | 401 |   |   |   | 10.28 | % |   | $ | 538 |   |   |   | 14.95 | % |   | $ | 856 |   |   |   | 23.36 | % |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      Estate - Construction                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    &      Development                    |   |   | 1,758 |   |   |   | 37.17 | % |   |   | 913 |   |   |   | 21.07 | % |   |   | 865 |   |   |   | 22.19 | % |   |   | 522 |   |   |   | 14.51 | % |   |   | 461 |   |   |   | 12.58 | % |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real      Estate - Mortgage                                 |   |   | 1,558 |   |   |   | 32.95 | % |   |   | 1,922 |   |   |   | 44.35 | % |   |   | 1,906 |   |   |   | 48.88 | % |   |   | 1,735 |   |   |   | 48.22 | % |   |   | 1,533 |   |   |   | 41.83 | % |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Installment      Loans                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    to      Individuals                       |   |   | 770 |   |   |   | 16.29 | % |   |   | 460 |   |   |   | 10.61 | % |   |   | 575 |   |   |   | 14.75 | % |   |   | 780 |   |   |   | 21.68 | % |   |   | 732 |   |   |   | 19.97 | % |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Loans                                            |   |   | 95 |   |   |   | 2.01 | % |   |   | 413 |   |   |   | 9.53 | % |   |   | 152 |   |   |   | 3.90 | % |   |   | 23 |   |   |   | 0.64 | % |   |   | 26 |   |   |   | 0.71 | % |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unallocated                                                 |   |   | - |   |   |   | 0.00 | % |   |   | 36 |   |   |   | 0.83 | % |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | 0.00 | % |   |   | 57 |   |   |   | 1.56 | % |
|                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Loans                                            |   | $ | 4,729 |   |   |   | 100.00 | % |   | $ | 4,334 |   |   |   | 100.00 | % |   | $ | 3,899 |   |   |   | 100.00 | % |   | $ | 3,598 |   |   |   | 100.00 | % |   | $ | 3,665 |   |   |   | 100.00 | % |

----

----

| Table      9 - Securities          |   |
|------------------------------------|--------|
| (in      thousands)                |   |
|                               |   | 2007 |   |   | 2006 |   |   | 2005 |   |   | 2004 |   |   | 2003 |   |
| Securities      Available for Sale |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.      S. Treasuries              |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 702 |   |
| U.      S. Agencies                |   |   | 1,536 |   |   |   | 5,441 |   |   |   | 11,175 |   |   |   | 23,316 |   |   |   | 28,560 |   |
| Mortgage      Backed               |   |   | 34,452 |   |   |   | 20,915 |   |   |   | 20,872 |   |   |   | 22,419 |   |   |   | 9,611 |   |
| State,      Municipals & Other |   |   | 30,168 |   |   |   | 34,672 |   |   |   | 46,902 |   |   |   | 50,934 |   |   |   | 37,447 |   |
| Total      Securities AFS          |   |   | 66,156 |   |   |   | 61,028 |   |   |   | 78,949 |   |   |   | 96,669 |   |   |   | 76,320 |   |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities      Held to Maturity   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.      S. Treasuries              |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| U.      S. Agencies                |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Mortgage      Backed               |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| State,      Municipals & Other |   |   | 7,235 |   |   |   | 7,850 |   |   |   | 2,047 |   |   |   | 2,050 |   |   |   | 2,053 |   |
| Total      Securities HTM          |   |   | 7,235 |   |   |   | 7,850 |   |   |   | 2,047 |   |   |   | 2,050 |   |   |   | 2,053 |   |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Securities              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equities                           |   |   | 2,028 |   |   |   | 2,250 |   |   |   | 1,456 |   |   |   | 1,259 |   |   |   | 991 |   |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Securities              |   |   | 75,419 |   |   |   | 71,128 |   |   |   | 82,452 |   |   |   | 99,978 |   |   |   | 79,364 |   |

----

| Table      10                                     |   |
|---------------------------------------------------|--------|
| Securities      Maturity & Repricing Schedule |   |
| For      12/31/2007                               |   |
| (in      thousands)                               |   |
|                                              |   | 1      Year |   |   | After      1 Year |   |   | 5      to 10 |   |   | Over |   |
|                                              |   | and      Less |   |   | Thru      5 Years |   |   | Years |   |   | 10      Years |   |
| Agencies                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      Value                                   |   |   | - |   |   |   | 1,536 |   |   |   | - |   |   |   | - |   |
| Book      Yield                                   |   |   | - |   |   |   | 5.150 |   |   |   | - |   |   |   | - |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable      Municipals                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      Value                                   |   |   | 149 |   |   |   | 118 |   |   |   | 115 |   |   |   | - |   |
| Book      Yield                                   |   |   | 6.926 |   |   |   | 4.840 |   |   |   | 4.831 |   |   |   | - |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Municipals                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      Value                                   |   |   | 3,083 |   |   |   | 13,071 |   |   |   | 9,474 |   |   |   | 11,599 |   |
| Book      Yield                                   |   |   | 5.956 |   |   |   | 5.796 |   |   |   | 6.408 |   |   |   | 7.225 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity-FHLB                                       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,524 |   |
| Book      Yield                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5.080 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Securities                             |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 504 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| MBS                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Fair      Value                                   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 34,453 |   |
| Book      Yield                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5.518 |   |
|                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Fair Values                            |   |   | 3,232 |   |   |   | 14,725 |   |   |   | 9,589 |   |   |   | 48,080 |   |
| Weigh      Bk Yields                              |   |   | 5.730 |   |   |   | 5.790 |   |   |   | 6.390 |   |   |   | 5.840 |   |

| Table      11 - Securities Weighted Maturity and Tax Equivalent Yield by      Classification |   |
|----------------------------------------------------------------------------------------------|--------|
| December      31, 2007                                                                       |   |
|                                                                                         |   |   |   |   | Weighted |   |
|                                                                                         |   | Weighted |   |   | Tax-Equivalent |   |
|                                                                                         |   | Maturity |   |   | Yield |   |
| U.      S. Agencies                                                                          |   |   | 2.82 |   |   |   | 5.150 | % |
| Mortgage      Backed                                                                         |   |   | 5.73 |   |   |   | 5.520 | % |
| Taxable      Municipals                                                                      |   |   | 3.28 |   |   |   | 5.710 | % |
| Tax-Exempt      Municipals                                                                   |   |   | 7.02 |   |   |   | 6.410 | % |
|                                                                                         |   |   |   |   |   |   |   |   |
| Total      Securities Portfolio                                                              |   |   | 6.310 | % |   |   | 5.950 | % |

----

| Table      12 - Deposit Information  |   |
|--------------------------------------|--------|
| (in      thousands)                  |   |
|                                 |   | 2007 |   |   | 2006 |   |   | 2005 |   |   |   |   |   | 2004 |   |   |   |   |   | 2003 |   |   |   |   |
|                                 |   | Average |   |   | Avg |   |   | Average |   |   | Avg |   |   | Average |   |   | Avg |   |   | Average |   |   | Avg |   |   | Average |   |   | Avg |   |
|                                 |   | Balance |   |   | Rate |   |   | Balance |   |   | Rate |   |   | Balance |   |   | Rate |   |   | Balance |   |   | Rate |   |   | Balance |   |   | Rate |   |
| Noninterest-      Bearing            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Demand             |   |   | 56,816 |   |   |   |   |   |   | 58,635 |   |   |   |   |   |   | 57,954 |   |   |   |   |   |   | 51,557 |   |   |   |   |   |   | 47,034 |   |   |   |   |
|    Savings            |   |   | 251 |   |   |   |   |   |   | 242 |   |   |   |   |   |   | 245 |   |   |   |   |   |   | 241 |   |   |   |   |   |   | 226 |   |   |   |   |
| Interest-bearing                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Demand             |   |   | 135,369 |   |   |   | 2.76 |   |   |   | 132,447 |   |   |   | 2.65 |   |   |   | 145,036 |   |   |   | 1.70 |   |   |   | 123,215 |   |   |   | 1.04 |   |   |   | 93,409 |   |   |   | 1.00 |   |
|    Savings            |   |   | 29,932 |   |   |   | 1.52 |   |   |   | 31,363 |   |   |   | 1.50 |   |   |   | 29,420 |   |   |   | 1.18 |   |   |   | 26,663 |   |   |   | 1.05 |   |   |   | 22,780 |   |   |   | 1.13 |   |
|    Time      Deposits |   |   | 168,032 |   |   |   | 4.86 |   |   |   | 144,549 |   |   |   | 4.27 |   |   |   | 117,127 |   |   |   | 2.86 |   |   |   | 114,125 |   |   |   | 1.95 |   |   |   | 114,998 |   |   |   | 2.11 |   |
|                                 |   |   | 390,400 |   |   |   |   |   |   |   | 367,236 |   |   |   |   |   |   |   | 349,782 |   |   |   |   |   |   |   | 315,801 |   |   |   |   |   |   |   | 278,447 |   |   |   |   |   |
|                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| Table      13 - Maturity Ranges of Time Deposits |   |
|--------------------------------------------------|--------|
| With      Balances More Than $100,000            |   |
| As      of December 31, 2007                     |   |
| (in      thousands)                              |   |
|                                             |   |   |   |
| 3      Months or Less                            |   | $ | 41,210 |   |
| Over      3 Months thru 6 Months                 |   |   | 21,829 |   |
| Over      6 Months thru 12 Months                |   |   | 24,012 |   |
| Over      12 Months                              |   |   | 3,248 |   |
|                                             |   |   | 90,299 |   |
|                                             |   |   |   |   |

----

----

----

| Table      14 - Funding Uses and Sources                          |
|-------------------------------------------------------------------|
| (in      thousands)                                               |
|                                                              | 2007 | 2006 | 2005 |
|                                                              |   | Increase |   |   | Increase |   |   | Increase |   |
|                                                              | Average | (Decrease) | % | Average | (Decrease) | % | Average | (Decrease) | % |
|                                                              | Balance | Amount | Change | Balance | Amount | Change | Balance | Amount | Change |
| Funding      Uses                                                 |   |   |   |   |   |   |   |   |   |
| Loans                                                             | 340,689 | 25,221 | 7.99 | 315,468 | 44,145 | 16.27 | 271,323 | 50,014 | 22.60 |
| Securities*                                                       | 72,654 | -6,332 | -8.02 | 78,986 | -13,693 | -14.77 | 92,679 | -3,540 | -3.68 |
| Federal      Funds Sold                                           | 2,903 | 1,067 | 58.12 | 1,836 | -1,731 | -48.53 | 3,567 | -921 | -20.52 |
|                                                              | 416,246 | 19,956 | 5.04 | 396,290 | 28,721 | 7.81 | 367,569 | 45,553 | 14.15 |
|                                                              |   |   |   |   |   |   |   |   |   |
| Funding      Sources                                              |   |   |   |   |   |   |   |   |   |
| Noninterest      Bearing Deposits                                 |   |   |   |   |   |   |   |   |   |
|    Demand      Deposits                            | 56,816 | -1,819 | -3.10 | 58,635 | 681 | 1.18 | 57,954 | 6,397 | 12.41 |
|    Savings      Deposits                           | 251 | 9 | 3.72 | 242 | -3 | -1.22 | 245 | 4 | 1.66 |
| Interest      Bearing Deposits                                    |   |   |   |   |   |   |   |   |   |
|    Demand      Deposits                            | 135,369 | 2,922 | 2.21 | 132,447 | -12,589 | -8.68 | 145,036 | 21,821 | 17.71 |
|    Savings      Deposits                           | 29,932 | -1,431 | -4.56 | 31,363 | 1,943 | 6.60 | 29,420 | 2,757 | 10.34 |
|    Time      Deposits                              | 168,033 | 23,484 | 16.25 | 144,549 | 27,422 | 23.41 | 117,127 | 3,002 | 2.63 |
| Borrowings                                                        | 23,710 | -3,523 | -12.94 | 27,233 | 9,195 | 50.98 | 18,038 | 9,311 | 106.69 |
|                                                              | 414,111 | 19,642 | 4.98 | 394,469 | 26,649 | 7.25 | 367,820 | 43,292 | 13.34 |
|                                                              |   |   |   |   |   |   |   |   |   |
| *Cost      basis is used for securities instead of market values. |   |   |   |   |   |   |

----

| Table      15 - Liquidity; Interest Rate Sensitivity |   |
|------------------------------------------------------|--------|
| (in      thousands)                                  |   |
|                                                 |   | As      of December 31, 2007 |   |
|                                                 |   | Less |   |   | Over      3 Mos |   |   | Over      1 yr |   |   | Over |   |   |   |   |
|                                                 |   | 3      Mos |   |   | thru      1 Yr |   |   | thru      3 Yrs |   |   | 3      Yrs |   |   | Total |   |
| Interest Earning Assets                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                |   |   | 166,954 |   |   |   | 103,957 |   |   |   | 49,241 |   |   |   | 23,038 |   |   |   | 343,190 |   |
| Short-Term      Investments                          |   |   | 198 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 198 |   |
| Investment      Securities                           |   |   | 5,208 |   |   |   | 11,587 |   |   |   | 18,435 |   |   |   | 40,189 |   |   |   | 75,419 |   |
| Other                                                |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 5,970 |   |   |   | 5,970 |   |
| Total      Interest Earning Assets                   |   |   | 172,360 |   |   |   | 115,544 |   |   |   | 67,676 |   |   |   | 69,197 |   |   |   | 424,777 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest BearingLiabilities                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW                                                  |   |   | 21,727 |   |   |   | - |   |   |   | 6,368 |   |   |   | 38,747 |   |   |   | 66,842 |   |
| Money      Market                                    |   |   | 42,761 |   |   |   | - |   |   |   | 2,706 |   |   |   | 15,800 |   |   |   | 61,267 |   |
| Savings      Deposits                                |   |   | 11,995 |   |   |   | - |   |   |   | 2,108 |   |   |   | 12,794 |   |   |   | 26,897 |   |
| Time      Deposits                                   |   |   | 61,328 |   |   |   | 96,433 |   |   |   | 5,581 |   |   |   | 12,463 |   |   |   | 175,805 |   |
| Short-Term      Borrowings                           |   |   |   |   |   |   | 1,000 |   |   |   | - |   |   |   | - |   |   |   | 1,000 |   |
| Long-Term      Borrowings                            |   |   | 164 |   |   |   | 491 |   |   |   | 4,404 |   |   |   | 17,023 |   |   |   | 22,082 |   |
| Total      Interest Bearing Liabilities              |   |   | 137,975 |   |   |   | 97,924 |   |   |   | 21,167 |   |   |   | 96,827 |   |   |   | 353,893 |   |
|                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rate      Sensitive Assets (RSA)                     |   |   | 172,360 |   |   |   | 287,904 |   |   |   | 355,580 |   |   |   | 424,777 |   |   |   | 424,777 |   |
| Rate      Sensitive Liabilities (RSL)                |   |   | 137,975 |   |   |   | 235,899 |   |   |   | 257,066 |   |   |   | 353,893 |   |   |   | 353,893 |   |
| Rate      Sensitive Gap                              |   |   | 34,385 |   |   |   | 17,620 |   |   |   | 46,509 |   |   |   | -27,630 |   |   |   | 70,884 |   |
| Rate      Sensitive Cumulative Gap                   |   |   | 34,385 |   |   |   | 52,005 |   |   |   | 98,514 |   |   |   | 70,884 |   |   |   | 70,884 |   |
| Cumulative      % of Earning Assets                  |   |   | 8.09 | % |   |   | 12.24 | % |   |   | 23.19 | % |   |   | 16.69 | % |   |   | 16.69 | % |
| Cumulative      % of Total Assets                    |   |   | 10.11 | % |   |   | 15.28 | % |   |   | 28.95 | % |   |   | 20.83 | % |   |   | 20.83 | % |

----

| Table      15A - Change in Net Interest Income Over One Year  Horizon |
|-----------------------------------------------------------------------|
|                                                                  |   |   |   |   |
|                                                                  | (Dollars      in Thousands) |
|                                                                  | at      December 31, 2007 | at      December 31, 2006 |
|                                                                  | Dollar | % | Dollar | % |
| Changes      in Levels of Interest Rates                              | Change | Change | Change | Change |
|                                                                  |   |   |   |   |
| Increase      2.00%                                                   | ($57) | -0.30% | $3 | 0.00% |
| Increase      1.00%                                                   |                (7) | 0.00% |             (21) | -0.01% |
| Decrease      1.00%                                                   |              (27) | -0.10% | 210 | 1.10% |
| Decrease      2.00%                                                   |            (332) | -1.50% | 269 | 1.40% |

| As      of December 31, 2006, the neutral status is evident as reflected in the      projected .00% decrease in the up 200 ramp.  The down 200 ramp      as of December 31, 2006, results in an increase to net interest income of      1.40%, well within the policy limit of (10%).   Analysis of      the simulation presented indicates as of December 31, 2007, there is some      short term interest rate risk due to the projected decrease in net      interest income of 1.50% in a down 200 basis point rate      ramp.  At December 31, 2007, the model reflected compliance with      the policy limit. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Capital      Adequacy |
|-----------------------|

----

| Table      16 - Capital Ratios           |   |
|------------------------------------------|--------|
| (Dollars      in thousands)              |   |
|                                     |   |   |   |   |   |   |   |   |   |
|                                     |   | As      of December 31, |   |
|                                     |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Tier 1 Capital                           |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |
| Total      Tier 1 Capital                |   |   | 53,106 |   |   |   | 48,151 |   |   |   | 43,568 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier      1 Capital                      |   |   | 53,106 |   |   |   | 48,151 |   |   |   | 43,568 |   |
| Allowable      Allowance for Loan Losses |   |   | 4,699 |   |   |   | 4,334 |   |   |   | 3,899 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Capital                       |   |   | 57,805 |   |   |   | 52,485 |   |   |   | 47,467 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk Weighted Assets                     |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      Average Assets                  |   |   | 480,244 |   |   |   | 454,841 |   |   |   | 426,707 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Risk Weighted Assets          |   |   | 377,859 |   |   |   | 356,670 |   |   |   | 330,071 |   |
|                                     |   |   |   |   |   |   |   |   |   |   |   |   |
| Risk Based Ratios                        |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier      1 Leverage Ratio               |   |   | 11.06 |   |   |   | 10.59 |   |   |   | 10.21 |   |
| Tier      1 Risk Based Capital Ratio     |   |   | 14.05 |   |   |   | 13.50 |   |   |   | 13.20 |   |
| Total      Risk Based Capital Ratio      |   |   | 15.30 |   |   |   | 14.72 |   |   |   | 14.38 |   |

| Tabular      Disclosure of Contractual Obligations |   |
|----------------------------------------------------|--------|
| (in      thousands)                                |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |   |   |   | Payment      due by period |   |
|                                               |   |   |   |   | Less      than |   |   | 1      to 3 |   |   | 3      to 5 |   |   | More      Than |   |
| Contractual Obligations                            |   | Total |   |   | 1 Year |   |   | Years |   |   | Years |   |   | 5 Years |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-Term      Debt Obligations                    |   | $ | 23,082 |   |   | $ | 1,655 |   |   | $ | 4,404 |   |   | $ | 9,538 |   |   | $ | 7,485 |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      Lease Obligations                     |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating      Lease Obligations                   |   |   | 51 |   |   |   | 10 |   |   |   | 20 |   |   |   | 21 |   |   |   | - |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      Obligations                          |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      Long-Term Liabilities                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reflected      on the Registrant's                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      Sheet under GAAP                      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                              |   | $ | 23,133 |   |   | $ | 1,665 |   |   | $ | 4,424 |   |   | $ | 9,559 |   |   | $ | 7,485 |   |

----

riskexposure and as market conditions dictate, modifies balance sheetpositions.

|                                              |   | 2007                                       |    |   | 2006   |   |    | 2005   |   |   | 2004    |   |   | 2003   |    |
|---------------------------------------------------|--------|--------------------------------------------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
|                                              |   | (In      thousands, except per share data) |    |
| INCOME      DATA                                  |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Interest      and fees on loans                   |   | $                                          | 30,283  |   |   | $      | 27,013  |   |   | $      | 20,570  |   |   | $      | 15,042  |   |   | $ | 13,584 |   |
| Interest      and dividends on securities         |   |                                       | 3,403   |   |   |   | 3,294   |   |   |   | 3,643   |   |   |   | 3,826   |   |   |   | 3,256 |   |
| Other      interest income                        |   |                                       | 447     |   |   |   | 279     |   |   |   | 245     |   |   |   | 224     |   |   |   | 169 |   |
|    Total      interest income      |   |                                       | 34,133  |   |   |   | 30,586  |   |   |   | 24,458  |   |   |   | 19,092  |   |   |   | 17,009 |   |
| Interest      expense                             |   |                                       | 13,699  |   |   |   | 11,523  |   |   |   | 6,907   |   |   |   | 4,139   |   |   |   | 3,955 |   |
|    Net      interest income        |   |                                       | 20,434  |   |   |   | 19,063  |   |   |   | 17,551  |   |   |   | 14,953  |   |   |   | 13,054 |   |
| Provision      for loan losses                    |   |                                       | 1,155   |   |   |   | 965     |   |   |   | 1,440   |   |   |   | 637     |   |   |   | 546 |   |
| Net      interest income after provision for      |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|    loan      losses                |   |                                       | 19,279  |   |   |   | 18,098  |   |   |   | 16,111  |   |   |   | 14,316  |   |   |   | 12,508 |   |
| Service      charges on deposit accounts          |   |                                       | 5,152   |   |   |   | 4,592   |   |   |   | 4,333   |   |   |   | 3,876   |   |   |   | 3,758 |   |
| Other      income                                 |   |                                       | 1,697   |   |   |   | 2,334   |   |   |   | 1,818   |   |   |   | 1,781   |   |   |   | 1,908 |   |
|    Total      noninterest income   |   |                                       | 6,849   |   |   |   | 6,926   |   |   |   | 6,151   |   |   |   | 5,657   |   |   |   | 5,666 |   |
| Salaries      and employee benefits               |   |                                       | 10,141  |   |   |   | 9,276   |   |   |   | 8,588   |   |   |   | 7,607   |   |   |   | 6,649 |   |
| Occupancy      and equipment expense              |   |                                       | 2,302   |   |   |   | 1,888   |   |   |   | 1,553   |   |   |   | 1,236   |   |   |   | 1,311 |   |
| Other      expenses                               |   |                                       | 3,095   |   |   |   | 3,271   |   |   |   | 2,807   |   |   |   | 2,567   |   |   |   | 2,658 |   |
|    Total      noninterest expenses |   |                                       | 15,538  |   |   |   | 14,435  |   |   |   | 12,948  |   |   |   | 11,410  |   |   |   | 10,618 |   |
|                                              |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Income      before income taxes                   |   |                                       | 10,590  |   |   |   | 10,589  |   |   |   | 9,314   |   |   |   | 8,563   |   |   |   | 7,556 |   |
| Income      taxes                                 |   |                                       | 3,155   |   |   |   | 3,349   |   |   |   | 2,707   |   |   |   | 2,431   |   |   |   | 2,039 |   |
|                                              |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      income                                   |   | $                                          | 7,435   |   |   | $      | 7,240   |   |   | $      | 6,607   |   |   | $      | 6,132   |   |   | $ | 5,517 |   |
|                                              |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| PER      SHARE DATA (1)                           |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net      income - basic                           |   | $                                          | 2.58    |   |   | $      | 2.51    |   |   | $      | 2.29    |   |   | $      | 2.13    |   |   | $ | 1.92 |   |
| Dividends                                         |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                              |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Other      Ratios:                                |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Return      on Average Assets                     |   |                                       | 1.54    |   |   |   | 1.58    |   |   |   | 1.57    |   |   |   | 1.65    |   |   |   | 1.66 |   |
| Return      on Equity                             |   |                                       | 13.44   |   |   |   | 14.36   |   |   |   | 14.16   |   |   |   | 14.22   |   |   |   | 13.73 |   |
| Loans      to Deposits                            |   |                                       | 88.28   |   |   |   | 89.08   |   |   |   | 83.98   |   |   |   | 70.29   |   |   |   | 70.87 |   |
| Loans      to Total Assets                        |   |                                       | 72.02   |   |   |   | 71.27   |   |   |   | 68.36   |   |   |   | 60.06   |   |   |   | 60.08 |   |
| Equity      Capital to Total Assets               |   |                                       | 11.95   |   |   |   | 11.34   |   |   |   | 10.83   |   |   |   | 11.24   |   |   |   | 12.01 |   |
| Average      Equity to Average Assets             |   |                                       | 11.43   |   |   |   | 10.99   |   |   |   | 11.12   |   |   |   | 11.61   |   |   |   | 12.12 |   |
| Dividend      Payout Ratio                        |   |                                       | 38.76   |   |   |   | 37.90   |   |   |   | 39.52   |   |   |   | 40.52   |   |   |   | 40.66 |   |
|                                              |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| FINANCIAL      DATA                               |   |                                       |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total      assets                                 |   | $                                          | 476,530 |   |   | $      | 458,329 |   |   | $      | 435,876 |   |   | $      | 390,274 |   |   | $ | 340,253 |   |
| Net      loans                                    |   |                                       | 338,460 |   |   |   | 322,324 |   |   |   | 294,046 |   |   |   | 230,805 |   |   |   | 200,759 |   |
| Total      deposits                               |   |                                       | 388,733 |   |   |   | 366,669 |   |   |   | 354,766 |   |   |   | 333,458 |   |   |   | 288,442 |   |
| Total      shareholders' equity                   |   |                                       | 56,939  |   |   |   | 51,984  |   |   |   | 47,187  |   |   |   | 43,870  |   |   |   | 40,848 |   |

| (1)   | Restated      for stock dividends |
|-----------------|-----------------------------------|

----

| SECURITY CAPITAL      CORPORATION                                                     |   |
|---------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      BALANCE SHEETS                                                      |   |
| DECEMBER      31, 2007 AND 2006                                                       |   |
|                                                                                  |   |   |   |   |   |   |
| ASSETS                                                                                |   | 2007 |   |   | 2006 |   |
|                                                                                  |   | (In thousands) |   |
| Cash      and due from banks                                                          |   | $ | 19,163 |   |   | $ | 23,073 |   |
| Interest-bearing      deposits with banks                                             |   |   | 643 |   |   |   | 374 |   |
|    Total      cash and cash equivalents                                |   |   | 19,806 |   |   |   | 23,447 |   |
| Certificates      of deposit with other banks                                         |   |   | 198 |   |   |   | 198 |   |
| Securities      available-for-sale                                                    |   |   | 66,156 |   |   |   | 61,028 |   |
| Securities held-to-maturity  (estimated fair      value                     |   |   | 7,235 |   |   |   | 7,850 |   |
|    (of      $7,442 in 2007 and $8,150 in 2006)                         |   |   |   |   |   |   |   |   |
| Securities,      other                                                                |   |   | 2,028 |   |   |   | 2,250 |   |
|    Total      securities                                               |   |   | 75,419 |   |   |   | 71,128 |   |
| Loans,      less allowance for loan losses of                                         |   |   |   |   |   |   |   |   |
|    $4,730      in 2007 and $4,334 in 2006                              |   |   | 338,493 |   |   |   | 322,324 |   |
| Interest      receivable                                                              |   |   | 6,158 |   |   |   | 5,091 |   |
| Premises      and equipment                                                           |   |   | 23,072 |   |   |   | 21,969 |   |
| Goodwill                                                                              |   |   | 3,874 |   |   |   | 3,874 |   |
| Cash      surrender value of life insurance                                           |   |   | 6,075 |   |   |   | 5,869 |   |
| Customers'      liability on acceptances                                              |   |   | 1,058 |   |   |   | 2,293 |   |
| Other      assets                                                                     |   |   | 2,377 |   |   |   | 2,136 |   |
| Total      Assets                                                                     |   | $ | 476,530 |   |   | $ | 458,329 |   |
|                                                                                  |   |   |   |   |   |   |   |   |
| LIABILITIES      AND SHAREHOLDERS' EQUITY                                             |   |   |   |   |   |   |   |   |
| Liabilities:                                                                          |   |   |   |   |   |   |   |   |
|    Noninterest-bearing      deposits                                   |   | $ | 58,373 |   |   | $ | 59,380 |   |
|    Interest-bearing      deposits                                      |   |   | 330,360 |   |   |   | 307,319 |   |
|       Total      deposits                               |   |   | 388,733 |   |   |   | 366,699 |   |
|    Interest      payable                                               |   |   | 1,953 |   |   |   | 1,591 |   |
|    Acceptanes      outstanding                                         |   |   | 1,058 |   |   |   | 2,293 |   |
|    Federal      funds purchased                                        |   |   | 4,000 |   |   |   | 8,000 |   |
|    Borrowed      funds                                                 |   |   | 23,472 |   |   |   | 27,380 |   |
|    Other      liabilities                                              |   |   | 375 |   |   |   | 382 |   |
|       Total      liabilities                            |   |   | 419,591 |   |   |   | 406,345 |   |
| Shareholders'      equity:                                                            |   |   |   |   |   |   |   |   |
|    Common      stock - $5 par value, 5,000,000 shares                  |   |   |   |   |   |   |   |   |
|       authorized,      2,890,811 shares and 2,753,557   |   |   |   |   |   |   |   |   |
|       shares      in 2007 and 2006, respectively        |   |   | 14,454 |   |   |   | 13,768 |   |
|    Surplus                                                             |   |   | 40,701 |   |   |   | 35,654 |   |
|    Retained      earnings                                              |   |   | 1,502 |   |   |   | 2,651 |   |
|    Treasury      stock, at par, 8,852 shares and 9,487                 |   |   |   |   |   |   |   |   |
|          Total      shareholders' equity |   |   | 56,939 |   |   |   | 51,984 |   |
| Total      Liabilities and Shareholders' Equity                                       |   | $ | 476,530 |   |   | $ | 458,329 |   |

----

| SECURITY      CAPITAL CORPORATION                                          |   |
|----------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF INCOME                                     |   |
| YEARS      ENDED DECEMBER 31, 2007, 2006 AND 2005                          |   |
|                                                                       |   |   |   |   |   |   |   |   |   |
|                                                                       |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                       |   | (In      thousands, except per share data) |   |
| INTEREST      INCOME                                                       |   |   |   |   |   |   |   |   |   |
| Interest      and fees on loans                                            |   | $ | 30,283 |   |   | $ | 27,013 |   |   | $ | 20,570 |   |
| Interest      and dividends on securities:                                 |   |   |   |   |   |   |   |   |   |   |   |   |
|    Taxable                                                  |   |   | 1,772 |   |   |   | 1,596 |   |   |   | 1,705 |   |
|    Tax-exempt                                               |   |   | 1,631 |   |   |   | 1,698 |   |   |   | 1,938 |   |
| Other                                                                      |   |   | 447 |   |   |   | 279 |   |   |   | 245 |   |
|    Total      interest income                               |   |   | 34,133 |   |   |   | 30,586 |   |   |   | 24,458 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST      EXPENSE                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      on time deposits of $100,000 or more                         |   |   | 4,229 |   |   |   | 3,101 |   |   |   | 1,452 |   |
| Interest      on other deposits                                            |   |   | 8,130 |   |   |   | 7,048 |   |   |   | 4,712 |   |
| Interest      on borrowed funds                                            |   |   | 1,340 |   |   |   | 1,374 |   |   |   | 743 |   |
|    Total      interest expense                              |   |   | 13,699 |   |   |   | 11,523 |   |   |   | 6,907 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                   |   |   | 20,434 |   |   |   | 19,063 |   |   |   | 17,551 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for loan losses                                             |   |   | 1,155 |   |   |   | 965 |   |   |   | 1,440 |   |
|    Net      interest income after provision for loan losses |   |   | 19,279 |   |   |   | 18,098 |   |   |   | 16,111 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      INCOME                                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Service      charges on deposit accounts                                   |   |   | 5,152 |   |   |   | 4,592 |   |   |   | 4,333 |   |
| Other      service charges and fees                                        |   |   | 415 |   |   |   | 647 |   |   |   | 388 |   |
| Trust      Department income                                               |   |   | 1,068 |   |   |   | 1,038 |   |   |   | 978 |   |
| Securities      gains (losses), net                                        |   |   | (448 | ) |   |   | (253 | ) |   |   | (52 | ) |
| Gains      (losses) on sale of other assets, net                           |   |   | 117 |   |   |   | 454 |   |   |   | 67 |   |
| Other                                                                      |   |   | 545 |   |   |   | 448 |   |   |   | 437 |   |
|    Total      other income                                  |   |   | 6,849 |   |   |   | 6,926 |   |   |   | 6,151 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| OTHER      EXPENSE                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Salaries      and employee benefits                                        |   |   | 10,141 |   |   |   | 9,276 |   |   |   | 8,588 |   |
| Net      occupancy expense                                                 |   |   | 1,114 |   |   |   | 1,020 |   |   |   | 801 |   |
| Furniture      and equipment expense                                       |   |   | 1,188 |   |   |   | 868 |   |   |   | 752 |   |
| Printing,      stationery, and supplies                                    |   |   | 347 |   |   |   | 348 |   |   |   | 250 |   |
| Data      processing                                                       |   |   | 192 |   |   |   | 366 |   |   |   | 301 |   |
| Directors'      fees                                                       |   |   | 301 |   |   |   | 274 |   |   |   | 259 |   |
| Professional      fees                                                     |   |   | 333 |   |   |   | 191 |   |   |   | 143 |   |
| Other                                                                      |   |   | 1,922 |   |   |   | 2,092 |   |   |   | 1,854 |   |
|    Total      other expense                                 |   |   | 15,538 |   |   |   | 14,435 |   |   |   | 12,948 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Income      before income taxes                                            |   |   | 10,590 |   |   |   | 10,589 |   |   |   | 9,314 |   |
| Income      taxes                                                          |   |   | 3,155 |   |   |   | 3,349 |   |   |   | 2,707 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                            |   | $ | 7,435 |   |   | $ | 7,240 |   |   | $ | 6,607 |   |
|                                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic      net income per share                                            |   | $ | 2.58 |   |   | $ | 2.51 |   |   | $ | 2.29 |   |

----

| SECURITY      CAPITAL CORPORATION                                                  |   |
|------------------------------------------------------------------------------------|--------|
| CONSOIDATED      STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY                     |   |
| YEARS      ENDED DECEMBER 31, 2007, 2006 AND 2005                                  |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Other |   |   |   |   |
|                                                                               |   | Comprehensive |   |   | Common |   |   |   |   |   | Retained |   |   | Treasury |   |   | Comprehensive |   |   |   |   |
|                                                                               |   | Income |   |   | Stock |   |   | Surplus |   |   | Earnings |   |   | Stock |   |   | Income |   |   | Total |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2004                                                    |   |   |   |   | $ | 12,493 |   |   | $ | 27,826 |   |   | $ | 3,106 |   |   | $ | (65 | ) |   | $ | 510 |   |   | $ | 43,870 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      income for 2005                                         |   | $ | 6,607 |   |   |   | - |   |   |   | - |   |   |   | 6,607 |   |   |   | - |   |   |   | - |   |   |   | 6,607 |   |
|    Net      change in unrealized gain (loss) on                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       securities      available-for-sale, net of tax |   |   | (765 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (765 | ) |   |   | (765 | ) |
|    Comprehensive      income                                        |   | $ | 5,842 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      dividends paid                                                           |   |   |   |   |   |   | - |   |   |   | - |   |   |   | (2,612 | ) |   |   | - |   |   |   | - |   |   |   | (2,612 | ) |
| 5%      stock dividend                                                             |   |   |   |   |   |   | 621 |   |   |   | 3,477 |   |   |   | (4,098 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Purchase      of fractional shares                                                 |   |   |   |   |   |   | - |   |   |   | (13 | ) |   |   | - |   |   |   | (2 | ) |   |   | - |   |   |   | (15 | ) |
| Reissuance      of treasury stock                                                  |   |   |   |   |   |   | - |   |   |   | 90 |   |   |   | - |   |   |   | 12 |   |   |   | - |   |   |   | 102 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2005                                                    |   |   |   |   |   | $ | 13,114 |   |   | $ | 31,380 |   |   | $ | 3,003 |   |   | $ | (55 | ) |   | $ | (255 | ) |   | $ | 47,187 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      income for 2006                                         |   | $ | 7,240 |   |   |   | - |   |   |   | - |   |   |   | 7,240 |   |   |   | - |   |   |   | - |   |   |   | 7,240 |   |
|    Net      change in unrealized gain (loss) on                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       securities      available-for-sale, net of tax |   |   | 214 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 214 |   |   |   | 214 |   |
|    Comprehensive      income                                        |   | $ | 7,454 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      dividends paid                                                           |   |   |   |   |   |   | - |   |   |   | - |   |   |   | (2,744 | ) |   |   | - |   |   |   | - |   |   |   | (2,744 | ) |
| 5%      stock dividend                                                             |   |   |   |   |   |   | 654 |   |   |   | 4,194 |   |   |   | (4,848 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Purchase      of fractional shares                                                 |   |   |   |   |   |   | - |   |   |   | (15 | ) |   |   | - |   |   |   | (3 | ) |   |   | - |   |   |   | (18 | ) |
| Reissuance      of treasury stock                                                  |   |   |   |   |   |   | - |   |   |   | 95 |   |   |   | - |   |   |   | 10 |   |   |   | - |   |   |   | 105 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2006                                                    |   |   |   |   |   | $ | 13,768 |   |   | $ | 35,654 |   |   | $ | 2,651 |   |   | $ | (48 | ) |   | $ | (41 | ) |   | $ | 51,984 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      income for 2007                                         |   | $ | 7,435 |   |   |   | - |   |   |   | - |   |   |   | 7,435 |   |   |   | - |   |   |   | - |   |   |   | 7,435 |   |
|    Net      change in unrealized gain (loss) on                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       securities      available-for-sale, net of tax |   |   | 367 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 367 |   |   |   | 367 |   |
|    Comprehensive      income                                        |   | $ | 7,802 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      dividends paid                                                           |   |   |   |   |   |   | - |   |   |   | - |   |   |   | (2,882 | ) |   |   | - |   |   |   | - |   |   |   | (2,882 | ) |
| 5%      stock dividend                                                             |   |   |   |   |   |   | 686 |   |   |   | 5,016 |   |   |   | (5,702 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Purchase      of fractional shares                                                 |   |   |   |   |   |   | - |   |   |   | (19 | ) |   |   | - |   |   |   | (2 | ) |   |   | - |   |   |   | (21 | ) |
| Purchase      of treasury stock                                                    |   |   |   |   |   |   | - |   |   |   | (4 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (4 | ) |
| Reissuance      of treasury stock                                                  |   |   |   |   |   |   | - |   |   |   | 54 |   |   |   | - |   |   |   | 6 |   |   |   | - |   |   |   | 60 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2007                                                    |   |   |   |   |   | $ | 14,454 |   |   | $ | 40,701 |   |   | $ | 1,502 |   |   | $ | (44 | ) |   | $ | 326 |   |   | $ | 56,939 |   |
|                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| SECURITY      CAPITAL CORPORATON                                                             |   |
|----------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED      STATEMENTS OF CASH FLOWS                                                   |   |
| YEARS      ENDED DECEMBER 31, 2007, 2006 AND 2005                                            |   |
|                                                                                         |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |
|                                                                                         |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                         |   | (in      thousands) |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                                    |   |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |
| Net      income                                                                              |   | $ | 7,435 |   |   | $ | 7,240 |   |   | $ | 6,607 |   |
| Adjustments      to reconcile net income to net cash                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    provided      by operating activities:                                     |   |   |   |   |   |   |   |   |   |   |   |   |
|       Provision      for loan losses                           |   |   | 1,155 |   |   |   | 965 |   |   |   | 1,440 |   |
|       Amortization      of premiums and discounts on           |   |   |   |   |   |   |   |   |   |   |   |   |
|          securities,      net                   |   |   | 93 |   |   |   | 277 |   |   |   | 601 |   |
|       Depreciation      and amortization                       |   |   | 1,157 |   |   |   | 1,003 |   |   |   | 880 |   |
|       Deferred      income taxes                               |   |   | 51 |   |   |   | 78 |   |   |   | (24 | ) |
|       FHLB      stock dividend                                 |   |   | (76 | ) |   |   | (67 | ) |   |   | (38 | ) |
|       (Gain)      loss on sale of securities, net              |   |   | 448 |   |   |   | 253 |   |   |   | 52 |   |
|       (Gain)      loss on sale of other assets, net            |   |   | (117 | ) |   |   | (454 | ) |   |   | (67 | ) |
|       Changes      in:                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|          Interest      receivable               |   |   | (1,067 | ) |   |   | (1,076 | ) |   |   | (877 | ) |
|          Cash      value of life insurance, net |   |   | (206 | ) |   |   | (199 | ) |   |   | (194 | ) |
|          Other      assets                      |   |   | (8 | ) |   |   | (1,496 | ) |   |   | (4,550 | ) |
|          Interest      payable                  |   |   | 362 |   |   |   | 579 |   |   |   | 443 |   |
|          Other      liabilities                 |   |   | 1,242 |   |   |   | 1,140 |   |   |   | 1,569 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      cash provided by operating activities                                               |   |   | 10,469 |   |   |   | 8,243 |   |   |   | 5,842 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase      of securities available-for-sale                                               |   |   | (34,088 | ) |   |   | (5,622 | ) |   |   | (19,284 | ) |
| Proceeds      of maturities and calls of securities                                          |   |   |   |   |   |   |   |   |   |   |   |   |
|    available-for-sale                                                         |   |   | 10,280 |   |   |   | 11,611 |   |   |   | 28,386 |   |
| Proceeds      from sales of securities available-for-sale                                    |   |   | 19,130 |   |   |   | 12,289 |   |   |   | 6,746 |   |
| Proceeds      of maturities and calls of held to maturity                                    |   |   | 210 |   |   |   |   |   |   |   |   |   |
| Purchase      of securities held to maturity                                                 |   |   | - |   |   |   | (5,803 | ) |   |   | - |   |
| Purchase      of other securities                                                            |   |   | (865 | ) |   |   | (727 | ) |   |   | (158 | ) |
| Additions      to premises and equipment                                                     |   |   | (2,311 | ) |   |   | (4,636 | ) |   |   | (4,545 | ) |
| Proceeds      of sale of other assets                                                        |   |   | 474 |   |   |   | 1,374 |   |   |   | 284 |   |
| Purchase      of bank-owned life insurance                                                   |   |   | - |   |   |   | - |   |   |   | (2,000 | ) |
| Changes      in:                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|    Loans                                                                      |   |   | (18,219 | ) |   |   | (28,713 | ) |   |   | (63,629 | ) |
|    Federal      funds sold                                                    |   |   | - |   |   |   | - |   |   |   | 14,000 |   |
|    Certificates      of deposits with other banks                             |   |   | - |   |   |   | 194 |   |   |   | 199 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      cash used in investing activities                                                   |   |   | (25,389 | ) |   |   | (20,033 | ) |   |   | (40,001 | ) |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends      paid on common stock                                                          |   | $ | (2,882 | ) |   | $ | (2,744 | ) |   | $ | (2,612 | ) |
| Purchase      of treasury stock                                                              |   |   | (4 | ) |   |   | - |   |   |   | - |   |
| Reissuance      of treasury stock                                                            |   |   | 60 |   |   |   | 105 |   |   |   | 102 |   |
| Purchase      of fractional shares                                                           |   |   | (21 | ) |   |   | (18 | ) |   |   | (15 | ) |
| Repayment      of debt                                                                       |   |   | (48,943 | ) |   |   | (48,246 | ) |   |   | (8,948 | ) |
| Proceeds      from issuance of debt                                                          |   |   | 45,035 |   |   |   | 61,530 |   |   |   | 12,913 |   |
| Changes      in:                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|    Deposits                                                                   |   |   | 22,034 |   |   |   | 11,933 |   |   |   | 21,308 |   |
|    Federal      funds purchased                                               |   |   | (4,000 | ) |   |   | (7,000 | ) |   |   | 15,000 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      cash provided by financing activities                                               |   |   | 11,279 |   |   |   | 15,560 |   |   |   | 37,748 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      increase in cash and cash equivalents                                               |   |   | (3,641 | ) |   |   | 3,770 |   |   |   | 3,589 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at beginning of year                                          |   |   | 23,447 |   |   |   | 19,677 |   |   |   | 16,088 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at end of year                                                |   | $ | 19,806 |   |   | $ | 23,447 |   |   | $ | 19,677 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                         |   |   | 19,806 |   |   |   | 23,447 |   |   |   | 19,677 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Supplemental      Disclosures of Cash Flow Information                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    Cash      paid during the year for:                                        |   |   |   |   |   |   |   |   |   |   |   |   |
|       Interest                                                 |   | $ | 13,337 |   |   | $ | 10,944 |   |   | $ | 6,464 |   |
|       Income      taxes                                        |   |   | 3,369 |   |   |   | 3,295 |   |   |   | 2,910 |   |
|                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
|    Noncash      activities:                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Transfers      of loans to other real estate and         |   |   |   |   |   |   |   |   |   |   |   |   |
|          repossessed      inventory             |   |   | 1,195 |   |   |   | 738 |   |   |   | 1,052 |   |

----

----

----

|  5. | Loans |
|----------|-------|

----

----

----

|                                            |   | 2007                                       |   |   | 2006   |   |   | 2005   |   |
|-------------------------------------------------|--------|--------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                            |   | (In      thousands, except per share data) |   |
| Basic      Net Income Per Share                 |   |                                       |   |   |   |   |   |   |   |
|                                            |   |                                       |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding |   |                                       | 2,882  |   |   |   | 2,880  |   |   |   | 2,879 |   |
|                                            |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Net      income                                 |   | $                                          | 7,435  |   |   | $      | 7,240  |   |   | $ | 6,607 |   |
|                                            |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Basic      net income per share                 |   | $                                          | 2.58   |   |   | $      | 2.51   |   |   | $ | 2.29 |   |

----

----

----

|                                                                |   |                |   |   | Gross      |   |   | Gross      |   |   |            |   |
|---------------------------------------------------------------------|--------|---------------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------------|--------|
|                                                                |   | Amortized           |   |   | Unrealized |   |   | Unrealized |   |   | Estimated       |   |
|                                                                |   | Cost                |   |   | Gains      |   |   | Losses     |   |   | Fair      Value |   |
|                                                                |   | (In      thousands) |   |
| December      31,2007:                                              |   |                |   |   |       |   |   |       |   |   |            |   |
|    Securities      available-for-sale:               |   |                |   |   |       |   |   |       |   |   |            |   |
|       U.      S. Government agencies  |   | $                   | 1,491  |   |       | $      | 45     |       |   | $      | -               |   |   | $ | 1,536 |   |
|       Mortgage-backed      securities |   |                | 34,318 |   |       |   | 185    |       |   |   | 51              |   |   |   | 34,452 |   |
|       State      and local political  |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|       subdivisions                    |   |                | 29,827 |   |       |   | 383    |       |   |   | 42              |   |   |   | 30,168 |   |
|                                                                |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|                                                                |   | $                   | 65,636 |   |       | $      | 613    |       |   | $      | 93              |   |   | $ | 66,156 |   |
|                                                                |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|    Securities      held-to maturity:                 |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|       State      and local political  |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|          subdivisions  |   | $                   | 7,235  |   |       | $      | 209    |       |   | $      | 2               |   |   | $ | 7,442 |   |
|                                                                |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
| December      31, 2006:                                             |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|    Securities      available-for-sale:               |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|       U.      S. Government agencies  |   | $                   | 5,486  |   |       | $      | 11     |       |   | $      | 56              |   |   | $ | 5,441 |   |
|       Mortgage-backed      securities |   |                | 21,170 |   |       |   | 35     |       |   |   | 290             |   |   |   | 20,915 |   |
|       State      and local political  |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|       subdivisions                    |   |                | 34,439 |   |       |   | 451    |       |   |   | 218             |   |   |   | 34,672 |   |
|                                                                |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|                                                                |   | $                   | 61,095 |   |       | $      | 497    |       |   | $      | 564             |   |   | $ | 61,028 |   |
|                                                                |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|    Securities      held-to maturity:                 |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|       State      and local political  |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |
|          subdivisions  |   | $                   | 7,850  |   |       | $      | 327    |       |   | $      | 27              |   |   | $ | 8,150 |   |
|                                                                |   |                |   |   |       |   |   |       |   |   |            |   |   |   |   |   |

----

|                                        |   | Available-For-Sale  |   |   | Held-to-Maturity |   |
|---------------------------------------------|--------|---------------------|--------|--------|------------------|--------|
|                                        |   | Amortized           |   |   | Estimated        |   |   | Amortized |   |   | Estimated |   |
|                                        |   | Cost                |   |   | Fair Value       |   |   | Cost |   |   | Fair Value |   |
|                                        |   | (In      thousands) |   |
|                                        |   |                |   |   |             |   |   |   |   |   |   |   |
| Due      in one year or less                |   | $                   | 3,000  |   |             | $      | 3,012 |   |   | $ | 220 |   |   | $ | 220 |   |
| Due      after one year through five years  |   |                | 13,565 |   |             |   | 13,729 |   |   |   | 995 |   |   |   | 996 |   |
| Due      after five years through ten years |   |                | 7,954  |   |             |   | 8,011 |   |   |   | 1,535 |   |   |   | 1,578 |   |
| Due      after 10 years                     |   |                | 6,799  |   |             |   | 6,952 |   |   |   | 4,485 |   |   |   | 4,648 |   |
| Mortgage-backed      securities             |   |                | 34,318 |   |             |   | 34,452 |   |   |   | - |   |   |   | - |   |
|                                        |   |                |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
|                                        |   | $                   | 65,636 |   |             | $      | 66,156 |   |   | $ | 7,235 |   |   | $ | 7,442 |   |

|                           |   | Losses < 12 Months |   |   | Losses 12 Months or > |   |   | Total  |   |
|--------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|--------|--------|
|                           |   |                  |   |   | Gross                    |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                           |   | Fair                  |   |   | Unrealized               |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                           |   | Value                 |   |   | Losses                   |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| 2007                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.      S. Government          |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    agencies     |   | $                     | -      |   |                     | $      | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Mortgage-backed                |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    securities   |   |                  | 3,699  |   |                     |   | 11     |   |   |   | 6,060 |   |   |   | 40 |   |   |   | 9,759 |   |   |   | 51 |   |
| State      and local political |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    subdivisions |   |                  | 3,696  |   |                     |   | 19     |   |   |   | 2,296 |   |   |   | 23 |   |   |   | 5,992 |   |   |   | 42 |   |
|                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | $                     | 7,395  |   |                     | $      | 30     |   |   | $ | 8,356 |   |   | $ | 63 |   |   | $ | 15,751 |   |   | $ | 93 |   |
|                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                           |   | Losses < 12 Months |   |   | Losses 12 Months or > |   |   | Total  |   |
|--------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|--------|--------|
|                           |   |                  |   |   | Gross                    |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                           |   | Fair                  |   |   | Unrealized               |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                           |   | Value                 |   |   | Losses                   |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| 2006                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.      S. Government          |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    agencies     |   | $                     | -      |   |                     | $      | -      |   |   | $ | 3,939 |   |   | $ | 56 |   |   | $ | 3,939 |   |   | $ | 56 |   |
| Mortgage-backed                |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    securities   |   |                  | 5,203  |   |                     |   | 20     |   |   |   | 13,218 |   |   |   | 270 |   |   |   | 18,421 |   |   |   | 290 |   |
| State      and local political |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    subdivisions |   |                  | 4,337  |   |                     |   | 18     |   |   |   | 14,095 |   |   |   | 200 |   |   |   | 18,432 |   |   |   | 218 |   |
|                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | $                     | 9,540  |   |                     | $      | 38     |   |   | $ | 31,252 |   |   | $ | 526 |   |   | $ | 40,792 |   |   | $ | 564 |   |

|                           |   | Losses < 12 Months |   |   | Losses 12 Months or > |   |   | Total  |   |
|--------------------------------|--------|-----------------------|--------|--------|--------------------------|--------|--------|--------|--------|
|                           |   |                  |   |   | Gross                    |   |   |   |   |   | Gross |   |   |   |   |   | Gross |   |
|                           |   | Fair                  |   |   | Unrealized               |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                           |   | Value                 |   |   | Losses                   |   |   | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| 2007                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State      and local political |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    subdivisions |   | $                     | -      |   |                     | $      | -      |   |   | $ | 693 |   |   | $ | 2 |   |   | $ | 693 |   |   | $ | 2 |   |
|                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2006                           |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State      and local political |   |                  |   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    subdivisions |   | $                     | -      |   |                     | $      | -      |   |   | $ | 1,538 |   |   | $ | 27 |   |   | $ | 1,538 |   |   | $ | 27 |   |

----

|                                            |   | December      31,   |    |
|-------------------------------------------------|--------|---------------------|---------|
|                                            |   | 2007                |    |   | 2006 |   |
|                                            |   | (In      thousands) |    |
| Commercial,      financial and agricultural     |   | $                   | 39,135  |   |   | $ | 38,349 |   |
| Real      estate - construction and development |   |                | 124,714 |   |   |   | 105,545 |   |
| Real      estate - mortgage                     |   |                | 151,998 |   |   |   | 153,525 |   |
| Installment      loans to individuals           |   |                | 24,624  |   |   |   | 26,858 |   |
| Other                                           |   |                | 2,718   |   |   |   | 2,381 |   |
|                                            |   |                | 343,189 |   |   |   | 326,658 |   |
| Less      allowance for loan losses             |   |                | (4,729  | ) |   |   | (4,334 | ) |
|                                            |   | $                   | 338,460 |   |   | $ | 322,324 |   |

|                                      |   | Years      Ended December 31, |   |
|-------------------------------------------|--------|-------------------------------|--------|
|                                      |   | 2004                          |   |   | 2006 |   |   | 2005 |   |
|                                      |   | (In      thousands)           |   |
| Balance      at beginning of year         |   | $                             | 4,334  |   |   | $ | 3,899 |   |   | $ | 3,598 |   |
| Charge-offs      during year              |   |                          | (2,400 | ) |   |   | (1,214 | ) |   |   | (1,617 | ) |
| Receoveries      on loans previously      |   |                          |   |   |   |   |   |   |   |   |   |   |
|    charged      off        |   |                          | 1,640  |   |   |   | 684 |   |   |   | 478 |   |
| Provision      charged to opening expense |   |                          | 1,155  |   |   |   | 965 |   |   |   | 1,440 |   |
|                                      |   |                          |   |   |   |   |   |   |   |   |   |   |
| Balance      at end of year               |   | $                             | 4,729  |   |   | $ | 4,334 |   |   | $ | 3,899 |   |

----

|                                                | Estimated      Useful |   | December      31,                   |
|-----------------------------------------------------|-----------------------|--------|-------------------------------------|
|                                                |  Life in Years   |   | 2007                                |   | 2006 |
|                                                |                  |   |                                | (In      thousands) |
| Land                                                |  -               |   |  $   6,347      |   |  $   4,734 |
| Buildings      and improvements                     | 10      - 40          |   |     16,825      |   |     16,935 |
| Furniture      and equipment                        | 3 -      10           |   |      7,059 |   |      6,936 |
|                                                |                  |   |                                |     30,231 |   |     28,605 |
| Less      accumulated depreciation and amortization |                  |   |                                |     (7,159) |   |     (6,636) |
|                                                |                  |   |                                |   |   |   |
|                                                |                  |   |                                |  $      23,072 |   |  $      21,969 |

| Year       |   | Amount |    |
|------------|--------|--------|---------|
| 2008       |   |   | 157,761 |   |
| 2009       |   |   | 2,805   |   |
| 2010       |   |   | 2,776   |   |
| 2011       |   |   | 918     |   |
| 2012       |   |   | 1,254   |   |
| Thereafter |   |   | 10,291  |   |
|       |   | $      | 175,805 |   |

----

|                            |   | December 31,        |   |
|---------------------------------|--------|---------------------|--------|
|                            |   | 2007                |   |   | 2006 |   |
|                            |   | (In      thousands) |   |
|                            |   |                |   |   |   |   |
| FHLB      Advances              |   | $                   | 23,082 |   |   | $ | 25,937 |   |
| Treasury      tax and loan note |   |                | 390    |   |   |   | 1,443 |   |
|                            |   |                |   |   |   |   |   |   |
|                            |   | $                   | 23,472 |   |   | $ | 27,380 |   |

| Year       |   | Amount              |   |
|------------|--------|---------------------|--------|
|       |   | (In      thousands) |   |
| 2008       |   | $                   | 1,655  |   |
| 2009       |   |                | 3,686  |   |
| 2010       |   |                | 718    |   |
| 2011       |   |                | 751    |   |
| 2012       |   |                | 8,787  |   |
| Thereafter |   |                | 7,485  |   |

----

|                                                             |   | Years      Ended December 31, |   |
|------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                             |   | 2007                          |   |   | 2006 |   |   | 2005 |   |
|                                                             |   | (      In thousands)          |   |
| Net      unrealized (losses) gains on                            |   |                          |   |   |   |   |   |   |   |
|    available-for-sale      securities             |   |                          | 138    |   |   |   | 88 |   |   |   | (1,273 | ) |
| Reclassification      adjustment for net losses                  |   |                          |   |   |   |   |   |   |   |   |   |   |
|    (gains)      realized in income                |   | $                             | 448    |   |   | $ | 253 |   |   | $ | 52 |   |
| Net      change in unrealized gains (losses)                     |   |                          | 586    |   |   |   | 341 |   |   |   | (1,221 | ) |
| Tax      effect                                                  |   |                          | (219   | ) |   |   | (127 | ) |   |   | 456 |   |
|                                                             |   |                          |   |   |   |   |   |   |   |   |   |   |
| Net      change in unrealized gains (losses) on                  |   |                          |   |   |   |   |   |   |   |   |   |   |
|    securities      available-for-sale, net of tax |   | $                             | 367    |   |   | $ | 214 |   |   | $ | (765 | ) |

----

|                      |   | Years      Ended December 31, |   |
|---------------------------|--------|-------------------------------|--------|
|                      |   | 2007                          |   |   | 2006 |   |   | 2005 |   |
|                      |   | (In      thousands)           |   |
|                      |   |                          |   |   |   |   |   |   |   |
| Current:                  |   |                          |   |   |   |   |   |   |   |
|    Federal |   | $                             | 2,672  |   |   | $ | 2,820 |   |   | $ | 2,352 |   |
|    State   |   |                          | 432    |   |   |   | 451 |   |   |   | 378 |   |
| Deferred                  |   |                          | 51     |   |   |   | 78 |   |   |   | (23 | ) |
|                      |   |                          |   |   |   |   |   |   |   |   |   |   |
|                      |   | $                             | 3,155  |   |   | $ | 3,349 |   |   | $ | 2,707 |   |

|                                                              |   | Years      Ended December 31, |   |
|-------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                              |   | 2007                          |   |   | 2006 |   |   | 2005 |   |
|                                                              |   | (In      thousands)           |   |
|                                                              |   |                          |   |   |   |   |   |   |   |
| Tax      on income before income taxes                            |   | $                             | 3,601  |   |   | $ | 3,600 |   |   | $ | 3,167 |   |
|                                                              |   |                          |   |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) resulting from:                          |   |                          |   |   |   |   |   |   |   |   |   |   |
|    Tax-exempt      income                          |   |                          | (630   | ) |   |   | (636 | ) |   |   | (719 | ) |
|    Disallowed      interest expense                |   |                          | 74     |   |   |   | 72 |   |   |   | 54 |   |
|    State      income taxes, net of federal benefit |   |                          | 285    |   |   |   | 298 |   |   |   | 250 |   |
|    Other,      net                                 |   |                          | (174   | ) |   |   | 15 |   |   |   | (45 | ) |
|                                                              |   |                          |   |   |   |   |   |   |   |   |   |   |
|                                                              |   | $                             | 3,155  |   |   | $ | 3,349 |   |   | $ | 2,707 |   |

----

|                                                        |   | December      31,    |   |
|-------------------------------------------------------------|--------|----------------------|--------|
|                                                        |   | 2007                 |   |   | 2006 |   |
|                                                        |   | (      In thousands) |   |
| Deferred      tax assets:                                   |   |                 |   |   |   |   |
|    Allowance      for loan losses            |   | $                    | 1,500  |   |   | $ | 1,429 |   |
|    Unrealized      loss on secuities         |   |                 | -      |   |   |   | 25 |   |
|       available      for sale |   |                 |   |   |   |   |   |   |
|    Other                                     |   |                 | 21     |   |   |   | 17 |   |
|                                                        |   |                 | 1,521  |   |   |   | 1,471 |   |
|                                                        |   |                 |   |   |   |   |   |   |
| Deferred      tax liabilities                               |   |                 |   |   |   |   |   |   |
|    Premises      and equipment               |   |                 | (156   | ) |   |   | (163 | ) |
|    Unrealized      gain on securities        |   |                 |   |   |   |   |   |   |
|       available      for sale |   |                 | (194   | ) |   |   | - |   |
|    Other                                     |   |                 | (963   | ) |   |   | (830 | ) |
|                                                        |   |                 | (1,313 | ) |   |   | (993 | ) |
|                                                        |   |                 |   |   |   |   |   |   |
| Net      deferred tax asset (liability)                     |   | $                    | 208    |   |   | $ | 478 |   |

|                              |   | Contractual      Amount |   |
|-----------------------------------|--------|-------------------------|--------|
|                              |   | 2007                    |   |   | 2006 |   |
|                              |   | (In      thousands)     |   |
|                              |   |                    |   |   |   |   |
| Commitments      to extend credit |   | $                       | 48,799 |   |   | $ | 38,356 |   |
| Credit      card arrangements     |   |                    | 2,491  |   |   |   | 2,352 |   |
| Letters      of credit            |   |                    | 18,910 |   |   |   | 15,961 |   |

----

| Year   |   | Amount |   |
|--------|--------|--------|--------|
|   |   |   |   |
| 2008   |   | $      | 10,200 |   |
| 2009   |   |   | 10,200 |   |
| 2010   |   |   | 10,200 |   |
| 2011   |   |   | 10,200 |   |
| 2012   |   |   | 10,200 |   |
|   |   |   |   |   |
|   |   | $      | 51,000 |   |

----

|                                     |   | Security      Capital |   |   |   |   |   |   |   |
|------------------------------------------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
|                                     |   | Corporation           |   |   |   |   |   |   |   |
|                                     |   | (Consolidated)        |   |   | Bank   |   |
|                                     |   | Amount                |   |   | Ratio  |   |   | Amount |   |   | Ratio |   |
|                                     |   | ($      In thousands) |   |
| December      31, 2007                   |   |                  |   |   |   |   |   |   |   |   |   |   |
|    Total      risk-based  |   | $                     | 57,805 |   |   |   | 15.3   | %      |   | $ | 55,152 |   |   |   | 14.7 | % |
|    Tier      1 risk-based |   |                  | 53,106 |   |   |   | 14.1   | %      |   |   | 50,453 |   |   |   | 13.4 | % |
|    Tier      1 leverage   |   |                  | 53,106 |   |   |   | 11.1   | %      |   |   | 50,453 |   |   |   | 10.6 | % |
|                                     |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2006                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total      risk-based  |   | $                     | 52,485 |   |   |   | 14.7   | %      |   | $ | 50,503 |   |   |   | 14.2 | % |
|    Tier      1 risk-based |   |                  | 48,151 |   |   |   | 13.5   | %      |   |   | 46,169 |   |   |   | 13.0 | % |
|    Tier      1 leverage   |   |                  | 48,151 |   |   |   | 10.6   | %      |   |   | 46,169 |   |   |   | 10.2 | % |

----

|                                     |   | Security      Capital |   |   |   |   |   |   |   |
|------------------------------------------|--------|-----------------------|--------|--------|--------|--------|--------|--------|--------|
|                                     |   | Corporation           |   |   |   |   |   |   |   |
|                                     |   | (Consolidated)        |   |   | Bank   |   |
|                                     |   | Amount                |   |   | Ratio  |   |   | Amount |   |   | Ratio |   |
|                                     |   | (In      thousands)   |   |
|                                     |   |                  |   |   |   |   |   |   |   |   |   |   |
| December      31, 2007                   |   |                  |   |   |   |   |   |   |   |   |   |   |
|    Total      risk-based  |   | $                     | 30,229 |   |   |   | 8.0    | %      |   | $ | 30,071 |   |   |   | 8.0 | % |
|    Tier      1 risk-based |   |                  | 15,114 |   |   |   | 4.0    | %      |   |   | 15,035 |   |   |   | 4.0 | % |
|    Tier      1 leverage   |   |                  | 14,407 |   |   |   | 3.0    | %      |   |   | 14,348 |   |   |   | 3.0 | % |
|                                     |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December      31, 2006                   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total      risk-based  |   | $                     | 28,534 |   |   |   | 8.0    | %      |   | $ | 28,376 |   |   |   | 8.0 | % |
|    Tier      1 risk-based |   |                  | 14,267 |   |   |   | 4.0    | %      |   |   | 14,188 |   |   |   | 4.0 | % |
|    Tier      1 leverage   |   |                  | 13,645 |   |   |   | 3.0    | %      |   |   | 13,586 |   |   |   | 3.0 | % |

----

|                                                 |   | December 31, 2007   |    |   | December 31, 2006   |   |
|------------------------------------------------------|--------|---------------------|---------|--------|---------------------|--------|
|                                                 |   | Carrying            |    |   | Estimated           |   |   | Carrying |   |   | Estimated |   |
|                                                 |   | Amount              |    |   | Fair Value          |   |   | Amount |   |   | Fair Value |   |
|                                                 |   | (In      thousands) |    |   | (In      thousands) |   |
|                                                 |   |                |    |   |                |   |   |   |   |   |   |   |
| Financial      assets:                               |   |                |    |   |                |   |   |   |   |   |   |   |
|    Cash      and cash equivalents     |   | $                   | 19,806  |   |                | $      | 19,806 |   |   | $ | 23,447 |   |   | $ | 23,447 |   |
|    Certificates      of deposit with  |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
|       other      banks |   |                | 198     |   |                |   | 198 |   |   |   | 198 |   |   |   | 198 |   |
|    Securities      available-for-sale |   |                | 66,156  |   |                |   | 66,156 |   |   |   | 61,028 |   |   |   | 61,028 |   |
|    Securities      held-to-maturity   |   |                | 7,235   |   |                |   | 7,442 |   |   |   | 7,850 |   |   |   | 8,150 |   |
|    Securities,      other             |   |                | 2,028   |   |                |   | 2,028 |   |   |   | 2,250 |   |   |   | 2,250 |   |
|    Loans                              |   |                | 343,189 |   |                |   | 345,138 |   |   |   | 326,658 |   |   |   | 327,008 |   |
| Financial      liabilities:                          |   |                |    |   |                |   |   |   |   |   |   |   |   |   |   |   |
|    Noninterest-bearing      deposits  |   |                | 58,373  |   |                |   | 58,373 |   |   |   | 59,380 |   |   |   | 59,380 |   |
|    Interest-bearing      deposits     |   |                | 330,360 |   |                |   | 333,457 |   |   |   | 307,319 |   |   |   | 306,118 |   |
|    FHLB      and other borrowings     |   |                | 27,472  |   |                |   | 25,424 |   |   |   | 35,380 |   |   |   | 33,935 |   |

----

|                               |  Description                                  | Level      I | Level      II | Total |
|------------------------------------|----------------------------------------------------|--------------|---------------|-------|
| Available-for-sale      securities | $        - | $66,156      | $66,156       |

|                                      |   | December 31,        |   |
|-------------------------------------------|--------|---------------------|--------|
|                                      |   | 2007                |   |   | 2006 |   |
|                                      |   | (In      thousands) |   |
|                                      |   |                |   |   |   |   |
| Assets                                    |   |                |   |   |   |   |
| Cash      and cash equivalents            |   | $                   | 531    |   |   | $ | 50 |   |
| Investment      in subsidiaries           |   |                | 55,206 |   |   |   | 50,515 |   |
| Land      and buildings                   |   |                | 1,924  |   |   |   | 1,924 |   |
| Other      assets                         |   |                | 279    |   |   |   | 401 |   |
|                                      |   | $                   | 57,940 |   |   | $ | 52,890 |   |
|                                      |   |                |   |   |   |   |   |   |
| Liabilities      and Shareholders' Equity |   |                |   |   |   |   |   |   |
| Notes      payable                        |   | $                   | 790    |   |   | $ | 815 |   |
| Other      liabilities                    |   |                | 211    |   |   |   | 91 |   |
| Shareholders'      equity                 |   |                | 56,939 |   |   |   | 51,984 |   |
|                                      |   | $                   | 57,940 |   |   | $ | 52,890 |   |

----

|                                                          |   | Years Ended December 31, |   |
|---------------------------------------------------------------|--------|--------------------------|--------|
|                                                          |   | 2007                     |   |   | 2006 |   |   | 2005 |   |
|                                                          |   | (In      thousands)      |   |
|                                                          |   |                     |   |   |   |   |   |   |   |
| Income                                                        |   |                     |   |   |   |   |   |   |   |
| Dividends      from subsidiary                                |   | $                        | 3,300  |   |   | $ | 2,888 |   |   | $ | 2,695 |   |
| Other                                                         |   |                     | 123    |   |   |   | 89 |   |   |   | 53 |   |
|                                                          |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                          |   |                     | 3,423  |   |   |   | 2,977 |   |   |   | 2,748 |   |
|                                                          |   |                     |   |   |   |   |   |   |   |   |   |   |
| Expense      (total)                                          |   |                     | 311    |   |   |   | 425 |   |   |   | 202 |   |
|                                                          |   |                     |   |   |   |   |   |   |   |   |   |   |
| Income      before income taxes and equity in                 |   |                     |   |   |   |   |   |   |   |   |   |   |
|    undistributed      earnings of subsidiaries |   |                     | 3,112  |   |   |   | 2,552 |   |   |   | 2,546 |   |
| Income      tax (expense) benefit                             |   |                     | 70     |   |   |   | 61 |   |   |   | 56 |   |
| Income      before equity in undistributed earnings           |   |                     |   |   |   |   |   |   |   |   |   |   |
|    of      subsidiaries                        |   |                     | 3,182  |   |   |   | 2,613 |   |   |   | 2,602 |   |
| Equity      in undistributed earnings of subsidiaries         |   |                     |   |   |   |   |   |   |   |   |   |   |
|    in      excess of dividends                 |   |                     | 4,253  |   |   |   | 4,627 |   |   |   | 4,005 |   |
|                                                          |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net      income                                               |   | $                        | 7,435  |   |   | $ | 7,240 |   |   | $ | 6,607 |   |

----

|                                                      |   | Years Ended December 31, |   |
|-----------------------------------------------------------|--------|--------------------------|--------|
|                                                      |   | 2007                     |   |   | 2006 |   |   | 2005 |   |
|                                                      |   | (In      thousands)      |   |
|                                                      |   |                     |   |   |   |   |   |   |   |
| Cash      Flows from Operating Activities                 |   |                     |   |   |   |   |   |   |   |
| Net      income                                           |   | $                        | 7,435  |   |   | $ | 7,240 |   |   | $ | 6,607 |   |
| Equity      in subsidiaries' earnings                     |   |                     | (4,253 | ) |   |   | (4,572 | ) |   |   | (4,005 | ) |
| Other,      net                                           |   |                     | 63     |   |   |   | (74 | ) |   |   | 80 |   |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net      cash provided by operating activities            |   |                     | 3,245  |   |   |   | 2,594 |   |   |   | 2,682 |   |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cash      Flows From Investing Activities                 |   |                     |   |   |   |   |   |   |   |   |   |   |
| Purchases      of assets                                  |   |                     | -      |   |   |   | (195 | ) |   |   | (1,179 | ) |
| Proceeds      from sale of other asset                    |   |                     | -      |   |   |   | 440 |   |   |   | - |   |
| Other,      net                                           |   |                     | 108    |   |   |   | - |   |   |   | (2 | ) |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net      cash provided by (used in) investing activities  |   |                     |   |   |   |   |   |   |   |   |   |   |
|    of      subsidiaries                    |   |                     | 108    |   |   |   | 245 |   |   |   | (1,181 | ) |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cash      Flows From Financing Activities                 |   |                     |   |   |   |   |   |   |   |   |   |   |
| Dividends      paid on common stock                       |   |                     | (2,882 | ) |   |   | (2,744 | ) |   |   | (2,611 | ) |
| Proceeds      from debt obligations                       |   |                     | -      |   |   |   | - |   |   |   | 930 |   |
| Repayment      of debit obligations                       |   |                     | (25    | ) |   |   | (155 | ) |   |   |   |   |
| Other,      net                                           |   |                     | 35     |   |   |   | 87 |   |   |   | 87 |   |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net      cash used in financing activities                |   |                     | (2,872 | ) |   |   | (2,812 | ) |   |   | (1,594 | ) |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in cash and cash equivalents |   |                     | 481    |   |   |   | 27 |   |   |   | (93 | ) |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at beginning of year       |   |                     | 50     |   |   |   | 23 |   |   |   | 116 |   |
|                                                      |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cash      and cash equivalents at end of year             |   | $                        | 531    |   |   | $ | 50 |   |   | $ | 23 |   |

----

|                                             |   | Three Months Ended                         |   |
|--------------------------------------------------|--------|--------------------------------------------|--------|
|                                             |   | Mar. 31                                    |   |   | 30-Jun |   |   | Sept. 30 |   |   | Dec. 31 |   |
|                                             |   | (In      thousands, except per share data) |   |
|                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |
| 2007                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Total      interest income                       |   | $                                          | 8,147  |   |   | $ | 8,645 |   |   | $ | 8,814 |   |   | $ | 8,527 |   |
| Total      interest expense                      |   |                                       | 3,242  |   |   |   | 3,513 |   |   |   | 3,459 |   |   |   | 3,485 |   |
|    Net      interest income       |   |                                       | 4,905  |   |   |   | 5,132 |   |   |   | 5,355 |   |   |   | 5,042 |   |
| Provision      for loan losses                   |   |                                       | 273    |   |   |   | 161 |   |   |   | 273 |   |   |   | 448 |   |
| Net      interest income after                   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    provision      for loan losses |   |                                       | 4,632  |   |   |   | 4,971 |   |   |   | 5,082 |   |   |   | 4,594 |   |
| Total      noninterest income, excluding         |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    securities      gains (losses) |   |                                       | 1,771  |   |   |   | 1,774 |   |   |   | 1,744 |   |   |   | 2,008 |   |
| Securities      gains (losses)                   |   |                                       | (448   | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Total      noninterest expenses                  |   |                                       | 3,739  |   |   |   | 4,018 |   |   |   | 3,705 |   |   |   | 4,076 |   |
| Income      taxes                                |   |                                       | 700    |   |   |   | 831 |   |   |   | 804 |   |   |   | 820 |   |
|                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                  |   | $                                          | 1,516  |   |   | $ | 1,896 |   |   | $ | 2,317 |   |   | $ | 1,706 |   |
|                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per      share:  (1)                   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      income                |   | $                                          | 0.53   |   |   | $ | 0.66 |   |   | $ | 0.80 |   |   | $ | 0.59 |   |
|    Cash      dividends declared   |   |                                       | -      |   |   |   | - |   |   |   | - |   |   |   | 1.00 |   |

----

|                                             |   | Three Months Ended                         |   |
|--------------------------------------------------|--------|--------------------------------------------|--------|
|                                             |   | Mar. 31                                    |   |   | 30-Jun |   |   | Sept. 30 |   |   | Dec. 31 |   |
|                                             |   | (In      thousands, except per share data) |   |
|                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |
| 2006                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |
| Total      interest income                       |   | $                                          | 7,006  |   |   | $ | 7,685 |   |   | $ | 8,081 |   |   | $ | 7,814 |   |
| Total      interest expense                      |   |                                       | 2,319  |   |   |   | 2,669 |   |   |   | 3,198 |   |   |   | 3,337 |   |
|    Net      interest income       |   |                                       | 4,687  |   |   |   | 5,016 |   |   |   | 4,883 |   |   |   | 4,477 |   |
| Provision      for loan losses                   |   |                                       | 241    |   |   |   | 242 |   |   |   | 241 |   |   |   | 241 |   |
| Net      interest income after                   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    provision      for loan losses |   |                                       | 4,446  |   |   |   | 4,774 |   |   |   | 4,642 |   |   |   | 4,236 |   |
| Total      noninterest income, excluding         |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    securities      gains (losses) |   |                                       | 1,597  |   |   |   | 1,561 |   |   |   | 1,705 |   |   |   | 2,316 |   |
| Securities      gains (losses)                   |   |                                       | (13    | ) |   |   | 6 |   |   |   | 28 |   |   |   | (274 | ) |
| Total      noninterest expenses                  |   |                                       | 3,451  |   |   |   | 3,587 |   |   |   | 3,537 |   |   |   | 3,860 |   |
| Income      taxes                                |   |                                       | 797    |   |   |   | 927 |   |   |   | 926 |   |   |   | 699 |   |
|                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                  |   | $                                          | 1,782  |   |   | $ | 1,827 |   |   | $ | 1,912 |   |   | $ | 1,719 |   |
|                                             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per      share:  (1)                   |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Net      income                |   | $                                          | 0.62   |   |   | $ | 0.63 |   |   | $ | 0.66 |   |   | $ | 0.60 |   |
|    Cash      dividends declared   |   |                                       | -      |   |   |   | - |   |   |   | - |   |   |   | 1.00 |   |

----

----

----

| ITEM      15. | EXHIBITS      AND FINANCIAL STATEMENT SCHEDULES |
|---------------|-------------------------------------------------|

| (a)   | Independent      Registered Public Accountants’Report |
|-----------------|-------------------------------------------------------------|

| (b)   | Consolidated      Financial Statements – See the Financial Statements included in Item      8. |
|-----------------|------------------------------------------------------------------------------------------------------|

| (c)   | Financial      Statement Schedules – Financial statement schedules are omitted for the      reason that they are not required or are not applicable, or the required      information is included in the financial  statements. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (d)   | Exhibits      – The exhibits filed as part of this Annual Report on Form 10-K are      identified in the Exhibit Index, which Exhibit Index specifically      identifies those exhibits that describe or evidence all management      contracts and compensation plans or arrangements required to be filed as      exhibits to this report.  Such Exhibit Index is incorporated      herein by reference. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Date:      March 14, 2008 | By        /s/      Frank West |
|---------------------------|-----------------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   |   | /s/      Larry Pratt, Director |
|--------|--------|--------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Frank West, Director |
|--------|-------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Laney Funderburk, Director |
|--------|-------------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Joe Brown, Director |
|--------|------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Ben Smith, Director |
|--------|------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Ken Murphree, Director |
|--------|---------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Will Hays, Director |
|--------|------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Steve Ballard, Director |
|--------|----------------------------------|

|   | DATE: | March 14,      2008 |
|--------|-------|---------------------|

|   | /s/      Tony Jones, Director |
|--------|-------------------------------|

----

| Exhibit      Index |
|--------------------|
|               |   |   |
|               |   | Reference      to |
|               |   | Prior      Filing or |
| Exhibit            |   | Exhibit      Number |
|  Number       |  Document |  Attached Hereto |
| 3.1                | Registrant's      Articles of Incorporation | * |
|               |   |   |
| 3.2                | Registrant's      Bylaws | * |
|               |   |   |
| 21                 | Subsidiaries      of the registrant | 21 |
|               |   |   |
| 31.1               | Rule      13a-14(a) Certification of the Company's President | 31.1 |
|               | and      Chief Executive Officer |   |
|               |   |   |
| 31.2               | Rule      13a-14(a) Certification of the Company's Chief | 31.2 |
|               | Financial      Officer |   |
|               |   |   |
| 32.1               | Section      1350 Certification of the Company’s President | 32.1 |
|               | and      Chief Executive Officer |   |
|               |   |   |
| 32.2               | Section      1350 Certification of the Company’s Chief | 32.2 |
|               | Financial      Officer |   |
|               |   |   |
|               |   |   |
| *                  | Filed      on March 31, 2003, as an exhibit to the Registrant’s Registration      Statement |   |
|               | on      Form 10-SB (File No. 000-50224),and incorporated herein by      reference |   |

----

----