----

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**United        States **

**Securities        and Exchange Commission**

**Washington,        D.C. 20549**

**FORM        10-KSB**

**Tennessee        Valley Financial Holdings, Inc**

| ** Tennessee**                                                                                              |  **45-0471419**                                                |
|------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------|
|  (State                    or other jurisdiction of incorporation or                    organization)  |   (I.R.S.                    Employer Identification No.) |

| ** 401                    South Illinois Avenue Oak Ridge, TN** | ** 37830**                     |
|----------------------------------------------------------------------|-------------------------------------|
|  (Address                    of Principal Executive Offices)    |  (Zip                    Code) |

**865-483-9444**

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**Table        of Contents**

|                  **Part                  I:** |                                                               |      |
|----------------------------------------------------|--------------------------------------------------------------------|-----------|
|  **Item                1:**                   | Description                of Business                             |  3-8 |
|  **Item                2:**                   | Description                of Property                             |  8   |
|  **Item                3:**                   | Legal                Proceedings                                   |  8   |
|  **Item                  4:**                 | Submission                of Matters to a Vote of Security Holders |  8   |

|  **Part                II:**  |                                                                                                                                                   |        |
|------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|-------------|
|  **Item                5:**   | Market                for Common Equity, Related Stockholder Matters and Small                Business Issuer Purchases of Equity Securities |  9     |
|  **Item                  6:** | Management’s                  Discussion and Analysis or Plan of Operation                                                                       |  10-21 |
|  **Item                7:**   | Financial                Statements                                                                                                                    |  22-42 |

|  **Item                8:**                | Changes                in and Disagreements with Accountants on Accounting and Financial                Disclosure                                                 |  43 |
|-----------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
|  **Item                8A:**                    | Controls                and Procedures                                                                                                                             |  43 |
|  **Item                8B:**                         | Other                Information                                                                                                                              |  43 |
|                                                      |                                                                                                                                                               |     |
|  **Part                III**                         |                                                                                                                                                               |     |
|  **Item                9:**                          |  Directors,                Executive Officers, Promoters and Control Persons; Compliance with                Section                16(a) of the Exchange Act |  43 |
|  **Item                10:**                         |                      Executive Compensation                                                                                               |  43 |
|  **Item                11:**                         |       Security                Ownership of Certain Beneficial Owners and Management                                                  |  43 |
|  **and**                                             |  Related                Stockholders Matters                                                                                                                  |  43 |
|  **Item                12:**                         |                      Certain Relationships and Related Transactions                                                                       |  43 |
| ** Item                13:**     |   Exhibits                                                                                                                                               |  44 |
| ** Item                14:**                         |  Principal                Accountant Fees and Services                                                                                    |  44 |

|  **Signatures** |   |   |
|----------------------|--------|--------|

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**PART        I**

**Item        1.  Description of Business**

**General**

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**Market        Area**

**Employees**

**Loan        Activities**

*General*

*Loan        Underwriting*

*General        Loan Policies*

----

*Residential        Real Estate Loans.*

*Consumer        Loans*

*Commercial        Business Loans*

*Commercial        Real Estate Loans.*

*Income        from Loan Activities*

*Nonperforming        Loans and Real Estate Owned*

----

**Competition**

**Supervision        and Regulation**

| ·  |  acquiring more than 5% of the voting shares of any bank,                  or |
|--------------|------------------------------------------------------------------------------------|

| ·  |  acquiring all or substantially all of the assets of a bank,                  and |
|--------------|----------------------------------------------------------------------------------------|

| ·  |  before                    merging or consolidating with another bank                    holding company. |
|--------------|----------------------------------------------------------------------------------------------------------------|

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**Financial        Modernization Legislation**

**The        Bank**

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**Payment        of Dividends**

**Item        2.   Description of        Property**

**Item        3.  Legal Proceedings**

**Item        4.  Submission of Matters to a Vote of Security        Holders**

**PART        II**

**Item        5.  Market for Common Equity, Related Stockholder        Matters and Small Business Issuer Purchases of Equity        Securities **

** **

|                                                        |   |  High |   |  Low |   |
|-------------------------------------------------------------|--------|------------|--------|-----------|--------|
|  2004:                                                 |   |       |   |      |   |
|      First                Quarter  |   | $          | 19.50  |      | $      | 19.50 |   |
|      Second                Quarter |   |       | 19.50  |      |   | 19.50 |   |
|      Third                Quarter  |   |       | 19.50  |      |   | 19.50 |   |
|      Fourth                Quarter |   |       | 19.50  |      |   | 19.50 |   |
|  2005:                                                 |   |       |   |      |   |   |   |
|      First                Quarter  |   | $          | 26.00  |      | $      | 26.00 |   |
|      Second                Quarter |   |       | 26.00  |      |   | 26.00 |   |
|      Third                Quarter  |   |       | 26.00  |      |   | 26.00 |   |
|      Fourth                Quarter |   |       | 28.00  |      |   | 28.00 |   |

----

| **EQUITY                  COMPENSATION PLAN                  INFORMATION**                              |
|---------------------------------------------------------------------------------------------------------|
|   **Plan                  Category**                                                          | **Number                  of securities to be issued upon exercise of                  outstanding options, warrants and rights** | **Weighted-average                  exercise price of outstanding                  options, warrants and rights** | **Number                  of securities remaining available for future                  issuance under****equity compensation                  plan** |
| Equity                  compensationplans                  approved byshareholders                      |  53,980 |  $23.69 |  72,723 |
| Equity                  compensationplans                  not approvedby                  shareholders |  0______________ |  NA______________ |  0______________ |
| Total                                                                                                   | 53,980 | $23.69 | 72,723 |

**Item        6.  Management's Discussion and Analysis or Plan of        Operation**

**Forward        Looking Statements**

| ·   | Economic                  conditions (both generally and more specifically in                  the markets in which we operate); |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

| ·   | Competition                  for our customers from other providers of                  financial services; |
|--------------------|-------------------------------------------------------------------------------------------------------------|

| ·   | Government                  legislation and regulation (which changes from                  time to time and over which we have no                  control); |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Changes                  in interest rates;                  and |
|--------------------|------------------------------------------------------------------|

| ·   | Material                  unforeseen changes in liquidity, results of                  operations, or financial condition of our                  customers. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Results        of Operations for the Years Ended December 31, 2005        and 2004**

**General**

----

| **Schedule                  I**                   |
|---------------------------------------------------|
| **Return                  on Assets and Equity**  |
|                                              | 2005 | 2004 |   |
| Return                  on average assets         | 0.67% | 0.82% |   |
| Return                  on average equity         | 8.36% | 10.85% |   |
| Dividend                  payout ratio            | 16.04% | 14.44% |   |
| Average                  equity to average assets | 8.06% | 7.54% |   |

----

**Earning        Assets, Sources of Funds and Net Interest        Income**

| **Schedule                  II**                                         |   |
|--------------------------------------------------------------------------|--------|
| **Average                  Balances, Interest and Rate/Yield**           |   |
|                                                                     |   | 2005 |   | 2004 |   |
|                                                                     |   | Average                  Balance(1) |   | Interest                  (2) |   | Average                  Yield/Rate |   | Average                  Balance (1) |   | Interest                  (2) |   | Average                  Yield/Rate |   |
| **Assets**                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal                  funds sold                                      |   | $ | 6,353 |   | $ | 201 |   |   | 3.16 | % | $ | 1,318 |   | $ | 18 |   |   | 1.37 | % |
| Investment                  securities:                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available                  for sale:                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                                  |   |   | 10,696 |   |   | 364 |   |   | 3.40 | % |   | 9,115 |   |   | 289 |   |   | 3.17 | % |
| Tax                  exempt                                              |   |   | 6,279 |   |   | 302 |   |   | 4.81 | % |   | 5,268 |   |   | 266 |   |   | 5.05 | % |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB                  Stock                                              |   |   | 587 |   |   | 27 |   |   | 4.60 | % |   | 562 |   |   | 23 |   |   | 4.09 | % |
| Gross                  loans, including fees                             |   |   | 107,315 |   |   | 7,884 |   |   | 7.35 | % |   | 94,204 |   |   | 6,318 |   |   | 6.71 | % |
| Total                  interest earning assets                           |   |   | 131,230 |   | $ | 8,778 |   |   | 6.69 | % |   | 110,467 |   | $ | 6,914 |   |   | 6.26 | % |
| Cash                  and due from banks                                 |   |   | 2,498 |   |   |   |   |   |   |   |   | 2,028 |   |   |   |   |   |   |   |
| All                  other assets                                        |   |   | 6,574 |   |   |   |   |   |   |   |   | 5,986 |   |   |   |   |   |   |   |
| Less:                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reserve                  for loan losses                                 |   |   | 1,317 |   |   |   |   |   |   |   |   | 1,257 |   |   |   |   |   |   |   |
| Unearned                  fees and interest                              |   |   | 135 |   |   |   |   |   |   |   |   | 130 |   |   |   |   |   |   |   |
| **Total                  Assets**                                        |   | $ | 138,850 |   |   |   |   |   |   |   | $ | 117,094 |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                  and Shareholders' Equity**                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  bearing deposits:                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Time                  deposits                                           |   | $ | 60,422 |   | $ | 2,054 |   |   | 3.40 | % | $ | 45,515 |   | $ | 1,214 |   |   | 2.67 | % |
| Other                  deposits                                          |   |   | 46,097 |   |   | 671 |   |   | 1.46 | % |   | 43,467 |   |   | 408 |   |   | 0.94 | % |
| FHLB                  advances and repurchase agreements and other       |   |   | 10,896 |   |   | 368 |   |   | 3.38 | % |   | 9,392 |   |   | 362 |   |   | 3.85 | % |
| Total                  interest-bearing liabilities                      |   | $ | 117,415 |   | $ | 3,093 |   |   | 2.63 | % | $ | 98,374 |   | $ | 1,984 |   |   | 2.02 | % |
| Non-interest                  bearing deposits                           |   |   | 10,850 |   |   |   |   |   |   |   |   | 9,296 |   |   |   |   |   |   |   |
| Cost                  of funds                                           |   |   |   |   |   |   |   |   | 2.41 | % |   |   |   |   |   |   |   | 1.84 | % |
| All                  other liabilities                                   |   |   | 893 |   |   |   |   |   |   |   |   | 595 |   |   |   |   |   |   |   |
| Shareholders'                  equity                                    |   |   | 9,686 |   |   |   |   |   |   |   |   | 8,764 |   |   |   |   |   |   |   |
| Unrealized                  gain (loss) on available for sale securities |   |   | 6 |   |   |   |   |   |   |   |   | 65 |   |   |   |   |   |   |   |
| Total                  Liabilities and Shareholders' Equity              |   | $ | 138,850 |   |   |   |   |   |   |   | $ | 117,094 |   |   |   |   |   |   |   |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest spread                                     |   |   |   |   |   |   |   |   | 4.28 | % |   |   |   |   |   |   |   | 4.42 | % |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                  interest margin                                     |   |   |   |   |   |   |   |   | 4.33 | % |   |   |   |   |   |   |   | 4.46 | % |
|                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| (1)   | Average                  Balances were computed averaging daily balances for                  the time specified. |
|-----------------|-------------------------------------------------------------------------------------------------------------------|

| (2)   | Interest                  is computed based on a tax equivalent basis for tax                  exempt securities. |
|-----------------|-------------------------------------------------------------------------------------------------------------------|

----

----

| **Schedule                  III**                                                |   |
|----------------------------------------------------------------------------------|--------|
| **Rate                  Volume Analysis (in thousands)**                         |   |
|                                                                             |   | 2005                  vs. 2004 |   |
|                                                                             |   | Increase                  (decrease) due to change in: |   |
|                                                                             |   |   | Average                  Balance |   |   | Rate/Yield |   |   | Total |   |
| **Interest                  Income**                                             |   |   |   |   |   |   |   |   |   |   |
| Federal                  funds sold                                              |   |   | 136 |   |   | 47 |   |   | 183 |   |
| Securities                  available for sale                                   |   |   | 99 |   |   | 12 |   |   | 111 |   |
| FHLB                  stock                                                      |   |   | 1 |   |   | 3 |   |   | 4 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |
| Loans,                  including fees                                           |   |   | 929 |   |   | 637 |   |   | 1,566 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |
| Total                  interest income                                           |   |   | 1,165 |   |   | 699 |   |   | 1,864 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |
| **Interest                  Expense**                                            |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing                  deposits                                       |   |   | 367 |   |   | 736 |   |   | 1,103 |   |
| FHLB                  advances, Repurchase Agreements and                  other |   |   | 96 |   |   | 6 |   |   | 102 |   |
| Total                  interest expense                                          |   |   | 463 |   |   | 742 |   |   | 1,205 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |
| Net                  change in net interest income                               |   |   | 702 |   |   | (43 | ) |   | 659 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |

**Non-Interest        Income**

----

**Non-Interest        Expense**

**Income        Taxes**

*Accounting for Income Taxes*

**Loan        Losses and Credit Risk**

----

|  **Schedule                  IV**                                 |   |
|------------------------------------------------------------------------|--------|
| **Analysis                  of Loan Loss Reserve (in thousands)**      |   |
|                                                                   |   | The                  year ended December 31, |   |
|                                                                   |   | 2005 |   | 2004 |   |
| **Balance                  at Beginning of Period**                    |   | $ | 1,271 |   | $ | 1,283 |   |
| Charge-Offs:                                                           |   |   |   |   |   |   |   |
| Commercial,                  financial and agricultural                |   |   | 2 |   |   | 28 |   |
| Real                  Estate - construction                            |   |   |   |   |   |   |   |
| Real                  estate - mortgage                                |   |   | 240 |   |   | 63 |   |
| Installment                  - consumer                                |   |   | 205 |   |   | 182 |   |
| Other                                                                  |   |   | - |   |   | - |   |
| Total                  charge-offs                                     |   |   | 447 |   |   | 273 |   |
|                                                                   |   |   |   |   |   |   |   |
| Recoveries:                                                            |   |   |   |   |   |   |   |
| Commercial,                  financial and agricultural                |   |   | - |   |   | - |   |
| Real                  Estate - construction                            |   |   | - |   |   | - |   |
| Real                  estate - mortgage                                |   |   | 30 |   |   | 5 |   |
| Installment                  - consumer                                |   |   | 1 |   |   | 27 |   |
| Other                                                                  |   |   | - |   |   | - |   |
| Total                  recoveries                                      |   |   | 31 |   |   | 32 |   |
| Net                  charge-offs                                       |   |   | 416 |   |   | 241 |   |
| Provision                  for loan losses                             |   |   | 551 |   |   | 229 |   |
|                                                                   |   |   |   |   |   |   |   |
| **Balance                  at the End of Period**                      |   | $ | 1,406 |   | $ | 1,271 |   |
|                                                                   |   |   |   |   |   |   |   |
| Ratio                  of net charge-offs to average loans outstanding |   |   | 0.39 | % |   | 0.26 | % |

----

| **Schedule                  V**                                                      |   |
|--------------------------------------------------------------------------------------|--------|
| **Allocation                  of Loan Loss Reserve (In                  thousands)** |   |
|                                                                                 |   | For                  the year ended December 31, |
|                                                                                 |   | 2005 | 2004 |
|                                                                                      |   |   | $                  Allocation  |   |   | %                  Allocation |   | $ | Allocation |   |   | %                  Allocation |   |
| Commercial,                  financial and agricultural                              |   |   | 592 |   |   | 42 | % |   | 450 |   |   | 35 | % |
| Real                  Estate - construction                                          |   |   | 22 |   |   | 2 | % |   | 30 |   |   | 2 | % |
| Real                  estate - mortgage                                              |   |   | 577 |   |   | 41 | % |   | 644 |   |   | 51 | % |
| Installment                  - consumer                                              |   |   | 215 |   |   | 15 | % |   | 146 |   |   | 12 | % |
| Other                                                                                |   |   | - |   |   | 0 | % |   | - |   |   | 0 | % |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                                |   | $ | 1,406 |   |   |   |   | $ | 1,270 |   |   |   |   |
|                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |

**Summary        of Loans and Non-Performing Assets**

|  **Schedule                  VI**                                                                    |   |
|-----------------------------------------------------------------------------------------------------------|--------|
| **Non-Performing                  Assets (in                  thousands)**                                |   |
|                                                                                                      |   | December                  31, |   |
|                                                                                                      |   |   | 2005 |   |   | 2004 |   |
| Non-accrual                  loans (1) (3)                                                                |   | $ | 283 |   | $ | 546 |   |
| Loans                  past due greater than 90 days and still accruing interest (2)                  (3) |   |   | 10 |   |   | 0 |   |
| Restructured                  loans (3)                                                                   |   |   | 125 |   |   | 257 |   |
| Other                  real estate owned                                                                  |   |   | 0 |   |   | 335 |   |
|                                                                                                      |   |   |  |   |   |  |   |
| Total                  Non-Performing Assets                                                              |   | $ | 418 |   | $ | 1,138 |   |
|                                                                                                      |   |   |  |   |   |  |   |

| (1)   | Included                  in non-accrual loans is approximately $283,000 and $546,000 of                  loans                  considered impaired as of December 31, 2005 and 2004,                  respectively. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Loans                  past due 90 days or more and still accruing interest which were                  considered                  impaired as of December 31, 2005 totaled $10,000. There were no                  loans in                  this category at December 31, 2004. At December 31, 2005 approximately                  $185,000 of loans considered restructured were considered impaired. |
|-----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Footnotes                  (1) and (2) disclose the amount of impaired loans in the categories                  presented in Schedule VI. At December 31, 2005 and 2004 respectively,                  there were $848,000 and $791,000 in loans considered impaired which                  were                  not in non-accrual status or were not past due 90 days or more                  and still                  accruing interest or were not considered restructured. These loans                  were                  considered impaired due to factors known to management which raised                  concerns about our ability to collect amounts due under the applicable                  loan agreement. Factors such as a known deterioration in the borrower’s                  financial condition or collateral position are considered in the                  decision                  to evaluate and recognize loans as being impaired. |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| **Schedule                  VII**                   |   |
|-----------------------------------------------------|--------|
| **Loans                  by Type (in thousands)**   |   |
|                                                |   | December                  31, |   |
|                                                |   | 2005 |   | 2004 |   |
| Loans                  secured by real estate:      |   |   |   |   |   |
| Commercial                  properties              |   | $ | 15,209 |   | $ | 14,419 |   |
| Construction                  and land development  |   |   | 25,610 |   |   | 23,552 |   |
| Residential                  and other properties   |   |   | 36,143 |   |   | 38,320 |   |
| Total                  loans secured by real estate |   |   | 76,962 |   |   | 76,291 |   |
|                                                |   |   |   |   |   |   |   |
| Commercial                  and industrial loans    |   |   | 18,510 |   |   | 14,778 |   |
| Consumer                  loans and other           |   |   | 14,407 |   |   | 11,566 |   |
|                                                |   |   | 109,879 |   |   | 101,635 |   |
| Less:                  Allowance for loan losses    |   |   | (1,406 | ) |   | (1,271 | ) |
| Unearned                  loan fees                 |   |   | (127 | ) |   | (137 | ) |
|                                                |   | $ | 108,346 |   | $ | 101,227 |   |
|                                                |   |   |   |   |   |   |   |

----

**Investment        Securities**

|   **Schedule                  VIII**                                                                                           |   |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|
| Maturities                  of Securities at December 31, 2005                                                                           |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ($                  in thousands)                                                                                                        |   | Due                  in One Year or Less |   | Due                  After One Year Through Five Years |   | Due                  After Five Years Through Ten Years |   |
| **Securities                  available for sale:**                                                                                      |   |  Amount |   |  Yield |   |  Amount |   |  Yield |   |  Amount |   |  Yield |   |
| U.S.                  Treasury securities and obligations of U.S. Government corporations                  and                  agencies |   | $497 |   |  3.00% |   | $4,183 |   |  3.97% |   | $1,271 |   |  4.44% |   |
| Mortgage-backed                  and related securities                                                                                  |   |  30 |   |  6.08% |   |  368 |   |  4.47% |   |  831 |   |  4.65% |   |
| Obligations                  of state and political subdivisions                                                                         |   |  - |   |    |   |  258 |   |  7.80% |   |  2,547 |   |  6.04% |   |
| Corporate                debt securities                                                                                                 |   |   | - |   |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |
| Total                  Debt Securities                                                                                                   |   | $ | 530 |   |   | 3.18 | % | $ | 4,809 |   |   | 4.21 | % | $ | 4,649 |   |   | 5.35 | % |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ($                  in thousands)                                                                                                        |   | Due                  After Ten Years | Total |   |   |   |   |   |   |
| **Securities                  available for sale:**                                                                                      |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |   |   |   |   |   |   |
| U.S.                  Treasury Securities and Obligations of U.S. Government Corporations                  and                  Agencies |   | $ | 199 |   |   | 6.23 | % | $ | 6,150 |   |   | 4.08 | % |   |   |   |   |   |   |
| Mortgage-Backed                  and Related Securities                                                                                  |   |   | 4,594 |   |   | 4.50 | % |   | 5,823 |   |   | 4.53 | % |   |   |   |   |   |   |
| Obligations                  of State and Political Subdivisions                                                                         |   |   | 3,943 |   |   | 5.83 | % |   | 6,748 |   |   | 5.97 | % |   |   |   |   |   |   |
| Corporate                  Debt Securities                                                                                               |   |   | - |   |   |   |   |   |  |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Debt Securities                                                                                                   |   | $ | 8,736 |   |   | 5.14 | % | $ | 18,721 |   |   | 4.91 | % |   |   |   |   |   |   |
|                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

**Asset/Liability        Management and Interest Rate Risk        Management **

| **Schedule                  IX**                                                        |   |
|-----------------------------------------------------------------------------------------|--------|
| **Interest                  Rate Sensitivity Analysis (in                  thousands)** |   |
| **As                  of December 31, 2005**                                            |   |
|                                                                                    |   | Within                  3 months |   | 3                  months to 1 year |   | 1                  to 5 years |   | After                  5 years |   | Total |   |
| Earning                  Assets:                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                                   |   | $ | 50,165 |   | $ | 8,683 |   | $ | 49,989 |   | $ | 1,042 |   | $ | 109,879 |   |
| Investment                  securities                                                  |   |   | 1,090 |   |   | 2,069 |   |   | 7,025 |   |   | 8,537 |   |   | 18,721 |   |
| Federal                  funds sold                                                     |   |   | 8,338 |   |   |   |   |   |   |   |   |   |   |   | 8,338 |   |
| Total                  earning assets                                                   |   |   | 59,593 |   |   | 10,752 |   |   | 57,014 |   |   | 9,579 |   |   | 136,938 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  Bearing Liabilities:                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                  bearing deposits                                              |   |   | 51,782 |   |   | 14,167 |   |   | 47,020 |   |   | - |   |   | 112,969 |   |
| Borrowings                                                                              |   |   | 3,491 |   |   |   |   |   | 7,562 |   |   |   |   |   | 11,053 |   |
| Total                  interest bearing liabilities                                     |   |   | 55,273 |   |   | 14,167 |   |   | 54,582 |   |   | - |   |   | 124,022 |   |
| NOW                  & MMDA                                                         |   |   | 20,013 |   |   |   |   |   |   |   |   |   |   |   | 20,013 |   |
| Savings                                                                                 |   |   | 1,199 |   |   |   |   |   |   |   |   |   |   |   | 1,199 |   |
| Time                  Deposits                                                          |   |   | 7,940 |   |   | 23,808 |   |   | 9,953 |   |   | - |   |   | 41,701 |   |
| Total                  Deposits                                                         |   |   | 34,511 |   |   | 23,808 |   |   | 9,953 |   |   | - |   |   | 68,272 |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Repricing                  Gap                                                          |   |   | 4,320 |   |   | (3,415 | ) |   | 2,432 |   |   | 9,579 |   |   | 12,916 |   |
| Repricing                  Gap as a percentage of earning assets                        |   |   | 3.2 | % |   | -2.5 | % |   | 1.8 | % |   | 7.0 | % |   |   |   |
| Cumulative                  repricing gap                                               |   |   | 4,320 |   |   | 905 |   |   | 3,337 |   |   | 12,916 |   |   |  |   |
| Cumulative                  repricing gap as a percentage of earning assets             |   |   | 3.2 | % |   | 0.7 | % |   | 2.4 | % |   | 9.4 | % |   |   |   |
|                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

| 1.   | Assets                  and liabilities are generally assigned to a period                  based upon their earliest repricing opportunity, when such repricing                  opportunity is before the contractual                  maturity. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 2.   | Non-accrual                  loans are included in the loan                  category |
|----------------|---------------------------------------------------------------------------------------|

| 3.   | Investment                  securities are scheduled for repricing based on                  their earliest repricing date; however, callable agency securities                  are                  only considered repriced at the call date if the security is at                  a market                  value above par value. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Liquidity        and Capital Resources**

----

**Impact        of New Accounting Standards**

*Accounting for Loans or Certain Debt Securities            Acquired in a Transfer*

*Accounting            for Stock-Based Compensation*

*SOP 94-6-1-Terms of Loan Products That May Give Rise            to a Concentration of Credit Risk*

----

**Item      7.  Financial Statements**

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**Oak      Ridge, Tennessee**

**CONSOLIDATED      FINANCIAL STATEMENTS**

**December 31,      2005 and 2004 **

|                                   | **PUGH                & COMPANY, P.C.**    |                                        |
|----------------------------------------|------------------------------------------------|---------------------------------------------|
|                                   | CERTIFIED                PUBLIC ACCOUNTANTS    |                                        |
| WILL                J. PUGH, CPA       |                                           |                                        |
| RONNIE                G. CATE, CPA     | HOME                FEDERAL PLAZA - SUITE 200  | MEMBERS                                     |
| C.                LARRY ELMORE, CPA    | 315                NORTH CEDAR BLUFF ROAD      |                                        |
| W.                JAMES PUGH, JR., CPA | KNOXVILLE,                TENNESSEE 37923      | AMERICAN                INSTITUTE OF        |
| DANIEL                C. FRANKLIN, CPA | ___________                                    | CERTIFIED                PUBLIC ACCOUNTANTS |
| JAMES                H. JONES, CPA     |                                           |                                        |
| LISA                W. HILL, CPA       | P.O.                BOX 31409                  | TENNESSEE                SOCIETY OF         |
| SUSAN                R. FOARD, CPA     | KNOXVILLE,                TENNESSEE 37930-1409 | CERTIFIED                PUBLIC ACCOUNTANTS |
| ANDREW                R. HARPER, CPA   |                                           |                                        |
|                                   | 865-769-0660                800-332-7021       |                                        |
|                                   | TELECOPIER                865-769-1660         |                                        |
|                                   |                                           |                                        |
|                                   |                                           |                                        |

----

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**CONSOLIDATED      BALANCE SHEETS**

| As                of December 31,                                         |   | 2005        |        | 2004        |   |
|---------------------------------------------------------------------------|--------|-------------|-------------|-------------|--------|
|                                                                      |   |        |        |        |   |
| **ASSETS**                                                                |   |        |        |        |   |
| Cash                and Due From Banks                                    |   | $3,414,487  |        | $2,369,004  |   |
| Federal                Funds Sold                                         |   | 8,337,986   |        | 0           |   |
| **Total                Cash and Cash Equivalents**                        |   | 11,752,473  |        | 2,369,004   |   |
|                                                                      |   |        |        |        |   |
| Securities                Available for Sale, at Fair Value               |   | 18,721,166  |        | 14,753,053  |   |
| Loans                Held for Sale, at Fair Value                         |   | 1,048,200   |        | 859,114     |   |
| Loans,                Net                                                 |   | 108,346,066 |        | 101,227,259 |   |
| Federal                Home Loan Bank Stock, at Cost                      |   |        | 598,500     |        |   | 571,700 |   |
| Premises                and Equipment, Net                                |   |        | 5,007,773   |        |   | 4,168,637 |   |
| Accrued                Interest Receivable                                |   |        | 846,640     |        |   | 672,277 |   |
| Deferred                Income Tax Benefit                                |   |        | 310,108     |        |   | 269,722 |   |
| Prepaid                Expenses and Other                                 |   |        | 228,171     |        |   | 97,981 |   |
| Prepaid                Income Taxes                                       |   |        | 101,657     |        |   | 12,833 |   |
| Foreclosed                Real Estate                                     |   |        | 0           |        |   | 335,000 |   |
|                                                                      |   |        |        |        |   |   |   |
| **TOTAL                ASSETS**                                           |   | $           | 146,960,754 |        | $      | 125,336,580 |   |
|                                                                      |   |        |        |        |   |   |   |
| **LIABILITIES                AND EQUITY**                                 |   |        |        |        |   |   |   |
| **LIABILITIES**                                                           |   |        |        |        |   |   |   |
| Deposits:                                                                 |   |        |        |        |   |   |   |
| Noninterest-bearing                                                       |   | $           | 11,864,329  |        | $      | 11,957,335 |   |
| Interest-bearing                                                          |   |        | 112,968,841 |        |   | 92,841,824 |   |
| **Total                Deposits**                                         |   |        | 124,833,170 |        |   | 104,799,159 |   |
|                                                                      |   |        |        |        |   |   |   |
| Borrowings                                                                |   |        | 11,052,994  |        |   | 10,668,038 |   |
| Accrued                Interest Payable                                   |   |        | 750,179     |        |   | 354,750 |   |
| Other                                                                     |   |        | 317,903     |        |   | 259,771 |   |
|                                                                      |   |        |        |        |   |   |   |
| **Total                Liabilities**                                      |   |        | 136,954,246 |        |   | 116,081,718 |   |
|                                                                      |   |        |        |        |   |   |   |
| **SHAREHOLDERS'                EQUITY**                                   |   |        |        |        |   |   |   |
| Common                Stock, Par Value $1, Authorized 2,000,000 Shares;   |   |        |        |        |   |   |   |
| Issued                and Outstanding 538,985 in 2005 and 533,618 in 2004 |   |        | 538,985     |        |   | 533,618 |   |
| Capital                in Excess of Par Value                             |   |        | 6,610,382   |        |   | 6,491,520 |   |
| Retained                Earnings                                          |   |        | 2,967,866   |        |   | 2,182,746 |   |
|                                                                      |   |        | 10,117,233  |        |   | 9,207,884 |   |
| Accumulated                Other Comprehensive Income (Loss)              |   |        | (110,725    | )           |   | 46,978 |   |
|                                                                      |   |        |        |        |   |   |   |
| **Total                Shareholders' Equity**                             |   |        | 10,006,508  |        |   | 9,254,862 |   |
|                                                                      |   |        |        |        |   |   |   |
| **TOTAL                LIABILITIES AND EQUITY**                           |   | $           | 146,960,754 |        | $      | 125,336,580 |   |

----

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**CONSOLIDATED      STATEMENTS OF INCOME**

| For                the Years Ended December 31,                     |   | 2005       |      | 2004       |   |
|---------------------------------------------------------------------|--------|------------|-----------|------------|--------|
|                                                                |   |       |      |       |   |
| **INTEREST                INCOME**                                  |   |       |      |       |   |
| Loans                (Including Fees)                               |   | $7,883,037 |      | $6,317,958 |   |
| Investment                Securities                                |   | 693,306    |      | 577,820    |   |
| Federal                Funds Sold                                   |   | 201,279    |      | 18,121     |   |
| **Total                Interest Income**                            |   | 8,777,622  |      | 6,913,899  |   |
|                                                                |   |       |      |       |   |
| **INTEREST                EXPENSE**                                 |   |       |      |       |   |
| Deposits                                                            |   | 2,725,460  |      | 1,622,272  |   |
| Borrowings                                                          |   | 463,816    |      | 361,540    |   |
| **Total                Interest Expense**                           |   | 3,189,276  |      | 1,983,812  |   |
|                                                                |   |       |      |       |   |
| **NET                INTEREST INCOME**                              |   | 5,588,346  |      | 4,930,087  |   |
|                                                                |   |       |      |       |   |
| **PROVISION                FOR LOAN LOSSES**                        |   | 550,500    |      | 228,500    |   |
|                                                                |   |       |      |       |   |
| **NET                INTEREST INCOME AFTER PROVISION**              |   |       |      |       |   |
| **FOR                LOAN LOSSES**                                  |   | 5,037,846  |      | 4,701,587  |   |
|                                                                |   |       |      |       |   |
| **NONINTEREST                INCOME**                               |   |       |      |       |   |   |   |
| Service                Charges on Demand Deposits                   |   |       | 404,693   |       |   | 384,269 |   |
| Fees                on Loans Sold                                   |   |       | 370,905   |       |   | 343,742 |   |
| Net                Gain on Sales of Securities Available for Sale   |   |       | 6,080     |       |   | 21,475 |   |
| Other                                                               |   |       | 120,839   |       |   | 76,112 |   |
| **Total                Noninterest Income**                         |   |       | 902,517   |       |   | 825,598 |   |
|                                                                |   |       |      |       |   |   |   |
| **NONINTEREST                EXPENSE**                              |   |       |      |       |   |   |   |
| Salaries                and Employee Benefits                       |   |       | 2,172,673 |       |   | 1,933,346 |   |
| Occupancy                Costs                                      |   |       | 542,063   |       |   | 464,455 |   |
| Furniture                and Equipment Depreciation and Maintenance |   |       | 217,090   |       |   | 198,343 |   |
| Data                Processing Fees                                 |   |       | 392,595   |       |   | 290,705 |   |
| Office                Supplies and Postage                          |   |       | 179,761   |       |   | 175,985 |   |
| Advertising                and Promotion                            |   |       | 125,304   |       |   | 151,599 |   |
| Legal                and Professional                               |   |       | 123,305   |       |   | 151,439 |   |
| Other                                                               |   |       | 765,097   |       |   | 703,059 |   |
| **Total                Noninterest Expense**                        |   |       | 4,517,888 |       |   | 4,068,931 |   |
|                                                                |   |       |      |       |   |   |   |
| **INCOME                BEFORE INCOME TAXES**                       |   |       | 1,422,475 |       |   | 1,458,254 |   |
|                                                                |   |       |      |       |   |   |   |
| **INCOME                TAXES**                                     |   |       | 487,376   |       |   | 500,522 |   |
|                                                                |   |       |      |       |   |   |   |
| **NET                INCOME**                                       |   | $          | 935,099   |       | $      | 957,732 |   |
|                                                                |   |       |      |       |   |   |   |
| **EARNINGS                PER SHARE:**                              |   |       |      |       |   |   |   |
| Basic                                                               |   | $          | 1.75      |       | $      | 1.80 |   |
|                                                                |   |       |      |       |   |   |   |
| Assuming                Dilution                                    |   | $          | 1.74      |       | $      | 1.79 |   |
|                                                                |   |       |      |       |   |   |   |

----

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**CONSOLIDATED      STATEMENTS OF COMPREHENSIVE INCOME**

| **For                the Years Ended December 31,**                             |   | **2005**  | ** ** | **2004** |   |
|---------------------------------------------------------------------------------|--------|-----------|------------|----------|--------|
|                                                                            |   |      |       |     |   |
| **NET                INCOME**                                                   |   | $935,099  |       | $957,732 |   |
|                                                                            |   |      |       |     |   |
| **OTHER                COMPREHENSIVE LOSS, NET OF TAX:**                        |   |      |       |     |   |
| Net                Unrealized Losses on Securities Available for Sale           |   | (244,242) |       | (78,468) |   |
|                                                                            |   |      |       |     |   |
| Reclassification                Adjustment for Net Gains Included in Net Income |   |      |       |     |   |
|                                                                            |   | (6,080)   |       | (21,475) |   |
| Income                Taxes Associated With Unrealized Losses on                |   |      |       |     |   |
| Securities                Available for Sale                                    |   | 92,619    |       | 34,434   |   |
|                                                                            |   |      |       |     |   |
| **Other                Comprehensive Loss, Net of Tax**                         |   |      | (157,703   | )        |   | (65,509 | ) |
|                                                                            |   |      |       |     |   |   |   |
| **COMPREHENSIVE                INCOME**                                         |   | $         | 777,396    |     | $      | 892,223 |   |
|                                                                            |   |      |       |     |   |   |   |

----

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**CONSOLIDATED      STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY**

**For      the Two Years Ended December 31, 2005**

|                                                 |   |                   |    |                               |   |               |   | **Accumulated**                        |      |                    |   |
|------------------------------------------------------|--------|------------------------|---------|------------------------------------|--------|--------------------|--------|----------------------------------------|-----------|-------------------------|--------|
|                                                 |   | ** **             |    | **Capital                in**      |   | ** **         |   | **Other**                              |      | **Total**               |   |
|                                                 |   |  **Common**  |    |  **Excess                of** |   |  **Retained** |   |  **Comprehensive**                |      |  **Shareholders'** |   |
|                                                 |   |  **Stock**   |    |  **Par                Value** |   |  **Earnings** |   |  **Income                (Loss)** |      |  **Equity**        |   |
| **BALANCES,                JANUARY 1, 2004**         |   | $534,130               |    | $6,487,427                         |   | $1,363,212         |   | $112,487                               |      | $8,497,256              |   |
|                                                 |   |              |    |                          |   |          |   |                              |      |               |   |
| Net                Income                            |   |  0                |    |  0                            |   |  957,732      |   |  0                                |      |  957,732           |   |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Other                Comprehensive Loss              |   |                   | 0       |                               |   | 0                  |   |                                   | 0         |                    |   | (65,509 | ) |   | (65,509 | ) |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Cash                Dividends Paid                   |   |                   | 0       |                               |   | 0                  |   |                                   | (83,917   | )                       |   | 0 |   |   | (83,917 | ) |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Stock                Dividends Issued through        |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Dividend                Reinvestment Plan            |   |                   | 2,088   |                               |   | 52,193             |   |                                   | (54,281   | )                       |   | 0 |   |   | 0 |   |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Purchase                and Retirement of            |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| 2,600                Shares of Common Stock          |   |                   | (2,600  | )                                  |   | (48,100            | )      |                                   | 0         |                    |   | 0 |   |   | (50,700 | ) |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| **BALANCES,                DECEMBER 31, 2004**       |   |                   | 533,618 |                               |   | 6,491,520          |   |                                   | 2,182,746 |                    |   | 46,978 |   |   | 9,254,862 |   |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Net                Income                            |   |                   | 0       |                               |   | 0                  |   |                                   | 935,099   |                    |   | 0 |   |   | 935,099 |   |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Other                Comprehensive Loss              |   |                   | 0       |                               |   | 0                  |   |                                   | 0         |                    |   | (157,703 | ) |   | (157,703 | ) |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Cash                Dividends Paid                   |   |                   | 0       |                               |   | 0                  |   |                                   | (81,652   | )                       |   | 0 |   |   | (81,652 | ) |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Issuance                of Common Stock for          |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Directors’                Fees in Lieu of Cash |   |                   | 907     |                               |   | 22,675             |   |                                   | 0         |                    |   | 0 |   |   | 23,582 |   |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Stock                Dividends Issued through        |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Dividend                Reinvestment Plan            |   |                   | 2,440   |                               |   | 65,887             |   |                                   | (68,327   | )                       |   | 0 |   |   | 0 |   |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| Common                Stock Options Exercised        |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| (2,020                Shares at $16 Per Share)       |   |                   | 2,020   |                               |   | 30,300             |   |                                   | 0         |                    |   | 0 |   |   | 32,320 |   |
|                                                 |   |                   |    |                               |   |               |   |                                   |      |                    |   |   |   |   |   |   |
| **BALANCES,                DECEMBER 31, 2005**       |   | $                      | 538,985 |                               | $      | 6,610,382          |   | $                                      | 2,967,866 |                    | $      | (110,725 | ) | $ | 10,006,508 |   |

----

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

| **For                the Years Ended December 31,**                                                       | ** ** | **2005**     | ** **  | **2004**     |   |
|-----------------------------------------------------------------------------------------------------------|------------|--------------|-------------|--------------|--------|
|                                                                                                      |       |         |        |         |   |
| **CASH                FLOWS FROM OPERATING ACTIVITIES**                                                   |       |         |        |         |   |
| Net                Income                                                                                 |       | $935,099     |        | $957,732     |   |
|                                                                                                      |       |         |        |         |   |
| Adjustments                to Reconcile Net Income to Net Cash                                            |       |         |        |         |   |
| Provided                by Operating Activities:                                                          |       |         |        |         |   |
| Provision                for Loan Losses                                                                  |       | 550,500      |        | 228,500      |   |
| Depreciation                                                                                              |       | 239,507      |        | 214,774      |   |
| Deferred                Income Taxes                                                                      |       | 52,233       |        | 66,672       |   |
| Increase                (Decrease) in Unearned Loan Fees                                                  |       | (9,849)      |        | 8,021        |   |
| Net                Amortization of Premiums and Discounts on Securities Available for                Sale |       | 39,606       |        | 79,111       |   |
| FHLB                Stock Dividends                                                                       |       | (26,800)     |        | (22,500)     |   |
| Net                Gain on Sales of Securities Available for Sale                                         |       | (6,080)      |        | (21,475)     |   |
| Fees                on Loans Sold                                                                         |       | (370,905)    |        | (343,742)    |   |
| (Gain)                Loss on Sales of Foreclosed Real Estate                                             |       | 24,104       |        | (12,585)     |   |
| Net                (Increase) Decrease in:                                                                |       |         |        |         |   |
| Loans                Held for Sale                                                                        |       | 181,819      |        | (241,872)    |   |
| Accrued                Interest Receivable                                                                |       | (174,363)    |        | (117,437)    |   |
| Prepaid                Expenses and Other                                                                 |       | (130,190)    |        | (24,431)     |   |
| Prepaid                Income Taxes                                                                       |       | (88,824)     |        | (12,833)     |   |
| Net                Increase (Decrease) in:                                                                |       |         |        |         |   |
| Accrued                Interest Payable                                                                   |       | 395,429      |        | 72,592       |   |
| Accrued                Income Taxes                                                                       |       | 0            |        | (334,383)    |   |
| Other                Liabilities                                                                          |       | 58,132       |        | 28,361       |   |
| Total                Adjustments                                                                          |       | 734,319      |        | (433,227)    |   |
| **Net                Cash Provided by Operating Activities**                                              |       | 1,669,418    |        | 524,505      |   |
|                                                                                                      |       |         |        |         |   |
| **CASH                FLOWS FROM INVESTING ACTIVITIES**                                                   |       |         |        |         |   |
| Securities                Available for Sale:                                                             |       |         |        |         |   |
| Sales                                                                                                     |       | 4,270,448    |        | 2,157,170    |   |
| Purchases                                                                                                 |       | (10,378,754) |        | (6,556,012)  |   |
| Maturities                                                                                                |       | 0            |        | 1,957,000    |   |
| Principal                Repayments Received                                                              |       | 1,856,345    |        | 1,484,498    |   |
| Net                Increase in Loans                                                                      |       | (7,694,458)  |        | (16,385,724) |   |
| Purchases                of Premises and Equipment                                                        |       | (1,078,643)  |        | (594,769)    |   |
| Proceeds                From Sales of Foreclosed Real Estate                                              |       | 345,896      |        | 42,585       |   |
| **Net                Cash Used in Investing Activities**                                                  |       |         | (12,679,166 | )            |   | (17,895,252 | ) |
|                                                                                                      |       |         |        |         |   |   |   |

----

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS (CONTINUED)**

| **For                the Years Ended December 31,**                                               | ** ** | **2005** | ** ** | **2004** |   |
|---------------------------------------------------------------------------------------------------|------------|----------|------------|----------|--------|
|                                                                                              |       |     |       |     |   |
| **CASH                FLOWS FROM FINANCING ACTIVITIES**                                           |       |     |       |     |   |
| Net                Increase (Decrease) in:                                                        |       |     |       |     |   |   |   |
| Deposits                                                                                          |       |     | 20,034,011 |     |   | 16,681,221 |   |
| Securities                Sold Under Agreements to Repurchase                                     |       |     | (79,918    | )        |   | 14,163 |   |
| Federal                Funds Purchased                                                            |       |     | (375,000   | )        |   | 5,000 |   |
| Advances                From Federal Home Loan Bank                                               |       |     | (1,200,000 | )        |   | 1,050,000 |   |
| Obligation                Under Capital Lease                                                     |       |     | (22,126    | )        |   | (21,390 | ) |
| Proceeds                from Subordinated Debentures                                              |       |     | 2,062,000  |     |   | 0 |   |
| Cash                Dividends Paid                                                                |       |     | (81,652    | )        |   | (83,917 | ) |
| Proceeds                From Issuance of Common Stock                                             |       |     | 55,902     |     |   | 0 |   |
| Purchase                and Retirement of Common Stock                                            |       |     | 0          |     |   | (50,700 | ) |
| **Net                Cash Provided by Financing Activities**                                      |       |     | 20,393,217 |     |   | 17,594,377 |   |
|                                                                                              |       |     |       |     |   |   |   |
| **NET                INCREASE IN CASH AND CASH EQUIVALENTS**                                      |       |     | 9,383,469  |     |   | 223,630 |   |
|                                                                                              |       |     |       |     |   |   |   |
| **CASH                AND CASH EQUIVALENTS AT BEGINNING OF YEAR**                                 |       |     | 2,369,004  |     |   | 2,145,374 |   |
|                                                                                              |       |     |       |     |   |   |   |
| **CASH                AND CASH EQUIVALENTS AT END OF YEAR**                                       |       | $        | 11,752,473 |     | $      | 2,369,004 |   |
|                                                                                              |       |     |       |     |   |   |   |
|                                                                                              |       |     |       |     |   |   |   |
| **Supplementary                Disclosures of Cash Flow Information:**                            |       |     |       |     |   |   |   |
| Cash                Paid During the Year for:                                                     |       |     |       |     |   |   |   |
| Interest                                                                                          |       | $        | 2,793,847  |     | $      | 1,911,220 |   |
| Income                Taxes                                                                       |       | $        | 515,000    |     | $      | 781,066 |   |
|                                                                                              |       |     |       |     |   |   |   |
| **Supplementary                Disclosures of Noncash Investing and**                             |       |     |       |     |   |   |   |
| **Financing                Activities:**                                                          |       |     |       |     |   |   |   |
| Acquisition                of Foreclosed Real Estate                                              |       | $        | 35,000     |     | $      | 420,000 |   |
| Conversion                of Foreclosed Real Estate to Premises and Equipment                     |       | $        | 0          |     | $      | 75,000 |   |
| Issuance                of Common Stock through Dividend Reinvestment Plan                        |       | $        | (68,327    | )        | $      | (54,281 | ) |
| Change                in Unrealized Gain/Loss on Securities Available for Sale                    |       | $        | (250,322   | )        | $      | (99,943 | ) |
| Change                in Deferred Taxes Associated With Unrealized Gain/Loss on                   |       |     |       |     |   |   |   |
| Securities                Available for Sale                                                      |       | $        | (92,619    | )        | $      | (34,434 | ) |
| Change                in Net Unrealized Gain/Loss on Securities Available for                Sale |       | $        | (157,703   | )        | $      | (65,509 | ) |
|                                                                                              |       |     |       |     |   |   |   |

----

**TENNESSEE      VALLEY FINANCIAL HOLDINGS, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2005 and 2004 **

**NOTE      1 - PRINCIPLES OF CONSOLIDATION, NATURE OF OPERATIONS AND SHARE EXCHANGE**

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Reclassifications**

**Use      of Estimates **

**Consolidated      Statement of Comprehensive Income**
*Reporting Comprehensive      Income*

**Cash      and Due From Banks**

**Federal      Funds Sold**

**Securities      Available for Sale**

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES      (Continued)**

**Federal      Home Loan Bank Stock, at Cost**

**Recognition      of Interest on Loans**

**Allowance      for Loan Losses**

**Loan      Fees**

**Loans      Held for Sale**

**Premises      and Equipment**

**Federal      Funds Purchased**

**Advertising      and Promotion**

**Income      Taxes**

**Stock      Option Plans**
*Accounting for      Stock Issued to Employees*
*Accounting for Stock-Based Compensation*

----

**NOTE      2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)**

|                                                                                                                                                                                                      |   | **Years                Ended December 31,** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------|
|                                                                                                                                                                                                 |   |                                        | **2005** |   |   | **2004** |   |
| Net                Income, as Reported                                                                                                                                                               |   | $                                           | 935,099 |   | $ | 957,732 |   |
| Less:                Total Stock-Based Employee Compensation Expense Determined                UnderFair                Value Based Method for All Awards, Net of Related Tax                Effects |   |                                        | (32,693 | ) |   | (973 | ) |
| Pro                Forma Net Income                                                                                                                                                                  |   | $                                           | 902,406 |   | $ | 956,759 |   |
|                                                                                                                                                                                                 |   |                                        |   |   |   |   |   |
| Basic                - as Reported                                                                                                                                                                   |   | $                                           | 1.75 |   | $ | 1.80 |   |
| Basic                - Pro Forma                                                                                                                                                                     |   | $                                           | 1.69 |   | $ | 1.80 |   |
| Diluted                - as Reported                                                                                                                                                                 |   | $                                           | 1.74 |   | $ | 1.79 |   |
| Diluted                - Pro Forma                                                                                                                                                                   |   | $                                           | 1.68 |   | $ | 1.79 |   |

|                                   |   | **Years                Ended December 31,** |
|----------------------------------------|--------|---------------------------------------------|
|                                   |   | 2005                                        |   | 2004 |
| Dividend                Yield          |   | 1.37%                                       |   | 1.35% |
| Expected                Life           |   | 9                years                      |   | 9                years |
| Expected                Volatility     |   | 13.65%                                      |   | 10.00% |
| Risk-Free                Interest Rate |   | 4.01%                                       |   | 3.90% |

**Earnings      Per Share **

|                                                                                                   |   | **2005** | ** ** | **2004** |   |
|--------------------------------------------------------------------------------------------------------|--------|----------|------------|----------|--------|
| Weighted                Average Number of Shares Outstanding Used for Basic                Calculation |   | 534,914  |       | 532,468  |   |
| Effect                of Dilutive Stock Options                                                        |   |     | 2,603      |     |   | 2,605 |   |
| Number                of Shares Used for Calculation Assuming Dilution                                 |   |     | 537,517    |     |   | 535,073 |   |

**NOTE      3 - SECURITIES**

|                                                                 |       | **Investment                Securities Available for Sale** |
|-----------------------------------------------------------------|------------|-------------------------------------------------------------|
|                                                                 |       |                                                        | ** ** | ** ** | ** ** | **Gross** |   | ** ** | **Gross** | ** ** | ** ** | **Estimated** |   |
|                                                            | ** ** | ** **                                                  | **Amortized** | ** ** | ** ** | **Unrealized** |   | ** ** | **Unrealized** | ** ** | ** ** | **Fair** | ** ** |
|                                                            | ** ** | ** **                                                  | **Cost ** | ** ** | ** ** | **Gains** | ** ** | ** ** | **Losses** |   | ** ** | **Value** |   |
| **December                31, 2005:**                           |       |                                                        |   |   |   |   |   |   |   |   |   |   |   |
| Obligations                of U.S. Government Corporations      |       |                                                        |   |   |   |   |   |   |   |   |   |   |   |
| and                Agencies                                     |       | $                                                           | 6,262,877 |   | $ | 2,538 |   | $ | (115,701 | ) | $ | 6,149,714 |   |
| Mortgage-Backed                and Related Securities           |       |                                                        | 5,875,686 |   |   | 14,188 |   |   | (66,424 | ) |   | 5,823,450 |   |
| Obligations                of States and Political Subdivisions |       |                                                        | 6,758,359 |   |   | 63,508 |   |   | (73,865 | ) |   | 6,748,002 |   |
| **Total                Securities Available for Sale**          |       | $                                                           | 18,896,922 |   | $ | 80,234 |   | $ | (255,990 | ) | $ | 18,721,166 |   |

|                                                                 |   | **Investment                Securities Available for Sale** |
|-----------------------------------------------------------------|--------|-------------------------------------------------------------|
|                                                            |   |                                                        |  |   |   | **Gross**  |   |   | **Gross** |   |   | **Estimated** |   |
|                                                                 |   |                                                        | ** ****Amortized** |   |   | **Unrealized** |   |   | **Unrealized** |   |   | **Fair** |   |
|                                                                 |   |                                                        | ** ****Cost** |   |   | **Gains** |   |   | **Losses** |   |   | **Value** |   |
| **December                31, 2004:**                           |   |                                                        |   |   |   |   |   |   |   |   |   |   |   |
| Obligations                of U.S. Government Corporations      |   |                                                        |   |   |   |   |   |   |   |   |   |   |   |
| and                Agencies                                     |   | $                                                           | 4,217,635 |   | $ | 31,677 |   | $ | (38,218 | ) | $ | 4,211,094 |   |
| Mortgage-Backed                and Related Securities           |   |                                                        | 4,720,050 |   |   | 47,917 |   |   | (18,349 | ) |   | 4,749,618 |   |
| Obligations                of States and Political Subdivisions |   |                                                        | 5,740,800 |   |   | 107,480 |   |   | (55,939 | ) |   | 5,792,341 |   |
| **Total                Securities Available for Sale**          |   | $                                                           | 14,678,485 |   | $ | 187,074 |   | $ | (112,506 | ) | $ | 14,753,053 |   |

----

**NOTE      3 - SECURITIES**
**(Continued)**

|                                                  |   | **Available                for Sale** |       |
|-------------------------------------------------------|--------|---------------------------------------|------------|
| ** **                                            |   | **Amortized**                         |       | **Estimated** |   |
| ** **                                            |   | **Cost**                              |       | **Fair                Value** |   |
|                                                  |   |                                  |       |   |   |
| Due                in One Year or Less                |   | $500,000                              |       | $496,715 |   |
| Due                After One Year Through Five Years  |   | 4,509,749                             |       | 4,441,456 |   |
| Due                After Five Years Through Ten Years |   | 3,830,411                             |       | 3,817,527 |   |
| Due                After Ten Years                    |   |                                  | 4,181,076  |   |   | 4,142,018 |   |
|                                                  |   |                                  | 13,021,236 |   |   | 12,897,716 |   |
| Mortgage-Backed                and Related Securities |   |                                  | 5,875,686  |   |   | 5,823,450 |   |
|                                                  |   | $                                     | 18,896,922 |   | $ | 18,721,166 |   |

|                                                  |   | **Less                Than 12 Months** |       | **12                Months or Greater**    |   | **Total**                     |   |
|-------------------------------------------------------|--------|----------------------------------------|------------|--------------------------------------------|--------|-------------------------------|--------|
| ** **                                            |   | **Fair                Value**          |       | **Gross                Unrealized Losses** |   | **Fair                Value** |   | **Gross                Unrealized Losses** |   | **Fair                Value** |   | **Gross                Unrealized Losses** |   |
| **As                of December 31, 2005:**           |   |                                   |       |                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations                of U.S.                    |   |                                   |       |                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Government                Corporations                |   |                                   |       |                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and                Agencies                           |   | $                                      | 4,424,466  |                                       | $      | (74,160                       | )      | $ | 1,535,560 |   | $ | (41,541 | ) | $ | 5,960,026 |   | $ | (115,701 | ) |
| Mortgage-Backed                and Related Securities |   |                                   | 3,271,305  |                                       |   | (27,571                       | )      |   | 1,270,508 |   |   | (38,853 | ) |   | 4,541,813 |   |   | (66,424 | ) |
| Obligations                of States and              |   |                                   |       |                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Political                Subdivisions                 |   |                                   | 2,671,813  |                                       |   | (57,588                       | )      |   | 851,804 |   |   | (16,277 | ) |   | 3,523,617 |   |   | (73,865 | ) |
| Total                Temporarily                      |   |                                   |       |                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired                Securities                    |   | $                                      | 10,367,584 |                                       | $      | (159,319                      | )      | $ | 3,657,872 |   | $ | (96,671 | ) | $ | 14,025,456 |   | $ | (255,990 | ) |

| **As                of December 31, 2004:**           |   |   |      |   |   |    |   |   |      |   |   |    |   |   |      |   |   |     |   |
|-------------------------------------------------------|--------|--------|-----------|--------|--------|---------|--------|--------|-----------|--------|--------|---------|--------|--------|-----------|--------|--------|----------|--------|
| Obligations                of U.S.                    |   |   |      |   |   |    |   |   |      |   |   |    |   |   |      |   |   |     |   |
| Government                Corporations                |   |   |      |   |   |    |   |   |      |   |   |    |   |   |      |   |   |     |   |
| and                Agencies                           |   | $      | 2,036,428 |   | $      | (38,218 | )      | $      | 0         |   | $      | 0       |   | $      | 2,036,428 |   | $      | (38,218  | )      |
| Mortgage-Backed                and Related Securities |   |   | 2,018,436 |   |   | (13,939 | )      |   | 703,473   |   |   | (4,410  | )      |   | 2,721,909 |   |   | (18,349  | )      |
| Obligations                of States and              |   |   |      |   |   |    |   |   |      |   |   |    |   |   |      |   |   |     |   |
| Political                Subdivisions                 |   |   | 1,627,948 |   |   | (27,915 | )      |   | 1,163,890 |   |   | (28,024 | )      |   | 2,791,838 |   |   | (55,939  | )      |
| Total                Temporarily                      |   |   |      |   |   |    |   |   |      |   |   |    |   |   |      |   |   |     |   |
| Impaired                Securities                    |   | $      | 5,682,812 |   | $      | (80,072 | )      | $      | 1,867,363 |   | $      | (32,434 | )      | $      | 7,550,175 |   | $      | (112,506 | )      |

----

**NOTE      3 - SECURITIES**
**(Continued)**

**NOTE      4 - LOANS AND ALLOWANCE FOR LOAN LOSSES**

|                                              |   |   | 2005        |   |   | 2004        |   |
|---------------------------------------------------|--------|--------|-------------|--------|--------|-------------|--------|
| Loans                Secured by Real Estate:      |   |   |        |   |   |        |   |
| Commercial                Properties              |   | $      | 15,208,671  |   | $      | 14,419,438  |   |
| Construction                and Land Development  |   |   | 25,610,193  |   |   | 23,551,923  |   |
| Residential                and Other Properties   |   |   | 36,143,543  |   |   | 38,319,677  |   |
| Total                Loans Secured by Real Estate |   |   | 76,962,407  |   |   | 76,291,038  |   |
| Commercial                and Industrial Loans    |   |   | 18,510,318  |   |   | 14,778,556  |   |
| Consumer                Loans and Other           |   |   | 14,406,590  |   |   | 11,565,940  |   |
|                                              |   |   | 109,879,315 |   |   | 102,635,534 |   |
| Less:                Allowance for Loan Losses    |   |   | (1,405,691  | )      |   | (1,270,869  | )      |
| Unearned                Loan Fees                 |   |   | (127,558    | )      |   | (137,406    | )      |
|                                              |   | $      | 108,346,066 |   | $      | 101,227,259 |   |

|                                      |   | **2005** |       | **2004** |   |
|-------------------------------------------|--------|----------|------------|----------|--------|
| Loans                at Beginning of Year |   | $        | 1,484,081  |     | $      | 1,116,837 |   |
| Disbursements                             |   |     | 811,280    |     |   | 867,634 |   |
| Repayments                                |   |     | (1,202,637 | )        |   | (500,390 | ) |
| Loans                at End of Year       |   | $        | 1,092,724  |     | $      | 1,484,081 |   |

|                                          |   | **2005** |      | **2004** |   |
|-----------------------------------------------|--------|----------|-----------|----------|--------|
| Balance,                Beginning of Year     |   | $        | 1,270,869 |     | $      | 1,283,465 |   |
| Charge-offs                                   |   |     | (447,091  | )        |   | (273,089 | ) |
| Recoveries                                    |   |     | 31,413    |     |   | 31,993 |   |
| Provision                - Charged to Expense |   |     | 550,500   |     |   | 228,500 |   |
| Balance,                End of Year           |   | $        | 1,405,691 |     | $      | 1,270,869 |   |

----

**NOTE      4 - LOANS AND ALLOWANCE FOR LOAN LOSSES (Continued)**

**NOTE      5 - PREMISES AND EQUIPMENT**

|                                              |   |   | **2005**   |   |   | **2004**  |   |
|---------------------------------------------------|--------|--------|------------|--------|--------|-----------|--------|
| Land                                              |   | $      | 1,198,693  |   | $      | 1,198,326 |   |
| Buildings                                         |   |   | 3,469,791  |   |   | 2,294,416 |   |
| Leasehold                Improvements             |   |   | 122,912    |   |   | 487,140   |   |
| Furniture,                Fixtures, and Equipment |   |   | 1,335,813  |   |   | 1,074,580 |   |
| Construction                in Progress           |   |   | 0          |   |   | 4,880     |   |
|                                              |   |   | 6,127,209  |   |   | 5,059,342 |   |
| Less                Accumulated Depreciation      |   |   | (1,119,436 | )      |   | (890,705  | )      |
|                                              |   | $      | 5,007,773  |   | $      | 4,168,637 |   |

**NOTE      6 - ACCRUED INTEREST RECEIVABLE**

|       |   | **2005** |    | **2004** |   |
|------------|--------|----------|---------|----------|--------|
| Securities |   | $        | 169,072 |     | $      | 132,354 |   |
| Loans      |   |     | 677,568 |     |   | 539,923 |   |
|       |   | $        | 846,640 |     | $      | 672,277 |   |

**NOTE      7 - DEPOSITS**

|                                                |   | **2005**    |        | **2004**    |   |
|-----------------------------------------------------|--------|-------------|-------------|-------------|--------|
| Noninterest-Bearing                Demand Deposits: |   | $11,864,329 |        | $11,957,335 |   |
| Interest-Bearing                Accounts            |   |        |        |        |   |
| Demand                Accounts                      |   |        | 42,064,370  |        |   | 44,966,262 |   |
| Savings                Accounts                     |   |        | 3,322,721   |        |   | 3,374,304 |   |
| Term                Deposits:                       |   |        |        |        |   |   |   |
| Less                Than $100,000                   |   |        | 41,659,903  |        |   | 29,878,912 |   |
| $100,000                or More                     |   |        | 25,921,847  |        |   | 14,622,346 |   |
| Total                Interest-Bearing Accounts      |   |        | 112,968,841 |        |   | 92,841,824 |   |
| Total                Deposits                       |   | $           | 124,833,170 |        | $      | 104,799,159 |   |

|                   2006 |        | $      | 39,369,746 |       |
|--------------------------------------------|--------|--------|------------|------------|
|                   2007 |   |   |       | 22,826,453 |   |
|                   2008 |   |   |       | 1,453,217  |   |
|                   2009 |   |   |       | 1,369,925  |   |
|  2010                and Thereafter   |   |   |       | 2,562,409  |   |
|                                       |   |   | $          | 67,581,750 |   |

----

**NOTE      8 - BORROWINGS**

| **Date                of****Advance** | ** ** |  **Interest                Rate** | ** ** | **Next                Call/****Prepayment                Date** | ** ** | **Final****Maturity                Date** | ** ** | **Amount                Outstanding****at                12/31/05** |
|---------------------------------------|------------|----------------------------------------|------------|-----------------------------------------------------------------|------------|-------------------------------------------|------------|---------------------------------------------------------------------|
| 9/21/00                               |       | 6.22%                                  |       | None                                                            |       | 9/22/10                                   | $          | 1,000,000                                                           |
| 12/27/00                              |       | 5.00%                                  |       | None                                                            |       | 12/27/10                                  |       | 1,000,000                                                           |
| 8/10/01                               |       | 5.09%                                  |       | 8/10/06                                                         |       | 8/10/11                                   |       | 1,000,000                                                           |
| 8/15/01                               |       | 3.60%                                  |       | 2/9/06                                                          |       | 8/15/11                                   |       | 1,000,000                                                           |
| 6/21/02                               |       | 4.82%                                  |       | None                                                            |       | 6/21/07                                   |       | 500,000                                                             |
| 8/30/02                               |       | 3.65%                                  |       | 8/30/07                                                         |       | 8/30/12                                   |       | 2,000,000                                                           |
| 4/25/03                               |       | 2.41%                                  |       | 4/25/06                                                         |       | 4/25/13                                   |       | 2,000,000                                                           |
|                                  |       |                                   |       |                                                            |       |                                      | $          | 8,500,000                                                           |

----

**NOTE      9 - INTEREST EXPENSE**

|                                                             |   | **2005** |      | **2004** |   |
|------------------------------------------------------------------|--------|----------|-----------|----------|--------|
| Demand                Deposits                                   |   | $671,235 |      | $404,563 |   |
| Term                Deposits                                     |   |     | 2,054,225 |     |   | 1,217,709 |   |
| FHLB                Advances                                     |   |     | 351,725   |     |   | 349,693 |   |
| Subordinated                Debentures                           |   |     | 95,635    |     |   | 0 |   |
| Capital                Lease Obligations                         |   |     | 7,780     |     |   | 8,516 |   |
| Repurchase                Agreements and Federal Funds Purchased |   |     | 8,676     |     |   | 3,331 |   |
| Total                Interest Expense                            |   | $        | 3,189,276 |     | $      | 1,983,812 |   |

**NOTE      10 - INCOME TAXES**

|                                                |   | **2005**               |    | **2004**                            |   |
|-----------------------------------------------------|--------|------------------------|---------|-------------------------------------|--------|
|                                                |   |                   |    |  **Percent                of** |   |   |   |  **Percent                of** |   |
|                                                |   |                   |    |  **Pretax**               |   |   |   |  **Pretax** |   |
|                                                |   |  **Amount ** |    |  **Income**                    |   |  **Amount** |   |  **Income** |   |
| Federal                Income Tax at Statutory Rate |   | $                      | 483,642 |                                |   | 34.0 | % | $ | 495,806 |   |   | 34.0 | % |
| Tax                Exempt Interest and Dividends    |   |                   | (79,065 | )                                   |   | (5.5 | ) |   | (67,714 | ) |   | (4.6 | ) |
| State                Income Tax and Other, Net      |   |                   | 82,799  |                                |   | 5.8 |   |   | 72,430 |   |   | 4.9 |   |
|                                                |   | $                      | 487,376 |                                |   | 34.3 | % | $ | 500,522 |   |   | 34.3 | % |
| Income                Taxes Consist of:             |   |                   |    |                                |   |   |   |   |   |   |   |   |   |
| Current                                             |   | $                      | 435,143 |                                |   |   |   | $ | 433,850 |   |   |   |   |
| Deferred                Benefit                     |   |                   | 52,233  |                                |   |   |   |   | 66,672 |   |   |   |   |
|                                                |   | $                      | 487,376 |                                |   |   |   | $ | 500,522 |   |   |   |   |

|                                                                      |   | **2005** |    | **2004** |   |
|---------------------------------------------------------------------------|--------|----------|---------|----------|--------|
| Deferred                Tax Assets:                                       |   |     |    |     |   |
| Allowance                for Loan Losses                                  |   | $467,195 |    | $449,577 |   |
| Deferred                Loan Fees                                         |   |     | 51,660  |     |   | 55,649 |   |
| Conversion                to Cash Basis                                   |   |     | 0       |     |   | 7,261 |   |
| Unrealized                Holding Losses on Securities Available for Sale |   |     | 65,029  |     |   | 0 |   |
| Organizational                Costs                                       |   |     | 5,018   |     |   | 8,721 |   |
| Prepaid                Items                                              |   |     | 0       |     |   | 1,491 |   |
| Total                Deferred Tax Assets                                  |   |     | 588,902 |     |   | 522,699 |   |
|                                                                      |   |     |    |     |   |   |   |
| Deferred                Tax Liabilities:                                  |   |     |    |     |   |   |   |
| Depreciation                                                              |   |     | 152,289 |     |   | 146,092 |   |
| FHLB                Stock Dividends                                       |   |     | 62,411  |     |   | 51,557 |   |
| Discount                Accretion                                         |   |     | 11,655  |     |   | 9,986 |   |
| Unrealized                Holding Gains on Securities Available for Sale  |   |     | 0       |     |   | 27,590 |   |
| Capitalized                Lease                                          |   |     | 22,543  |     |   | 0 |   |
| Prepaid                Items                                              |   |     | 15,300  |     |   | 0 |   |
| State                Tax                                                  |   |     | 14,596  |     |   | 17,752 |   |
| Total                Deferred Tax Liabilities                             |   |     | 278,794 |     |   | 252,977 |   |
|                                                                      |   |     |    |     |   |   |   |
| Net                Deferred Tax Assets                                    |   | $        | 310,108 |     | $      | 269,722 |   |

----

**NOTE      11 - PROFIT SHARING PLAN**

**NOTE      12 - REGULATORY MATTERS**

*well capitalized*
*well capitalized*

|                                                    | ** ** | ** ** | ** ** | ** **                              | ** ** | **To                Comply With**    | ** ** | **To                Be Well Capitalized**  |
|---------------------------------------------------------|------------|------------|------------|-----------------------------------------|------------|--------------------------------------|------------|--------------------------------------------|
| ** **                                              | ** ** | ** ** | ** ** | ** **                              | ** ** | **Absolute                Minimum**  | ** ** | **Under                Prompt Corrective** |
| ** **                                              | ** ** | **Actual** | ** ** | **Capital                Requirements** | ** ** | **Action                Provisions** |
| ** **                                              | ** ** | **Amount** | ** ** | **Ratio**                               | ** ** | **Amount**                           | ** ** | **Ratio**                                  | ** ** | **Amount** | ** ** | **Ratio** |
|                                                    |       |       |       |                                    |       |                                 |       |                                       |   |   |   |   |
| **As                of December 31, 2005:**             |       |       |       |                                    |       |                                 |       |                                       |   |   |   |   |
| Total                Capital (to Risk-Weighted Assets)  | $          | 13,340     |       | 11.9%                                   | $          | 9,005                                |       | 8.0%                                       | $ | 11,256 |   | 10.0% |
| Tier                I Capital (to Risk-Weighted Assets) | $          | 11,934     |       | 10.6%                                   | $          | 4,502                                |       | 4.0%                                       | $ | 6,754 |   | 6.0% |
| Tier                I Capital (to Average Assets)       | $          | 11,934     |       | 8.4%                                    | $          | 5,691                                |       | 4.0%                                       | $ | 7,114 |   | 5.0% |
|                                                    |       |       |       |                                    |       |                                 |       |                                       |   |   |   |   |
| **As                of December 31, 2004:**             |       |       |       |                                    |       |                                 |       |                                       |   |   |   |   |
| Total                Capital (to Risk-Weighted Assets)  | $          | 10,331     |       | 10.1%                                   | $          | 8,163                                |       | 8.0%                                       | $ | 10,204 |   | 10.0% |
| Tier                I Capital (to Risk-Weighted Assets) | $          | 9,060      |       | 8.9%                                    | $          | 4,082                                |       | 4.0%                                       | $ | 6,122 |   | 6.0% |
| Tier                I Capital (to Average Assets)       | $          | 9,060      |       | 7.4%                                    | $          | 4,916                                |       | 4.0%                                       | $ | 6,145 |   | 5.0% |

**NOTE      13 - KEY EMPLOYEES STOCK OPTION PLANS**

----

**NOTE      13 - KEY EMPLOYEES STOCK OPTION PLANS (Continued)**

|                                                                          |       | **2005**         |                                    | **2004**           |       |
|-------------------------------------------------------------------------------|------------|------------------|-----------------------------------------|--------------------|------------|
|                                                                          |       | **  ** | ** **                              | ** Weighted** |       | **  ** | ** ** | ** Weighted** | ** ** |
| ** **                                                                    | ** ** | **Shares**       | ** **                              | ** Average**  | ** ** | ** Shares** | ** ** | ** Average** | ** ** |
| ** **                                                                    | ** ** | **Under **  | ** **                              | ** Exercise** | ** ** | ** Under** | ** ** | ** Exercise** |   |
|                                                                          |       |                  | **                 Options ** | ** **         | ** ** | **Price** | ** ** | ** ** | **Options** | ** ** | ** ** | **Price** |   |
| Outstanding                at Beginning of Year                               |       |             | 15,500                                  |               | $          | 16.22 |   |   | 14,500 |   | $ | 16.00 |   |
| Granted                                                                       |       |             | 44,000                                  |               |       | 26.00 |   |   | 1,000 |   |   | 19.50 |   |
| Exercised                                                                     |       |             | (2,020                                  | )                  |       | 16.00 |   |   | 0 |   |   | 0.00 |   |
| Rescinded                                                                     |       |             | (750                                    | )                  |       | 19.50 |   |   | 0 |   |   | 0.00 |   |
| Forfeited                                                                     |       |             | (2,750                                  | )                  |       | 25.41 |   |   | 0 |   |   | 0.00 |   |
| Outstanding                at End of Year                                     |       |             | 53,980                                  |               |       | 23.69 |   |   | 15,500 |   |   | 16.22 |   |
|                                                                          |       |             |                                    |               |       |   |   |   |   |   |   |   |   |
| Options                Exercisable at Year-End                                |       |             | 28,480                                  |               | $          | 21.62 |   |   | 14,750 |   | $ | 16.06 |   |
| Weighted-Average                Fair Value of Options Granted During the Year |       | $                | 2.86                                    |               |       |   |   | $ | 4.03 |   |   |   |   |

|                           |   | **Options                Outstanding** | ** ** | **Options                Exercisable** |
|--------------------------------|--------|----------------------------------------|------------|----------------------------------------|
|                           |   |                                   |       | Weighted                               |   |   |   |   |   |   |
|                           |   |                                   |       | Average                                |   | Weighted |   |   |   | Weighted |
|                           |   |                                   |       | Remaining                              |   | Average |   |   |   | Average |
| Range                of        |   | Number                                 |       | Contractual                            |   | Exercise |   | Number |   | Exercise |
| Exercise                Prices |   | Outstanding                            |       | Life                                   |   | Price |   | Exercisable |   | Price |
| $16.00                - $26.00 |   | 53,980                                 |       | 7.77                years              | $ | 23.69 |   | 28,480 | $ | 21.62 |

**NOTE      14 - LEASE COMMITMENTS**

----

**NOTE      14 - LEASE COMMITMENTS (Continued)**

|   |                                                   |   | Capital |   | Operating |   |      |
|--------|--------------------------------------------------------|--------|---------|--------|-----------|--------|-----------|
|   |                                                   |   | Lease   |   | Leases    |   | Total     |
|   | 2006                                                   | $      | 29,906  | $      | 96,183    | $      | 126,089   |
|   | 2007                                                   |   | 29,906  |   | 81,807    |   | 111,713   |
|   | 2008                                                   |   | 33,406  |   | 78,677    |   | 112,083   |
|   | 2009                                                   |   | 35,906  |   | 78,677    |   | 114,583   |
|   | 2010                                                   |   | 35,906  |   | 78,677    |   | 114,583   |
|   | Thereafter                                             |   | 86,773  |   | 661,394   |   | 748,167   |
|   | Total                minimum lease payments            |   | 251,803 | $      | 1,075,415 | $      | 1,327,218 |
|   | Less                amount representing interest       |   | 34,272  |   |      |   |      |
|   | Present                value of minimum lease payments | $      | 217,531 |   |      |   |      |

**NOTE      15 - SIGNIFICANT GROUP CONCENTRATIONS OF CREDIT RISK**

**NOTE      16 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS**

*Disclosures About Fair Value of Financial      Instruments*

----

**NOTE      16 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS      (Continued)**

**Cash      and Cash Equivalents **

**Securities      **

**Federal      Home Loan Bank Stock **

**Loans      Held for Sale **

**Net      Loans**

**Deposits      **

**Securities      Sold Under Agreements to Repurchase**

**Federal      Funds Purchased**

**Advances      From Federal Home Loan Bank**

**Obligation      Under Capital Lease**

**Subordinated      Debentures**

**Off-Balance-Sheet      Loan Commitments**

----

**NOTE      16 - DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS      (Continued)**

|                                                          |   | 2005                      |        | 2004                      |   |
|---------------------------------------------------------------|--------|---------------------------|-------------|---------------------------|--------|
|                                                          |   | Recorded                  |        | Estimated                 |   | Recorded |   | Estimated |   |
|                                                          |   | Book                Value |        | Fair                Value |   | Book                Value |   | Fair                Value |   |
| **FINANCIAL                ASSETS:**                          |   |                      |        |                      |   |   |   |   |   |
| Cash                and Cash Equivalents                      |   | $11,752,473               |        | $11,752,473               |   | $2,369,004 |   | $2,369,004 |   |
| Securities                Available for Sale                  |   | $18,721,166               |        | $18,721,166               |   | $14,753,053 |   | $14,753,053 |   |
| Loans                Held for Sale                            |   | $                         | 1,048,200   |                      | $      | 1,048,200 |   | $ | 859,114 |   | $ | 859,114 |   |
| Net                Loans                                      |   | $                         | 108,346,066 |                      | $      | 107,983,897 |   | $ | 101,227,259 |   | $ | 103,279,160 |   |
|                                                          |   |                      |        |                      |   |   |   |   |   |   |   |   |   |
| **FINANCIAL                LIABILITIES:**                     |   |                      |        |                      |   |   |   |   |   |   |   |   |   |
| Deposits                                                      |   | $                         | 124,833,170 |                      | $      | 124,878,850 |   | $ | 104,799,159 |   | $ | 104,962,777 |   |
| Securities                Sold Under Agreements to Repurchase |   | $                         | 273,553     |                      | $      | 273,553 |   | $ | 353,471 |   | $ | 353,471 |   |
| Federal                Funds Purchased                        |   | $                         | 0           |                      | $      | 0 |   | $ | 375,000 |   | $ | 375,000 |   |
| Advances                From Federal Home Loan Bank           |   | $                         | 8,500,000   |                      | $      | 8,563,556 |   | $ | 9,700,000 |   | $ | 9,967,804 |   |
| Subordinated                Debentures                        |   | $                         | 2,062,000   |                      | $      | 2,080,205 |   | $ | 0 |   | $ | 0 |   |
| Obligation                Under Capital Lease                 |   | $                         | 217,441     |                      | $      | 217,441 |   | $ | 239,567 |   | $ | 239,567 |   |

**NOTE      17 - CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY**

**CONDENSED      BALANCE SHEETS**

|                                                              As                of                December 31, |   | 2005       |       | 2004      |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|------------|-----------|--------|
| **Assets:**                                                                                                                                                                                                                                                                                                                                                                                                                    |   |       |       |      |   |
| Cash                in Bank                                                                                                                                                                                                                                                                                                                                                                                                    |   | $72,734    |       | $91,236   |   |
| Investment                in Common Stock of TNBank                                                                                                                                                                                                                                                                                                                                                                            |   | 11,934,889 |       | 9,088,906 |   |
| Other                Assets                                                                                                                                                                                                                                                                                                                                                                                                    |   | 171,610    |       | 27,742    |   |
| **Total                Assets**                                                                                                                                                                                                                                                                                                                                                                                                |   | $          | 12,179,233 |      | $      | 9,207,884 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |   |       |       |      |   |   |   |
| **Liabilities**- Subordinated Debentures                                                                                                                                                                                                                                                                                                                                                                                       |   | $          | 2,062,000  |      | $      | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                           |   |       |       |      |   |   |   |
| **Shareholders'                Equity:**                                                                                                                                                                                                                                                                                                                                                                                       |   |       |       |      |   |   |   |
| Common                Stock                                                                                                                                                                                                                                                                                                                                                                                                    |   |       | 538,985    |      |   | 533,618 |   |
| Capital                in Excess of Par Value                                                                                                                                                                                                                                                                                                                                                                                  |   |       | 6,610,382  |      |   | 6,491,520 |   |
| Retained                Earnings                                                                                                                                                                                                                                                                                                                                                                                               |   |       | 2,967,866  |      |   | 2,182,746 |   |
|  **Total                Shareholders' Equity**                                                                                                                                                                                                                                                                                                                                                                            |   |       | 10,117,233 |      |   | 9,207,884 |   |
| **Total                Liabilities and Shareholders’ Equity**                                                                                                                                                                                                                                                                                                                                                            |   | $          | 12,179,233 |      | $      | 9,207,884 |   |

**CONDENSED      STATEMENTS OF INCOME**

|                                                                                                                                     For                the Years Ended                December 31, |   |   | 2005    |   |   | 2004    |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|---------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |    |   |   |    |   |
| Income                - Dividends From TNBank                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $      | 213,593 |   | $      | 174,698 |   |
| Operating                Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 206,353 |   |   | 42,608  |   |
| Income                Before Income Tax Benefit and Equity in Undistributed Net Income                of                TNBank                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |   | 7,240   |   |   | 132,090 |   |
| Income                Tax Benefit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |   | 81,876  |   |   | 15,621  |   |
| Equity                in Undistributed Net Income of TNBank                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |   | 845,983 |   |   | 810,021 |   |
| **Net                Income**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $      | 935,099 |   | $      | 957,732 |   |

----

**NOTE      17 - CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY      (Continued)**

**CONDENSED      STATEMENTS OF CASH FLOWS**

|                                                         For                the                Years Ended December 31, |   | 2005   |       | 2004   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |       |   |   |
| **Cash                Flows From Operating Activities:**                                                                                                                                                                                                                                                                                                                                                       |   |   |       |   |   |
| Net                Income                                                                                                                                                                                                                                                                                                                                                                                      |   | $      | 935,099    |   | $      | 957,732 |   |
| Adjustments                to Reconcile Net Income to Net Cash Provided by Operating                Activities:                                                                                                                                                                                                                                                                                                |   |   |       |   |   |   |   |
| Equity                in Undistributed Net Income of TNBank                                                                                                                                                                                                                                                                                                                                                    |   |   | (845,983   | )      |   | (810,021 | ) |
| (Increase)                Decrease in Other Assets                                                                                                                                                                                                                                                                                                                                                             |   |   | (143,868   | )      |   | 18,359 |   |
| Total                Adjustments                                                                                                                                                                                                                                                                                                                                                                               |   |   | (989,851   | )      |   | (791,662 | ) |
|  **Net                Cash Provided by (Used in) Operating Activities**                                                                                                                                                                                                                                                                                                                                   |   |   | (54,752    | )      |   | 166,070 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |       |   |   |   |   |
| **Cash                Flows From Financing Activities**:                                                                                                                                                                                                                                                                                                                                                       |   |   |       |   |   |   |   |
| Capital                Investment in TNBank                                                                                                                                                                                                                                                                                                                                                                    |   |   | (2,000,000 | )      |   | 0 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |       |   |   |   |   |
| **Cash                Flows From Financing Activities**                                                                                                                                                                                                                                                                                                                                                        |   |   |       |   |   |   |   |
| Purchase                and Retirement of Common Stock                                                                                                                                                                                                                                                                                                                                                         |   |   | 0          |   |   | (50,700 | ) |
| Proceeds                from Issuance of Common Stock                                                                                                                                                                                                                                                                                                                                                          |   |   | 55,902     |   |   | 0 |   |
| Proceeds                from Subordinated Debentures                                                                                                                                                                                                                                                                                                                                                           |   |   | 2,062,000  |   |   | 0 |   |
| Cash                Dividends Paid                                                                                                                                                                                                                                                                                                                                                                             |   |   | (81,652    | )      |   | (83,917 | ) |
| **Net                Cash Provided by (Used in) Financing Activities**                                                                                                                                                                                                                                                                                                                                         |   |   | 2,036,250  |   |   | (134,617 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |       |   |   |   |   |
| **Net                Change in Cash and Cash Equivalents**                                                                                                                                                                                                                                                                                                                                                     |   |   | (18,502    | )      |   | 31,453 |   |
| **Cash                and Cash Equivalents, Beginning of Year**                                                                                                                                                                                                                                                                                                                                                |   |   | 91,236     |   |   | 59,783 |   |
| **Cash                and Cash Equivalents, End of Year**                                                                                                                                                                                                                                                                                                                                                      |   | $      | 72,734     |   | $      | 91,236 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |       |   |   |   |   |
| **Supplementary                Disclosure of Noncash Financing Activities:**                                                                                                                                                                                                                                                                                                                                   |   |   |       |   |   |   |   |
| ** **Issuance                of Common Stock through Dividend Reinvestment Plan                                                                                                                                                                                                                                                                                                                           |   | $      | 68,327     |   | $      | 54,281 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                           |   |   |       |   |   |   |   |

----

**Item        8.  Changes in and Disagreements with Accountants on Accounting and        Financial Disclosures**

**Item        8A.  Controls and Procecures**

*Evaluation of Disclosure Controls and Procedures*

*Changes in Internal Controls*

**Item        8B.  Other Information**

** **

**PART        III**

**Item        9.  Directors, Executive Officers, Promoters and Control Persons Compliance with Section 16(a) of the Exchange Act **

**Audit        Committee Financial Expert**

**Code        of Ethics**

**Item        10.  Executive Compensation**

**Item        11.  Security Ownership of Certain Beneficial Owners and Management and        Related Stockholder Matters**

**Item        12.  Certain Relationships and Related Transactions**

----

**Item        13.  Exhibits**

|  **Exhibit                No. ** | ** Description**                                                                                                                                                                                                                                                                       |
|--------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|  3.1*                       |  Charter                of Tennessee Valley Financial Holdings, Inc.                                                                                                                                                                                                                   |
|  3.2*                       |  Bylaws                  of Tennessee Valley Financial Holdings, Inc.                                                                                                                                                                                                                  |
|  21.1                       |  Subsidiaries                of Tennessee Valley Financial Holdings, Inc                                                                                                                                                                                                               |
|  23.1                       |  Consent                of Independent Public Accountants                                                                                                                                                                                                                              |
|  31.1                            |  Certification                of Thomas E. Tuck, President and Chief Executive Officer of Tennessee                Valley Financial Holdings, Inc., Pursuant to Section 302 of the                Sarbanes-Oxley Act of 2002.                                                          |
|  31.2                            |  Certification                of Jason Wilkinson, the Vice President (principal accounting and                financial                officer) of Tennessee Valley Financial Holdings, Inc., Pursuant to                Section                302 of the Sarbanes-Oxley Act of 2002. |
|  32.1                            | Certification                of Thomas E. Tuck, President and Chief Executive Officer of Tennessee                Valley Financial Holdings, Inc., Pursuant to Section 906 of the                Sarbanes-Oxley Act of 2002.                                                                |
|  32.2                            | Certification                of Jason Wilkinson, the Vice President (principal accounting and                financial                officer) of Tennessee Valley Financial Holdings, Inc., Pursuant to                Section                906 of the Sarbanes-Oxley Act of 2002.       |

**Item        14.  Principal Accountant Fees and Services**

----

**SIGNATURES**

|                                        |                                                             |                                     |
|---------------------------------------------|------------------------------------------------------------------|------------------------------------------|
|                                        | **Tennessee                  Valley Financial Holdings, Inc.**   |
|                                   |                                                        |                                |
| Date:                   March 27, 2006 | By:                                                    | /s/ Thomas                  E. Tuck |
|                                        |                       Thomas E. Tuck         |
|                                        | Title:                   President and                  CEO |

|                                                                                                               |   |   |                                                                                                                                                                |
|--------------------------------------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| /s/ Jason                  Wilkinson                                                                          |   |   | /s/ Thomas                  E. Tuck                                                                                                                            |
|                                                                                                                    |   |   |                                                                                                                                                                     |
| Name:                   Jason WilkinsonTitle:  Vice PresidentDate:  March 27,                  2006 |   |   | Name:                   Thomas E. TuckTitle:  President and Chief Executive Officer,                  DirectorDate:  March 27,                  2006 |

|                                                                                                      |   |   |                                                                                                         |
|-----------------------------------------------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------------------|
| /s/ Victor                Dodson                                                                     |   |   | /s/ J.                Michael Anderson                                                                  |
|                                                                                                           |   |   |                                                                                                              |
| Name: Victor                  DodsonTitle:  DirectorDate:                   March 27, 2006 |   |   | Name:                 J. Michael AndersonTitle:  DirectorDate:  March 27,                2006 |

|                                                                                                             |   |   |                                                                                                |
|------------------------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------|
| /s/ J.              Frank Jamison                                                                           |   |   | /s/ A.P.              Cappiello                                                                |
|                                                                                                                  |   |   |                                                                                                     |
| Name:               J. Frank JamisonTitle:  DirectorDate:  March 27,              2006  |   |   | Name:               A.P. CappielloTitle:  DirectorDate:  March 27,              2006 |

|                                                                                              |   |   |                                                                                                |
|---------------------------------------------------------------------------------------------------|--------|--------|-----------------------------------------------------------------------------------------------------|
| /s/ Larry              Beeman                                                                |   |   | /s/ Terry              L. Kerbs                                                                |
|                                                                                                   |   |   |                                                                                                     |
| Name:               Larry BeemanTitle:  DirectorDate:  March 27,              2006 |   |   | Name:               Terry L. KerbsTitle:  DirectorDate:  March 27,              2006 |

|                                                                                                             |   |   |                                                                                                             |
|------------------------------------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------------------------------|
| /s/ Thomas                  D. Moye, Jr.                                                                    |   |   | /s/ William                  Robert Witt                                                                    |
|                                                                                                                  |   |   |                                                                                                                  |
| Name:                   Thomas D. Moye, Jr.Title:  DirectorDate:  March 27,                  2006 |   |   | Name:                   William Robert WittTitle:  DirectorDate:  March 27,                  2006 |