----

----

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| Virginia(State or other jurisdiction ofincorporation or organization) | 82-0545425(I.R.S. EmployerIdentification Number) |
|-----------------------------------------------------------------------|--------------------------------------------------|

| Title of each class           | Name of each exchange on which registered |
|-------------------------------|-------------------------------------------|
| Common Stock $0.835 par value | The NASDAQ Stock Market LLC               |

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

----

|     |       | Page   |
|----------|------------|--------|
| PART I   |       |   |
|     |       |   |   |   |
|     | Item 1     |   | Business | 2 |
|     | Item 1A    |   | Risk Factors | 14 |
|     | Item 1B    |   | Unresolved Staff Comments | 20 |
|     | Item 2     |   | Properties | 20 |
|     | Item 3     |   | Legal Proceedings | 21 |
|     | Item 4     |   | (Removed and Reserved) | 21 |
|     |       |   |   |   |
| PART II  |       |   |   |
|     |       |   |   |   |
|     | Item 5     |   | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer  Purchases of Equity Securities | 21 |
|     | Item 6     |   | Selected Financial Data | 25 |
|     | Item 7     |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 25 |
|     | Item 7A    |   | Quantitative and Qualitative Disclosures About Market Risk | 41 |
|     | Item 8     |   | Financial Statements and Supplementary Data | 43 |
|     | Item 9     |   | Changes in and Disagreements With Accountants on Accounting and Financial Disclosure | 85 |
|     | Item 9A    |   | Controls and Procedures | 85 |
|     | Item 9B    |   | Other Information | 85 |
|     |       |   |   |   |
| PART III |       |   |   |
|     |       |   |   |   |
|     | Item 10    |   | Directors, Executive Officers and Corporate Governance | 85 |
|     | Item 11    |   | Executive Compensation | 86 |
|     | Item 12    |   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | 86 |
|     | Item 13    |   | Certain Relationships and Related Transactions, and Director Independence | 86 |
|     | Item 14    |   | Principal Accountant Fees and Services | 86 |
|     |       |   |   |   |
| PART IV  |       |   |   |
|     |       |   |   |   |
|     | Item 15    |   | Exhibits, Financial Statement Schedules | 87 |
|     | Signatures |   | 89 |

----

| ENTITY /                    |   | PARENT  |   | YEAR      |
|-----------------------------|--------|---------|--------|-----------|
| ACTIVITY                    |   | COMPANY |   | ORGANIZED |
|                        |   |    |   |      |
| Access National Corporation |   | N/A     |   | 2002      |

| Access National Bank | ANC |   | 1999 |
|----------------------|-----|--------|------|

|   | ANB |   | 1985 |
|--------|-----|--------|------|

| Access Capital Management, LLC (“ACM”) | ANB |   | 2010 |
|----------------------------------------------------|-----|--------|------|

| Access Capital Trust II | ANC |   | 2003 |
|-------------------------|-----|--------|------|

----

| ACME Real Estate, LLC (“ACME” or “ACME Real Estate”) | ANB |   | 2007 |
|------------------------------------------------------------------------------|-----|--------|------|

| BUSINESS BANKING SERVICES Lending                                                                                                                                                                                                                                                |   | BUSINESS BANKING SERVICES Cash Management                                                                                                                                                                              |   | PERSONAL BANKINGSERVICES                                                                                                                                                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                            |   |                                                                                                                                                                                                                                       |   |                                                                                                                                                                                                                                                                                                           |
| Accounts Receivable Lines of CreditAccounts Receivable Collection AccountsGrowth Capital Term LoansBusiness Acquisition FinancingPartner Buyout FundingDebt Re-financingFranchise FinancingEquipment FinancingCommercial MortgagesCommercial Construction LoansSBA Preferred Lender Loans  |   | Online BankingChecking AccountsMoney Market AccountsSweep AccountsZero Balance AccountsOvernight InvestmentsCertificates of DepositBusiness Debit CardsLockbox Payment ProcessingPayroll ServicesEmployer Sponsored Retirement Plans  |   | Personal Checking AccountsSavings / Money Market     AccountsCertificates of DepositResidential Mortgage LoansAsset Secured LoansLoans for Business InvestmentConstruction LoansLot & Land LoansInvestment ManagementFinancial PlanningRetirement Account ServicesQualified Plans |

----

|          |   | Year Ended December 31, |   |
|---------------|--------|----------------------------------------|--------|
|          |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|          |   |                                   |   |   |   |   |   |   |   |
| COLORADO      |   |                                   | 3.92   | % |   |   | 4.84 | % |   |   | 3.28 | % |
| GEORGIA       |   |                                   | 4.06   | % |   |   | 3.81 | % |   |   | 4.36 | % |
| ILLINOIS      |   |                                   | 0.00   | % |   |   | 1.82 | % |   |   | 1.86 | % |
| INDIANA       |   |                                   | 8.22   | % |   |   | 0.78 | % |   |   | 0.70 | % |
| MASSACHUSETTS |   |                                   | 2.69   | % |   |   | 2.87 | % |   |   | 2.98 | % |
| MARYLAND      |   |                                   | 8.85   | % |   |   | 7.50 | % |   |   | 12.11 | % |
| TENNESSEE     |   |                                   | 5.60   | % |   |   | 3.72 | % |   |   | 4.47 | % |
| TEXAS         |   |                                   | 4.45   | % |   |   | 4.00 | % |   |   | 4.26 | % |
| VIRGINIA      |   |                                   | 27.92  | % |   |   | 22.23 | % |   |   | 21.15 | % |
|          |   |                                   | 65.71  | % |   |   | 51.57 | % |   |   | 55.17 | % |
| Other States  |   |                                   | 34.29  | % |   |   | 48.43 | % |   |   | 44.83 | % |
|          |   |                                   | 100.00 | % |   |   | 100.00 | % |   |   | 100.00 | % |

----

----

----

----

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|   | · | Creates a new consumer financial protection bureau that will have rulemaking authority for a wide range of consumer protection laws that would apply to all banks and have broad powers to supervise and enforce consumer protection laws. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes standards for Federal preemption of state laws related to federally chartered institutions and their subsidiaries. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------|

|   | · | Permanently increases the deposit insurance coverage to $250 thousand and provides unlimited federal deposit insurance for noninterest-bearing demand transaction accounts at all insured depository institutions until December 31, 2012, and allows depository institutions to pay interest on business checking accounts starting July 2011. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes the assessment base for federal deposit insurance from the amount of insured deposits to consolidated assets less tangible capital, eliminates the ceiling on the size of the Deposit Insurance Fund (“DIF’), and increases the floor of the size of the DIF. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Many aspects of the Dodd-Frank Act are subject to rulemaking and will take effect over several years, making it difficult to anticipate the overall financial impact on the Corporation, its subsidiaries, its customers or the financial industry more generally. Provisions in the legislation that affect the payment of interest on demand deposits and interchange fees are likely to increase the costs associated with deposits as well as place limitations on certain revenues those deposits may generate. Provisions in the legislation that revoke the Tier 1 capital treatment of trust preferred securities and otherwise require revisions to the capital requirements of the Corporation and the Bank could require the Corporation and the Bank to seek other sources of capital in the future. Some of the rules that have been proposed and, in some cases, adopted to comply with the Dodd-Frank Act’s mandates are discussed further below. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | 3.5% CET1 to risk-weighted assets. |
|--------|--------|------------------------------------|

|   | · | 4.5% Tier 1 capital to risk-weighted assets. |
|--------|--------|----------------------------------------------|

|   | · | 8.0% Total capital to risk-weighted assets. |
|--------|--------|---------------------------------------------|

----

----

----

----

|   | · | the time and costs associated with identifying and evaluating potential acquisitions and merger partners; |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | the estimates and judgments used to evaluate credit, operations, management and market risks with respect to the target entity may not be accurate; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the time and costs of evaluating new markets, hiring experienced local management and opening new offices, and the time lags between these activities and the generation of sufficient assets and deposits to support the costs of the expansion; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability to finance an acquisition and possible ownership or economic dilution to our current shareholders; |
|--------|--------|----------------------------------------------------------------------------------------------------------------|

|   | · | the diversion of our management’s attention to the negotiation of a transaction, and the integration of the operations and personnel of the combining businesses; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | entry into new markets where we lack experience; |
|--------|--------|--------------------------------------------------|

|   | · | the introduction of new products and services into our business; |
|--------|--------|------------------------------------------------------------------|

|   | · | the incurrence and possible impairment of goodwill associated with an acquisition and possible adverse short-term effects on our results of operations; and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the potential loss of key employees and clients. |
|--------|--------|--------------------------------------------------|

----

----

----

----

----

----

|           |   | 2010   |   |   |   |   |   | 2009      |   |   |   |   |
|----------------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
|           |   | High   |   |   | Low    |   |   | Dividends |   |   | High   |   |   | Low |   |   | Dividends |   |
|           |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |
| First Quarter  |   | $      | 6.77   |   |   | $      | 5.54   |      |   | $      | 0.01   |   |   | $ | 5.17 |   |   | $ | 3.80 |   |   | $ | 0.01 |   |
| Second Quarter |   |   | 6.75   |   |   |   | 5.50   |      |   |   | 0.01   |   |   |   | 6.80 |   |   |   | 4.49 |   |   |   | 0.01 |   |
| Third Quarter  |   |   | 6.37   |   |   |   | 5.61   |      |   |   | 0.01   |   |   |   | 6.92 |   |   |   | 5.10 |   |   |   | 0.01 |   |
| Fourth Quarter |   | $      | 6.82   |   |   | $      | 6.00   |      |   | $      | 0.01   |   |   | $ | 6.85 |   |   | $ | 5.86 |   |   | $ | 0.01 |   |

|                           |   | Issuer Purchases of Equity Securities |   |
|--------------------------------|--------|-----------------------------------------------------------|--------|
|                           |   |                                                      |   |   |   |   |   | (c) Total Number of |   |   | (d) Maximum Number |   |
|                           |   |                                                      |   |   |   |   |   | Shares Purchased as |   |   | of Shares that may |   |
|                           |   | (a) Total Number of                        |   |   | (b) Average Price |   |   | Part of Publicly |   |   | yet be Purchased |   |
| Period                         |   | Shares Purchased                                     |   |   | Paid Per Share |   |   | Announced Plan |   |   | Under the Plan |   |
|                           |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| October 1 - October 31, 2010   |   |                                                      | 65,800 |   |   | $ | 6.14 |   |   |   | 65,800 |   |   |   | 1,161,887 |   |
| November 1 - November 30, 2010 |   |                                                      | 16,400 |   |   |   | 6.40 |   |   |   | 16,400 |   |   |   | 1,145,487 |   |
| December 1 - December 31, 2010 |   |                                                      | 1,457  |   |   |   | 6.50 |   |   |   | 1,457 |   |   |   | 1,144,030 |   |
|                           |   |                                                      | 83,657 |   |   | $ | 6.19 |   |   |   | 83,657 |   |   |   | 1,144,030 |   |

----

|                           |   |         |   |           |   |        |   | Total Assets |      |
|--------------------------------|--------|--------------|--------|----------------|--------|-------------|--------|--------------|-----------|
| Company, Headquarters          |   | Exchange     |   | Trading Symbol |   | Established |   | 12/31/10     |      |
|                           |   |         |   |           |   |        |   |         |      |
| Cardinal Financial Corporation |   | NASDAQ-GS    |   | CFNL           |   | 1997        |   | $            | 2,072,018 |   |
| Fairfax, Virginia              |   |         |   |           |   |        |   |         |      |   |
|                           |   |         |   |           |   |        |   |         |      |   |
| Eagle Bancorp, Inc.            |   | NASDAQ-CM    |   | EGBN           |   | 1997        |   | $            | 2,089,370 |   |
| Bethesda, Maryland             |   |         |   |           |   |        |   |         |      |   |
|                           |   |         |   |           |   |        |   |         |      |   |
| TowneBank                      |   | NASDAQ-GS    |   | TOWN           |   | 1999        |   | $            | 3,871,018 |   |
|  Portsmouth, Virginia     |   |         |   |           |   |        |   |         |      |   |
|                           |   |         |   |           |   |        |   |         |      |   |
| Valley Financial Corporation   |   | NASDAQ-CM    |   | VYFC           |   | 1994        |   | $            | 767,588   |   |
| Roanoke, Virginia              |   |         |   |           |   |        |   |         |      |   |
|                           |   |         |   |           |   |        |   |         |      |   |
| Virginia National Bank         |   |  OTC-BB |   | VABK           |   | 1998        |   | $            | 458,297   |   |
| Charlottesville, Virginia      |   |         |   |           |   |        |   |         |      |   |

----

|                        |   | Period Ending |   |
|-----------------------------|--------|---------------|--------|
| Index                       |   | 12/31/05      |   |   | 12/31/06 |   |   | 12/31/07 |   |   | 12/31/08 |   |   | 12/31/09 |   |   | 12/31/10 |   |
| Access National Corporation |   |          | 100.00 |   |   |   | 67.22 |   |   |   | 42.69 |   |   |   | 34.07 |   |   |   | 42.25 |   |   |   | 46.57 |   |
| S&P 500                 |   |          | 100.00 |   |   |   | 115.79 |   |   |   | 122.16 |   |   |   | 76.96 |   |   |   | 97.33 |   |   |   | 111.99 |   |
| ANCX Peer Group Index*      |   |          | 100.00 |   |   |   | 100.76 |   |   |   | 83.34 |   |   |   | 86.74 |   |   |   | 68.42 |   |   |   | 92.11 |   |

----

|                                |   | Selected Financial Data               |       |
|-------------------------------------|--------|---------------------------------------|------------|
|                                |   |                                  |       |
|                                |   | Year Ended December 31,               |       |
|                                |   | 2010                                  |       |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                |   | (In Thousands, Except for Share Data) |       |
| Income Statement Data:              |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                 |   | $                                     | 25,029     |   |   | $ | 23,558 |   |   | $ | 21,052 |   |   | $ | 20,122 |   |   | $ | 18,256 |   |
| Provision for loan losses           |   |                                  | 2,816      |   |   |   | 6,064 |   |   |   | 5,423 |   |   |   | 2,588 |   |   |   | 232 |   |
| Noninterest income                  |   |                                  | 34,660     |   |   |   | 56,966 |   |   |   | 30,813 |   |   |   | 27,707 |   |   |   | 27,633 |   |
| Noninterest expense                 |   |                                  | 44,771     |   |   |   | 58,971 |   |   |   | 38,998 |   |   |   | 39,949 |   |   |   | 34,212 |   |
| Income taxes                        |   |                                  | 4,526      |   |   |   | 5,854 |   |   |   | 2,700 |   |   |   | 1,590 |   |   |   | 3,853 |   |
| Net Income                          |   | $                                     | 7,576      |   |   | $ | 9,635 |   |   | $ | 4,744 |   |   | $ | 3,702 |   |   | $ | 7,592 |   |
|                                |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per Share Data:                     |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share                  |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                               |   | $                                     | 0.72       |   |   | $ | 0.93 |   |   | $ | 0.46 |   |   | $ | 0.32 |   |   | $ | 0.81 |   |
| Diluted                             |   |                                  | 0.72       |   |   |   | 0.92 |   |   |   | 0.46 |   |   |   | 0.31 |   |   |   | 0.72 |   |
| Cash dividends paid                 |   |                                  | 0.04       |   |   |   | 0.04 |   |   |   | 0.04 |   |   |   | 0.04 |   |   |   | 0.02 |   |
| Book value at period end            |   |                                  | 6.96       |   |   |   | 6.43 |   |   |   | 5.66 |   |   |   | 5.35 |   |   |   | 5.27 |   |
|                                |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance Sheet Data:                 |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                        |   | $                                     | 831,824    |   |   | $ | 666,879 |   |   | $ | 702,324 |   |   | $ | 622,376 |   |   | $ | 644,782 |   |
| Loans held for sale                 |   |                                  | 82,244     |   |   |   | 76,232 |   |   |   | 84,312 |   |   |   | 39,144 |   |   |   | 65,320 |   |
| Total loans                         |   |                                  | 491,529    |   |   |   | 486,564 |   |   |   | 485,929 |   |   |   | 477,598 |   |   |   | 433,594 |   |
| Total securities                    |   |                                  | 124,307    |   |   |   | 43,095 |   |   |   | 85,119 |   |   |   | 69,001 |   |   |   | 99,276 |   |
| Total deposits                      |   |                                  | 627,848    |   |   |   | 466,645 |   |   |   | 485,401 |   |   |   | 473,418 |   |   |   | 438,932 |   |
| Shareholders' equity                |   |                                  | 72,193     |   |   |   | 67,778 |   |   |   | 57,945 |   |   |   | 57,961 |   |   |   | 62,295 |   |
| Average shares outstanding, basic   |   |                                  | 10,503,383 |   |   |   | 10,391,348 |   |   |   | 10,298,631 |   |   |   | 11,620,130 |   |   |   | 9,429,074 |   |
| Average shares outstanding, diluted |   |                                  | 10,525,258 |   |   |   | 10,432,857 |   |   |   | 10,423,555 |   |   |   | 11,866,468 |   |   |   | 10,541,873 |   |
|                                |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance Ratios:                 |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets            |   |                                  | 0.98       | % |   |   | 1.35 | % |   |   | 0.76 | % |   |   | 0.57 | % |   |   | 1.29 | % |
| Return on average equity            |   |                                  | 10.85      | % |   |   | 15.04 | % |   |   | 8.34 | % |   |   | 5.84 | % |   |   | 17.15 | % |
| Net interest margin (1)             |   |                                  | 3.41       | % |   |   | 3.42 | % |   |   | 3.48 | % |   |   | 3.18 | % |   |   | 3.21 | % |
|                                |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Efficiency Ratios:                  |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Access National Bank                |   |                                  | 59.02      | % |   |   | 60.41 | % |   |   | 55.36 | % |   |   | 50.87 | % |   |   | 48.67 | % |
| Access National Mortgage Corp.      |   |                                  | 84.72      | % |   |   | 77.40 | % |   |   | 86.65 | % |   |   | 107.52 | % |   |   | 92.42 | % |
| Access National Corporation         |   |                                  | 75.01      | % |   |   | 73.23 | % |   |   | 75.19 | % |   |   | 83.52 | % |   |   | 75.06 | % |
|                                |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios:               |   |                                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance to period end loans       |   |                                  | 2.14       | % |   |   | 1.88 | % |   |   | 1.54 | % |   |   | 1.56 | % |   |   | 1.26 | % |
| Allowance to non-performing loans   |   |                                  | 122.96     | % |   |   | 129.79 | % |   |   | 259.55 | % |   |   | 449.25 | % |   |   | 1514.60 | % |
| Net charge-offs to average loans    |   |                                  | 0.43       | % |   |   | 1.08 | % |   |   | 1.06 | % |   |   | 0.12 | % |   |   | - |   |

----

|                           |   | Year Ended December 31,               |    |
|--------------------------------|--------|---------------------------------------|---------|
|                           |   | 2010                                  |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                           |   | (In Thousands, Except for Share Data) |    |
| Average Balance Sheet Data:    |   |                                  |    |   |   |   |   |   |   |   |   |   |   |
| Total assets                   |   | $                                     | 772,600 |   |   | $ | 714,970 |   |   | $ | 624,450 |   |   | $ | 649,584 |   |   | $ | 589,834 |   |
| Securities, at fair value      |   |                                  | 107,940 |   |   |   | 69,758 |   |   |   | 68,861 |   |   |   | 94,331 |   |   |   | 107,165 |   |
| Loans held for sale            |   |                                  | 63,868  |   |   |   | 65,780 |   |   |   | 25,757 |   |   |   | 49,750 |   |   |   | 53,935 |   |
| Loans                          |   |                                  | 475,726 |   |   |   | 490,393 |   |   |   | 484,764 |   |   |   | 472,372 |   |   |   | 400,211 |   |
| Allowance for loan losses      |   |                                  | 9,485   |   |   |   | 8,065 |   |   |   | 8,248 |   |   |   | 6,170 |   |   |   | 5,363 |   |
| Total deposits                 |   |                                  | 572,139 |   |   |   | 519,477 |   |   |   | 450,873 |   |   |   | 444,999 |   |   |   | 423,788 |   |
| Junior subordinated debentures |   |                                  | 6,186   |   |   |   | 6,186 |   |   |   | 6,186 |   |   |   | 9,237 |   |   |   | 10,311 |   |
| Total shareholders' equity     |   |                                  | 69,827  |   |   |   | 64,054 |   |   |   | 56,882 |   |   |   | 63,343 |   |   |   | 44,270 |   |
|                           |   |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                |   |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 risk-based capital      |   |                                  | 14.25   | % |   |   | 13.47 | % |   |   | 11.86 | % |   |   | 12.41 | % |   |   | 15.01 | % |
| Total risk-based capital       |   |                                  | 15.51   | % |   |   | 14.73 | % |   |   | 13.11 | % |   |   | 13.66 | % |   |   | 16.18 | % |
| Leverage capital ratio         |   |                                  | 9.56    | % |   |   | 10.73 | % |   |   | 9.71 | % |   |   | 10.07 | % |   |   | 11.53 | % |
|                           |   |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

----

|                                                                  |   | December 31, 2010      |    |   | December 31, 2009 |   |   | December 31, 2008 |   |
|----------------------------------------------------------------------------|--------|----------------------------------|---------|--------|-----------------------------|--------|--------|-------------------|--------|
|                                                                       |   | Average                          |    |   | Income /                    |   |   | Yield /      |   |   | Average |   |   | Income / |   |   | Yield / |   |   | Average |   |   | Income / |   |   | Yield / |   |
|                                                                       |   | Balance                          |    |   | Expense                     |   |   | Rate              |   |   | Balance |   |   | Expense |   |   | Rate |   |   | Balance |   |   | Expense |   |   | Rate |   |
|                                                                       |   | (Dollars In Thousands) |    |
| Assets:                                                                    |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                                                   |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities, at amortized cost(1)                                           |   | $                                | 107,685 |   |                        | $      | 2,242  |              |   |   | 2.08 | % |   | $ | 68,852 |   |   | $ | 3,038 |   |   |   | 4.41 | % |   | $ | 68,522 |   |   | $ | 3,440 |   |   |   | 5.02 | % |
| Loans held for sale                                                        |   |                             | 63,868  |   |                        |   | 2,982  |              |   |   | 4.67 | % |   |   | 65,780 |   |   |   | 3,361 |   |   |   | 5.11 | % |   |   | 25,757 |   |   |   | 1,778 |   |   |   | 6.90 | % |
| Loans(2)                                                                   |   |                             | 475,726 |   |                        |   | 29,709 |              |   |   | 6.24 | % |   |   | 490,393 |   |   |   | 30,973 |   |   |   | 6.32 | % |   |   | 484,764 |   |   |   | 33,097 |   |   |   | 6.83 | % |
| Interest-bearing balances and federal funds sold                           |   |                             | 86,531  |   |                        |   | 210    |              |   |   | 0.24 | % |   |   | 64,128 |   |   |   | 154 |   |   |   | 0.24 | % |   |   | 26,911 |   |   |   | 487 |   |   |   | 1.81 | % |
| Total interest-earning assets                                              |   |                             | 733,810 |   |                        |   | 35,143 |              |   |   | 4.79 | % |   |   | 689,153 |   |   |   | 37,526 |   |   |   | 5.45 | % |   |   | 605,954 |   |   |   | 38,802 |   |   |   | 6.40 | % |
| Noninterest-earning assets:                                                |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and due from banks                                                    |   |                             | 10,927  |   |                        |   |   |              |   |   |   |   |   |   | 6,748 |   |   |   |   |   |   |   |   |   |   |   | 5,257 |   |   |   |   |   |   |   |   |   |
| Premises, land and equipment                                               |   |                             | 8,655   |   |                        |   |   |              |   |   |   |   |   |   | 8,991 |   |   |   |   |   |   |   |   |   |   |   | 9,475 |   |   |   |   |   |   |   |   |   |
| Other assets                                                               |   |                             | 28,693  |   |                        |   |   |              |   |   |   |   |   |   | 18,143 |   |   |   |   |   |   |   |   |   |   |   | 12,012 |   |   |   |   |   |   |   |   |   |
| Less: allowance for loan losses                                            |   |                             | (9,485  | )      |                        |   |   |              |   |   |   |   |   |   | (8,065 | ) |   |   |   |   |   |   |   |   |   |   | (8,248 | ) |   |   |   |   |   |   |   |   |
| Total noninterest-earning assets                                           |   |                             | 38,790  |   |                        |   |   |              |   |   |   |   |   |   | 25,817 |   |   |   |   |   |   |   |   |   |   |   | 18,496 |   |   |   |   |   |   |   |   |   |
| Total Assets                                                               |   | $                                | 772,600 |   |                        |   |   |              |   |   |   |   |   | $ | 714,970 |   |   |   |   |   |   |   |   |   |   | $ | 624,450 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Equity:                                      |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits:                                                 |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits                                           |   | $                                | 30,166  |   |                        | $      | 183    |              |   |   | 0.61 | % |   | $ | 27,224 |   |   | $ | 278 |   |   |   | 1.02 | % |   | $ | 8,956 |   |   | $ | 100 |   |   |   | 1.12 | % |
| Money market deposit accounts                                              |   |                             | 132,761 |   |                        |   | 1,345  |              |   |   | 1.01 | % |   |   | 92,682 |   |   |   | 1,403 |   |   |   | 1.51 | % |   |   | 112,391 |   |   |   | 2,653 |   |   |   | 2.36 | % |
| Savings accounts                                                           |   |                             | 3,939   |   |                        |   | 30     |              |   |   | 0.76 | % |   |   | 4,470 |   |   |   | 60 |   |   |   | 1.34 | % |   |   | 3,137 |   |   |   | 101 |   |   |   | 3.22 | % |
| Time deposits                                                              |   |                             | 331,162 |   |                        |   | 6,075  |              |   |   | 1.83 | % |   |   | 316,823 |   |   |   | 8,827 |   |   |   | 2.79 | % |   |   | 263,175 |   |   |   | 11,197 |   |   |   | 4.25 | % |
| Total interest-bearing deposits                                            |   |                             | 498,028 |   |                        |   | 7,633  |              |   |   | 1.53 | % |   |   | 441,199 |   |   |   | 10,568 |   |   |   | 2.40 | % |   |   | 387,659 |   |   |   | 14,051 |   |   |   | 3.62 | % |
| Borrowings:                                                                |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB Advances                                                              |   |                             | 11,413  |   |                        |   | 429    |              |   |   | 3.76 | % |   |   | 23,676 |   |   |   | 979 |   |   |   | 4.13 | % |   |   | 13,524 |   |   |   | 454 |   |   |   | 3.36 | % |
| Securities sold under agreements to repurchase and federal funds purchased |   |                             | 29,202  |   |                        |   | 105    |              |   |   | 0.36 | % |   |   | 23,460 |   |   |   | 115 |   |   |   | 0.49 | % |   |   | 16,433 |   |   |   | 260 |   |   |   | 1.58 | % |
| Other short-term borrowings                                                |   |                             | 26,674  |   |                        |   | 228    |              |   |   | 0.85 | % |   |   | 17,640 |   |   |   | 167 |   |   |   | 0.95 | % |   |   | 20,697 |   |   |   | 363 |   |   |   | 1.75 | % |
| FHLB Long-term borrowings                                                  |   |                             | 9,239   |   |                        |   | 312    |              |   |   | 3.38 | % |   |   | 24,026 |   |   |   | 833 |   |   |   | 3.47 | % |   |   | 54,173 |   |   |   | 2,195 |   |   |   | 4.05 | % |
| FDIC Term Note                                                             |   |                             | 29,998  |   |                        |   | 1,191  |              |   |   | 3.97 | % |   |   | 26,627 |   |   |   | 1,068 |   |   |   | 4.01 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| Subordinated Debentures                                                    |   |                             | 6,186   |   |                        |   | 216    |              |   |   | 3.49 | % |   |   | 6,186 |   |   |   | 238 |   |   |   | 3.85 | % |   |   | 6,186 |   |   |   | 417 |   |   |   | 6.74 | % |
| Total borrowings                                                           |   |                             | 112,712 |   |                        |   | 2,481  |              |   |   | 2.20 | % |   |   | 121,615 |   |   |   | 3,400 |   |   |   | 2.80 | % |   |   | 111,013 |   |   |   | 3,689 |   |   |   | 3.32 | % |
| Total interest-bearing deposits and borrowings                             |   |                             | 610,740 |   |                        |   | 10,114 |              |   |   | 1.66 | % |   |   | 562,814 |   |   |   | 13,968 |   |   |   | 2.48 | % |   |   | 498,672 |   |   |   | 17,740 |   |   |   | 3.56 | % |
| Noninterest-bearing liabilities:                                           |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                                                            |   |                             | 74,111  |   |                        |   |   |              |   |   |   |   |   |   | 78,278 |   |   |   |   |   |   |   |   |   |   |   | 63,214 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                          |   |                             | 17,922  |   |                        |   |   |              |   |   |   |   |   |   | 9,824 |   |   |   |   |   |   |   |   |   |   |   | 5,682 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                                          |   |                             | 92,033  |   |                        |   |   |              |   |   |   |   |   |   | 650,916 |   |   |   |   |   |   |   |   |   |   |   | 567,568 |   |   |   |   |   |   |   |   |   |
| Shareholders' Equity                                                       |   |                             | 69,827  |   |                        |   |   |              |   |   |   |   |   |   | 64,054 |   |   |   |   |   |   |   |   |   |   |   | 56,882 |   |   |   |   |   |   |   |   |   |
| Total Liabilities and Shareholders' Equity:                                |   | $                                | 772,600 |   |                        |   |   |              |   |   |   |   |   | $ | 714,970 |   |   |   |   |   |   |   |   |   |   | $ | 624,450 |   |   |   |   |   |   |   |   |   |
|                                                                       |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Spread(3)                                                         |   |                             |    |   |                        |   |   |              |   |   | 3.13 | % |   |   |   |   |   |   |   |   |   |   | 2.97 | % |   |   |   |   |   |   |   |   |   |   | 2.84 | % |
|                                                                       |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Margin(4)                                                     |   |                             |    |   |                        | $      | 25,029 |              |   |   | 3.41 | % |   |   |   |   |   | $ | 23,558 |   |   |   | 3.42 | % |   |   |   |   |   | $ | 21,062 |   |   |   | 3.48 | % |
|                                                                       |   |                             |    |   |                        |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                      |   | Volume and Rate Analysis |   |
|------------------------------------------------|--------|-----------------------------------------|--------|
|                       |   |                                    |   |
|                                           |   | Years Ended December 31, |   |
|                                           |   | 2010 compared to 2009    |   |   | 2009 compared to 2008 |   |   | 2008 compared to 2007 |   |
|                                           |   | Change Due To:                |   |   | Change Due To: |   |   | Change Due To: |   |
|                                           |   | Increase /                         |   |   |   |   |   |   |   |   | Increase / |   |   |   |   |   |   |   |   | Increase / |   |   |   |   |   |   |   |
|                                           |   | (Decrease)                              |   |   | Volume |   |   | Rate |   |   | (Decrease) |   |   | Volume |   |   | Rate |   |   | (Decrease) |   |   | Volume |   |   | Rate |   |
|                                           |   | (In Thousands)                     |   |
| Interest Earning Assets:                       |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investments                                    |   | $                                       | (796   | ) |   | $ | 1,246 |   |   | $ | (2,042 | ) |   | $ | (402 | ) |   | $ | 16 |   |   | $ | (418 | ) |   | $ | (884 | ) |   | $ | (1,267 | ) |   | $ | 383 |   |
| Loans                                          |   |                                    | (1,643 | ) |   |   | (1,012 | ) |   |   | (631 | ) |   |   | (541 | ) |   |   | 2,974 |   |   |   | (3,515 | ) |   |   | (5,428 | ) |   |   | (879 | ) |   |   | (4,549 | ) |
| Interest-bearing deposits                      |   |                                    | 56     |   |   |   | 54 |   |   |   | 2 |   |   |   | (319 | ) |   |   | 319 |   |   |   | (638 | ) |   |   | (356 | ) |   |   | 299 |   |   |   | (655 | ) |
| Federal funds sold                             |   |                                    | -      |   |   |   | - |   |   |   | - |   |   |   | (14 | ) |   |   | (7 | ) |   |   | (7 | ) |   |   | (2 | ) |   |   | 18 |   |   |   | (20 | ) |
|                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total (decrease) increase in interest income   |   |                                    | (2,383 | ) |   |   | 288 |   |   |   | (2,671 | ) |   |   | (1,276 | ) |   |   | 3,302 |   |   |   | (4,578 | ) |   |   | (6,670 | ) |   |   | (1,829 | ) |   |   | (4,841 | ) |
|                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Liabilities:                  |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing demand deposits               |   |                                    | (95    | ) |   |   | 27 |   |   |   | (122 | ) |   |   | 177 |   |   |   | 187 |   |   |   | (10 | ) |   |   | (99 | ) |   |   | (11 | ) |   |   | (88 | ) |
| Money market deposit accounts                  |   |                                    | (58    | ) |   |   | 493 |   |   |   | (551 | ) |   |   | (1,250 | ) |   |   | (410 | ) |   |   | (840 | ) |   |   | (2,235 | ) |   |   | 46 |   |   |   | (2,281 | ) |
| Savings accounts                               |   |                                    | (30    | ) |   |   | (6 | ) |   |   | (24 | ) |   |   | (42 | ) |   |   | 32 |   |   |   | (74 | ) |   |   | (130 | ) |   |   | (71 | ) |   |   | (59 | ) |
| Time deposits                                  |   |                                    | (2,752 | ) |   |   | 384 |   |   |   | (3,136 | ) |   |   | (2,368 | ) |   |   | 1,990 |   |   |   | (4,358 | ) |   |   | (1,611 | ) |   |   | 311 |   |   |   | (1,922 | ) |
| Total interest-bearing deposits                |   |                                    | (2,935 | ) |   |   | 898 |   |   |   | (3,833 | ) |   |   | (3,483 | ) |   |   | 1,799 |   |   |   | (5,282 | ) |   |   | (4,075 | ) |   |   | 275 |   |   |   | (4,350 | ) |
| FHLB Advances                                  |   |                                    | (550   | ) |   |   | (468 | ) |   |   | (82 | ) |   |   | 525 |   |   |   | 401 |   |   |   | 124 |   |   |   | (2,743 | ) |   |   | (1,861 | ) |   |   | (882 | ) |
| Securities sold under agreements to repurchase |   |                                    | (10    | ) |   |   | 25 |   |   |   | (35 | ) |   |   | (145 | ) |   |   | 82 |   |   |   | (227 | ) |   |   | (256 | ) |   |   | 132 |   |   |   | (388 | ) |
| Other short-term borrowings                    |   |                                    | 61     |   |   |   | 79 |   |   |   | (18 | ) |   |   | (196 | ) |   |   | (48 | ) |   |   | (148 | ) |   |   | (278 | ) |   |   | 155 |   |   |   | (433 | ) |
| Long-term borrowings                           |   |                                    | (398   | ) |   |   | (437 | ) |   |   | 39 |   |   |   | (294 | ) |   |   | (138 | ) |   |   | (156 | ) |   |   | 177 |   |   |   | 529 |   |   |   | (352 | ) |
| Trust preferred                                |   |                                    | (22    | ) |   |   | - |   |   |   | (22 | ) |   |   | (179 | ) |   |   | - |   |   |   | (179 | ) |   |   | (389 | ) |   |   | (230 | ) |   |   | (159 | ) |
|                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total (decrease) increase in interest expense  |   |                                    | (3,854 | ) |   |   | 97 |   |   |   | (3,951 | ) |   |   | (3,772 | ) |   |   | 2,096 |   |   |   | (5,868 | ) |   |   | (7,564 | ) |   |   | (1,000 | ) |   |   | (6,564 | ) |
|                                           |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase in net interest income                |   | $                                       | 1,471  |   |   | $ | 191 |   |   | $ | 1,280 |   |   | $ | 2,496 |   |   | $ | 1,206 |   |   | $ | 1,290 |   |   | $ | 894 |   |   | $ | (829 | ) |   | $ | 1,723 |   |

----

----

|                                                |   | First                                 |   |   | Second  |   |   | Third   |   |   | Fourth  |   |   | Total  |   |
|-----------------------------------------------------|--------|---------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                                                |   | Quarter                               |   |   | Quarter |   |   | Quarter |   |   | Quarter |   |   | YTD    |   |
|                                                |   | (In Thousands, Except for Share Data) |   |
|                                                |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |
| 2010                                                |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |
| Total interest income                               |   | $                                     | 8,259  |   |    | $      | 8,658  |    |   | $      | 8,831   |   |   | $      | 9,395  |   |   | $ | 35,143 |   |
| Total interest expense                              |   |                                  | 2,674  |   |    |   | 2,671  |    |   |   | 2,472   |   |   |   | 2,297  |   |   |   | 10,114 |   |
| Net interest income                                 |   |                                  | 5,585  |   |    |   | 5,987  |    |   |   | 6,359   |   |   |   | 7,098  |   |   |   | 25,029 |   |
| Provision for loan losses                           |   |                                  | 198    |   |    |   | 548    |    |   |   | 575     |   |   |   | 1,495  |   |   |   | 2,816 |   |
| Net interest income after provision for loan losses |   |                                  | 5,387  |   |    |   | 5,439  |    |   |   | 5,784   |   |   |   | 5,603  |   |   |   | 22,213 |   |
| Total noninterest income                            |   |                                  | 6,023  |   |    |   | 7,277  |    |   |   | 10,410  |   |   |   | 10,950 |   |   |   | 34,660 |   |
| Total noninterest expense                           |   |                                  | 9,503  |   |    |   | 10,042 |    |   |   | 12,269  |   |   |   | 12,957 |   |   |   | 44,771 |   |
| Income tax expense                                  |   |                                  | 691    |   |    |   | 996    |    |   |   | 1,489   |   |   |   | 1,350  |   |   |   | 4,526 |   |
| Net income                                          |   | $                                     | 1,216  |   |    | $      | 1,678  |    |   | $      | 2,436   |   |   | $      | 2,246  |   |   | $ | 7,576 |   |
|                                                |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Earnings Per Share:                                 |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Basic                                               |   | $                                     | 0.12   |   |    | $      | 0.16   |    |   | $      | 0.23    |   |   | $      | 0.22   |   |   | $ | 0.73 |   |
| Diluted                                             |   |                                  | 0.11   |   |    |   | 0.16   |    |   |   | 0.23    |   |   |   | 0.22   |   |   |   | 0.72 |   |
|                                                |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
|                                                |   | First                                 |   |   | Second  |   |   | Third   |   |   | Fourth  |   |   | Total  |   |
|                                                |   | Quarter                               |   |   | Quarter |   |   | Quarter |   |   | Quarter |   |   | YTD    |   |
|                                                |   | (In Thousands, Except for Share Data) |   |
|                                                |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| 2009                                                |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Total interest income                               |   | $                                     | 9,679  |   |    | $      | 9,688  |    |   | $      | 9,216   |   |   | $      | 8,943  |   |   | $ | 37,526 |   |
| Total interest expense                              |   |                                  | 3,936  |   |    |   | 3,649  |    |   |   | 3,305   |   |   |   | 3,078  |   |   |   | 13,968 |   |
| Net interest income                                 |   |                                  | 5,743  |   |    |   | 6,039  |    |   |   | 5,911   |   |   |   | 5,865  |   |   |   | 23,558 |   |
| Provision for loan losses                           |   |                                  | 1,369  |   |    |   | 2,060  |    |   |   | 1,387   |   |   |   | 1,248  |   |   |   | 6,064 |   |
| Net interest income after provision for loan losses |   |                                  | 4,374  |   |    |   | 3,979  |    |   |   | 4,524   |   |   |   | 4,617  |   |   |   | 17,494 |   |
| Total noninterest income                            |   |                                  | 15,160 |   |    |   | 18,052 |    |   |   | 10,923  |   |   |   | 12,831 |   |   |   | 56,966 |   |
| Total noninterest expense                           |   |                                  | 14,880 |   |    |   | 17,549 |    |   |   | 12,033  |   |   |   | 14,509 |   |   |   | 58,971 |   |
| Income tax expense                                  |   |                                  | 1,990  |   |    |   | 1,712  |    |   |   | 1,260   |   |   |   | 892    |   |   |   | 5,854 |   |
| Net income                                          |   | $                                     | 2,664  |   |    | $      | 2,770  |    |   | $      | 2,154   |   |   | $      | 2,047  |   |   | $ | 9,635 |   |
|                                                |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Earnings Per Share:                                 |   |                                  |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Basic                                               |   | $                                     | 0.26   |   |    | $      | 0.27   |    |   | $      | 0.21    |   |   | $      | 0.19   |   |   | $ | 0.93 |   |
| Diluted                                             |   |                                  | 0.26   |   |    |   | 0.27   |    |   |   | 0.21    |   |   |   | 0.19   |   |   |   | 0.92 |   |

----

|                       |   | Investment Securities Available for Sale |    |
|----------------------------|--------|--------------------------------------------------------------|---------|
|                       |   |                                                         |    |
|                       |   | December 31,                                            |    |
|                       |   | 2010                                                         |    |   | 2009 |   |   | 2008 |   |
|                       |   | (In Thousands)                                               |    |
|                       |   |                                                         |    |   |   |   |   |   |   |
| US Treasury                |   | $                                                            | -       |   |   | $ | - |   |   | $ | 1,006 |   |
| US Government agency       |   |                                                         | 121,712 |   |   |   | 40,154 |   |   |   | 76,354 |   |
| Mortgage backed securities |   |                                                         | 630     |   |   |   | 743 |   |   |   | 1,391 |   |
| Municipals-taxable         |   |                                                         | 472     |   |   |   | 699 |   |   |   | 4,920 |   |
| CRA Mutual fund            |   |                                                         | 1,493   |   |   |   | 1,499 |   |   |   | 1,448 |   |
| Total securities           |   | $                                                            | 124,307 |   |   | $ | 43,095 |   |   | $ | 85,119 |   |

|                                         |   |                   |   |   |            |   |   | After One Year |   |   | After Five Years |   |   | After Ten Years |   |   |   |
|----------------------------------------------|--------|------------------------|--------|--------|-----------------|--------|--------|--------------------------|--------|--------|----------------------------|--------|--------|---------------------------|--------|--------|--------|
|                                         |   | Within                 |   |   | But Within |   |   | But Within          |   |   | and                        |   |   |                      |
|                                         |   | One Year          |   |   | Five Years |   |   | Ten Years           |   |   | Over                       |   | Total  |                      |
|                                         |   | Amount                 |   |   | Yield           |   |   | Amount                   |   |   | Yield                      |   |   | Amount                    |   |   | Yield  |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
|                                         |   | (Dollars In Thousands) |   |
| Investment Securities Available for Sale (1) |   |                   |   |   |            |   |   |                     |   |   |                       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| US Government agency                         |   | $                      | 5,022  |   |            |   | 1.20   | %                        |   | $      | 49,751                     |   |   |                      | 1.44   | %      |   | $ | 29,181 |   |   |   | 2.43 | % |   | $ | 37,758 |   |   |   | 2.25 | % |   | $ | 121,712 |   |   |   | 1.92 | % |
| Mortgage backed securities                   |   |                   | -      |   |            |   | -      |                     |   |   | -                          |   |   |                      | -      |   |   |   | - |   |   |   | - |   |   |   | 630 |   |   |   | 6.02 | % |   |   | 630 |   |   |   | 6.02 | % |
| Municipals-taxable                           |   |                   | -      |   |            |   | -      |                     |   |   | 472                        |   |   |                      | 4.30   | %      |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 472 |   |   |   | 4.30 | % |
| Total                                        |   | $                      | 5,022  |   |            |   | 1.20   | %                        |   | $      | 50,223                     |   |   |                      | 1.46   | %      |   | $ | 29,181 |   |   |   | 2.43 | % |   | $ | 38,388 |   |   |   | 2.31 | % |   | $ | 122,814 |   |   |   | 1.95 | % |
|                                         |   |                   |   |   |            |   |   |                     |   |   |                       |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Excludes CRA Mutual Fund                 |   |                   |   |   |            |   |   |                     |   |   |                       |   |   |                      |   |   |   |   |   |   |   |

----

|                     |   | Composition of Loan Portfolio |
|--------------------------|--------|----------------------------------------------|
|                     |   | Year Ended December 31,       |
|                     |   | 2010                                         |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                     |   | Amount                                       |   |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |
|                     |   | (Dollars In Thousands)                       |
| Commercial real estate   |   | $                                            | 217,999 |   |   |   | 44.35 | % |   | $ | 220,301 |   |   |   | 45.28 | % |   | $ | 218,539 |   |   |   | 44.97 | % |   | $ | 199,894 |   |   |   | 41.85 | % |   | $ | 159,996 |   |   |   | 36.90 | % |
| Residential real estate  |   |                                         | 137,752 |   |   |   | 28.03 |   |   |   | 150,792 |   |   |   | 30.99 |   |   |   | 153,740 |   |   |   | 31.64 |   |   |   | 156,731 |   |   |   | 32.82 |   |   |   | 152,648 |   |   |   | 35.21 |   |
| Commercial               |   |                                         | 94,798 |   |   |   | 19.29 |   |   |   | 72,628 |   |   |   | 14.93 |   |   |   | 69,537 |   |   |   | 14.31 |   |   |   | 64,860 |   |   |   | 13.58 |   |   |   | 51,825 |   |   |   | 11.95 |   |
| Real estate construction |   |                                         | 38,093 |   |   |   | 7.75 |   |   |   | 41,508 |   |   |   | 8.53 |   |   |   | 42,600 |   |   |   | 8.77 |   |   |   | 55,074 |   |   |   | 11.53 |   |   |   | 68,570 |   |   |   | 15.81 |   |
| Consumer                 |   |                                         | 2,887 |   |   |   | 0.58 |   |   |   | 1,335 |   |   |   | 0.27 |   |   |   | 1,513 |   |   |   | 0.31 |   |   |   | 1,039 |   |   |   | 0.22 |   |   |   | 555 |   |   |   | 0.13 |   |
|                     |   |                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans              |   | $                                            | 491,529 |   |   |   | 100.00 | % |   | $ | 486,564 |   |   |   | 100.00 | % |   | $ | 485,929 |   |   |   | 100.00 | % |   | $ | 477,598 |   |   |   | 100.00 | % |   | $ | 433,594 |   |   |   | 100.00 | % |

|                               |   | Loan Maturity Distribution |   |
|------------------------------------|--------|--------------------------------------|--------|
|                               |   | December 31, 2010          |   |
|                               |   | Three Months or            |   |   | Over Three Months |   |   | Over One Year |   |   | Over |   |   |   |   |
|                               |   | Less                                 |   |   | Through One Year |   |   | Through Five Years |   |   | Five Years |   |   | Total |   |
|                               |   | (In Thousands)                       |   |
| Residential real estate            |   | $                                    | 44,199 |   |   | $ | 42,370 |   |   | $ | 43,667 |   |   | $ | 7,516 |   |   | $ | 137,752 |   |
| Commercial real estate             |   |                                 | 31,600 |   |   |   | 51,864 |   |   |   | 117,422 |   |   |   | 17,113 |   |   |   | 217,999 |   |
| Commercial                         |   |                                 | 11,968 |   |   |   | 38,945 |   |   |   | 32,975 |   |   |   | 10,910 |   |   |   | 94,798 |   |
| Real estate construction           |   |                                 | 10,966 |   |   |   | 19,894 |   |   |   | 6,402 |   |   |   | 831 |   |   |   | 38,093 |   |
| Consumer                           |   |                                 | 199    |   |   |   | 922 |   |   |   | 1,766 |   |   |   | - |   |   |   | 2,887 |   |
| Total                              |   | $                                    | 98,932 |   |   | $ | 153,995 |   |   | $ | 202,232 |   |   | $ | 36,370 |   |   | $ | 491,529 |   |
|                               |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans with fixed interest rates    |   | $                                    | 15,020 |   |   | $ | 35,170 |   |   | $ | 50,621 |   |   | $ | 22,440 |   |   | $ | 123,251 |   |
| Loans with floating interest rates |   |                                 | 83,912 |   |   |   | 118,825 |   |   |   | 151,611 |   |   |   | 13,930 |   |   |   | 368,278 |   |
| Total                              |   | $                                    | 98,932 |   |   | $ | 153,995 |   |   | $ | 202,232 |   |   | $ | 36,370 |   |   | $ | 491,529 |   |

----

|                                      |   | Allowance for Loan Losses |   |
|-------------------------------------------|--------|------------------------------------------|--------|
|                                      |   |                                     |   |
|                                      |   | Year Ended December 31,   |   |
|                                      |   | 2010                                     |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                      |   | ( In Thousands)                |   |
| Balance, beginning of year |   | $                                        | 9,127  |   |   | $ | 7,462 |   |   | $ | 7,462 |   |   | $ | 5,452 |   |   | $ | 5,215 |   |
|                                      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                 |   |                                     | 2,816  |   |   |   | 6,064 |   |   |   | 5,423 |   |   |   | 2,588 |   |   |   | 232 |   |
|                                      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs:                              |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                    |   |                                     | 624    |   |   |   | 1,648 |   |   |   | 4,038 |   |   |   | - |   |   |   | - |   |
| Residential real estate                   |   |                                     | 875    |   |   |   | 851 |   |   |   | 1,055 |   |   |   | 580 |   |   |   | - |   |
| Commercial                                |   |                                     | 501    |   |   |   | 1,541 |   |   |   | 184 |   |   |   | - |   |   |   | - |   |
| Real estate construction                  |   |                                     | 48     |   |   |   | 1,247 |   |   |   | 241 |   |   |   | - |   |   |   | - |   |
| Consumer                                  |   |                                     | -      |   |   |   | 23 |   |   |   | 42 |   |   |   | - |   |   |   | - |   |
| Total charge-offs                         |   |                                     | 2,048  |   |   |   | 5,310 |   |   |   | 5,560 |   |   |   | 580 |   |   |   | - |   |
| Recoveries:                               |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                    |   |                                     | 109    |   |   |   | 294 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential real estate                   |   |                                     | 38     |   |   |   | 79 |   |   |   | 137 |   |   |   | - |   |   |   | - |   |
| Commercial                                |   |                                     | 385    |   |   |   | 374 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real estate construction                  |   |                                     | 99     |   |   |   | 66 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                  |   |                                     | 1      |   |   |   | 98 |   |   |   | - |   |   |   | 2 |   |   |   | 5 |   |
| Total recoveries                          |   |                                     | 632    |   |   |   | 911 |   |   |   | 137 |   |   |   | 2 |   |   |   | 5 |   |
| Net charge-offs                           |   |                                     | (1,416 | ) |   |   | (4,399 | ) |   |   | (5,423 | ) |   |   | (578 | ) |   |   | 5 |   |
|                                      |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, end of year                      |   | $                                        | 10,527 |   |   | $ | 9,127 |   |   | $ | 7,462 |   |   | $ | 7,462 |   |   | $ | 5,452 |   |

|                     |   | Allocation of the Allowance for Loan Losses |   |
|--------------------------|--------|---------------------------------------------------------------------------|--------|
|                     |   |                                                                      |   |
|                     |   | Year Ended December 31,                                    |   |
|                     |   | 2010                                                                      |   |   | Percentageof total |   |   | 2009 |   |   | Percentageof total |   |   | 2008 |   |   | Percentageof total |   |   | 2007 |   |   | Percentageof total |   |   | 2006 |   |   | Percentageof total |   |
|                     |   | (Dollars In Thousands)                                                    |   |
| Commercial real estate   |   | $                                                                         | 5,316  |   |   |   | 50.50 | % |   | $ | 4,398 |   |   |   | 48.19 | % |   | $ | 2,948 |   |   |   | 39.51 | % |   | $ | 3,487 |   |   |   | 46.73 | % |   | $ | 2,296 |   |   |   | 42.11 | % |
| Residential real estate  |   |                                                                      | 2,925  |   |   |   | 27.79 |   |   |   | 2,517 |   |   |   | 27.58 |   |   |   | 1,880 |   |   |   | 25.19 |   |   |   | 1,695 |   |   |   | 22.72 |   |   |   | 1,293 |   |   |   | 23.72 |   |
| Commercial               |   |                                                                      | 1,506  |   |   |   | 14.31 |   |   |   | 1,563 |   |   |   | 17.13 |   |   |   | 1,816 |   |   |   | 24.34 |   |   |   | 1,341 |   |   |   | 17.97 |   |   |   | 802 |   |   |   | 14.71 |   |
| Real estate construction |   |                                                                      | 757    |   |   |   | 7.19 |   |   |   | 539 |   |   |   | 5.91 |   |   |   | 805 |   |   |   | 10.79 |   |   |   | 929 |   |   |   | 12.45 |   |   |   | 1,055 |   |   |   | 19.35 |   |
| Consumer                 |   |                                                                      | 23     |   |   |   | 0.21 |   |   |   | 110 |   |   |   | 1.19 |   |   |   | 13 |   |   |   | 0.17 |   |   |   | 10 |   |   |   | 0.13 |   |   |   | 6 |   |   |   | 0.11 |   |
| Total                    |   | $                                                                         | 10,527 |   |   |   | 100.00 | % |   | $ | 9,127 |   |   |   | 100.00 | % |   | $ | 7,462 |   |   |   | 100.00 | % |   | $ | 7,462 |   |   |   | 100.00 | % |   | $ | 5,452 |   |   |   | 100.00 | % |

----

|                                |   | Non-performing Assets and Accruing Loans Past Due 90 Days or More |   |
|-------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|
|                                |   |                                                                                                                |   |
|                                |   | December 31,                                                                                                   |   |
|                                |   | 2010                                                                                                                |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                |   | (Dollars In Thousands)                                                                                    |   |
| Non-accrual and restructured loans: |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate              |   | $                                                                                                                   | 6,712  |   |   | $ | 3,631 |   |   | $ | 22 |   |   | $ | - |   |   | $ | - |   |
| Residential real estate             |   |                                                                                                                | 949    |   |   |   | 1,504 |   |   |   | - |   |   |   | 1,474 |   |   |   | 360 |   |
| Commercial                          |   |                                                                                                                | 900    |   |   |   | 208 |   |   |   | 74 |   |   |   | 187 |   |   |   | - |   |
| Real estate construction            |   |                                                                                                                | -      |   |   |   | 1,689 |   |   |   | 2,678 |   |   |   | - |   |   |   | - |   |
| Consumer                            |   |                                                                                                                | -      |   |   |   | - |   |   |   | 101 |   |   |   | - |   |   |   | - |   |
| Total non-accrual loans             |   |                                                                                                                | 8,561  |   |   |   | 7,032 |   |   |   | 2,875 |   |   |   | 1,661 |   |   |   | 360 |   |
|                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned ("OREO")    |   |                                                                                                                | 1,859  |   |   |   | 5,111 |   |   |   | 4,455 |   |   |   | 1,041 |   |   |   | - |   |
|                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing assets         |   | $                                                                                                                   | 10,420 |   |   | $ | 12,143 |   |   | $ | 7,330 |   |   | $ | 2,702 |   |   | $ | 360 |   |
|                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of non-performing assets to:  |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans plus OREO               |   |                                                                                                                | 2.11   | % |   |   | 2.47 | % |   |   | 1.49 | % |   |   | 0.56 | % |   |   | 0.08 | % |
|                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                        |   |                                                                                                                | 1.25   | % |   |   | 1.82 | % |   |   | 1.04 | % |   |   | 0.43 | % |   |   | 0.06 | % |
|                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accruing past due loans:            |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 90 or more days past due            |   | $                                                                                                                   | 333    |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 914 |   |

----

|                                |   | Average Deposits and Average Rates Paid |    |
|-------------------------------------|--------|-----------------------------------------|---------|
|                                |   |                                    |    |
|                                |   | Year Ended December 31,                 |    |
|                                |   | 2010                                    |    |   | 2009 |   |   | 2008 |   |
|                                |   | Average                                 |    |   | Income / |   |   | Yield / |   |   | Average |   |   | Income / |   |   | Yield / |   |   | Average |   |   | Income / |   |   | Yield / |   |
|                                |   | Balance                                 |    |   | Expense |   |   | Rate |   |   | Balance |   |   | Expense |   |   | Rate |   |   | Balance |   |   | Expense |   |   | Rate |   |
|                                |   | (Dollars In Thousands)                  |    |
| Interest-bearing demand deposits    |   | $                                       | 30,166  |   |   | $ | 183 |   |   |   | 0.61 | % |   | $ | 27,224 |   |   | $ | 278 |   |   |   | 1.02 | % |   | $ | 8,956 |   |   | $ | 100 |   |   |   | 1.12 | % |
| Money market deposit accounts       |   |                                    | 132,761 |   |   |   | 1,345 |   |   |   | 1.01 | % |   |   | 92,682 |   |   |   | 1,403 |   |   |   | 1.51 | % |   |   | 112,391 |   |   |   | 2,653 |   |   |   | 2.36 | % |
| Savings accounts                    |   |                                    | 3,939   |   |   |   | 30 |   |   |   | 0.76 | % |   |   | 4,470 |   |   |   | 60 |   |   |   | 1.34 | % |   |   | 3,137 |   |   |   | 101 |   |   |   | 3.22 | % |
| Time deposits                       |   |                                    | 331,162 |   |   |   | 6,075 |   |   |   | 1.83 | % |   |   | 316,823 |   |   |   | 8,827 |   |   |   | 2.79 | % |   |   | 263,175 |   |   |   | 11,197 |   |   |   | 4.25 | % |
| Total interest-bearing deposits     |   |                                    | 498,028 |   |   |   | 7,633 |   |   |   | 1.53 | % |   |   | 441,199 |   |   |   | 10,568 |   |   |   | 2.40 | % |   |   | 387,659 |   |   |   | 14,051 |   |   |   | 3.62 | % |
| Noninterest-bearing demand deposits |   |                                    | 74,111  |   |   |   |   |   |   |   |   |   |   |   | 78,278 |   |   |   |   |   |   |   |   |   |   |   | 63,214 |   |   |   |   |   |   |   |   |   |
| Total deposits                      |   | $                                       | 572,139 |   |   |   |   |   |   |   |   |   |   | $ | 519,477 |   |   |   |   |   |   |   |   |   |   | $ | 450,873 |   |   |   |   |   |   |   |   |   |

|                              |   | Certificate of Deposit Maturity Distribution |    |
|-----------------------------------|--------|----------------------------------------------|---------|
|                              |   |                                         |    |
|                              |   | December 31, 2010                            |    |
|                              |   | Three months                                 |    |   | Over three |   |   | Over |   |   |   |   |
|                              |   | or less                                      |    |   | through twelve months |   |   | twelve months |   |   | Total |   |
|                              |   | (In Thousands)                               |    |
| Less than $100,000                |   | $                                            | 8,272   |   |   | $ | 29,173 |   |   | $ | 30,710 |   |   | $ | 68,155 |   |
| Greater than or equal to $100,000 |   |                                         | 144,032 |   |   |   | 122,807 |   |   |   | 50,530 |   |   |   | 317,369 |   |
|                              |   | $                                            | 152,304 |   |   | $ | 151,980 |   |   | $ | 81,240 |   |   | $ | 385,524 |   |

----

|                                           |   | Borrowed Funds Distribution |    |
|------------------------------------------------|--------|-----------------------------|---------|
|                                           |   |                        |    |
|                                           |   | Year Ended December 31,     |    |
|                                           |   | 2010                        |    |   | 2009 |   |   | 2008 |   |
|                                           |   | (Dollars In Thousands)      |    |
| At Period End                                  |   |                        |    |   |   |   |   |   |   |
| FHLB advances                                  |   | $                           | 5,417   |   |   | $ | 20,178 |   |   | $ | 44,333 |   |
| Securities sold under agreements to repurchase |   |                        | 41,047  |   |   |   | 26,804 |   |   |   | 21,395 |   |
| Commercial paper                               |   |                        | 28,226  |   |   |   | 16,517 |   |   |   | 26,136 |   |
| U.S. Treasury demand note                      |   |                        | 5,658   |   |   |   | 750 |   |   |   | 1,718 |   |
| FHLB long-term borrowings                      |   |                        | 7,036   |   |   |   | 16,333 |   |   |   | 41,107 |   |
| Senior unsecured term note                     |   |                        | 29,998  |   |   |   | 29,997 |   |   |   | - |   |
| Subordinated debentures                        |   |                        | 6,186   |   |   |   | 6,186 |   |   |   | 6,186 |   |
| Federal funds purchased                        |   |                        | -       |   |   |   | - |   |   |   | 9,993 |   |
| Total at period end                            |   | $                           | 123,568 |   |   | $ | 116,765 |   |   | $ | 150,868 |   |
|                                           |   |                        |    |   |   |   |   |   |   |   |   |   |
| Average Balances                               |   |                        |    |   |   |   |   |   |   |   |   |   |
| FHLB advances                                  |   | $                           | 11,413  |   |   | $ | 23,676 |   |   | $ | 13,524 |   |
| Securities sold under agreements to repurchase |   |                        | 29,202  |   |   |   | 23,283 |   |   |   | 16,269 |   |
| Commercial paper                               |   |                        | 25,391  |   |   |   | 16,934 |   |   |   | 19,836 |   |
| U.S. Treasury demand note                      |   |                        | 1,283   |   |   |   | 706 |   |   |   | 861 |   |
| FHLB long-term borrowings                      |   |                        | 9,239   |   |   |   | 24,026 |   |   |   | 54,173 |   |
| Senior unsecured term note                     |   |                        | 29,998  |   |   |   | 26,627 |   |   |   | - |   |
| Subordinated debentures                        |   |                        | 6,186   |   |   |   | 6,186 |   |   |   | 6,186 |   |
| Federal funds purchased                        |   |                        | -       |   |   |   | 177 |   |   |   | 164 |   |
| Total average balance                          |   | $                           | 112,712 |   |   | $ | 121,615 |   |   | $ | 111,013 |   |
|                                           |   |                        |    |   |   |   |   |   |   |   |   |   |
| Average rate paid on all borrowed funds        |   |                        | 2.20    | % |   |   | 2.80 | % |   |   | 3.32 | % |

----

|                                          |   | Risk Based Capital Analysis  |    |
|-----------------------------------------------|--------|------------------------------|---------|
|                                          |   |                         |    |
|                                          |   | Year Ended December 31,      |    |
|                                          |   | 2010                         |    |   | 2009 |   |   | 2008 |   |
|                                          |   |  (Dollars In Thousands) |    |
| Tier 1 Capital:                               |   |                         |    |   |   |   |   |   |   |
| Common stock                                  |   | $                            | 8,664   |   |   | $ | 8,799 |   |   | $ | 8,551 |   |
| Capital surplus                               |   |                         | 17,794  |   |   |   | 18,552 |   |   |   | 17,411 |   |
| Retained earnings                             |   |                         | 47,530  |   |   |   | 40,376 |   |   |   | 31,123 |   |
| Subordinated debt (trust preferred debenture) |   |                         | 6,000   |   |   |   | 6,000 |   |   |   | 6,000 |   |
| Less: Disallowed servicing assets             |   |                         | (168    | ) |   |   | (123 | ) |   |   | - |   |
| Total Tier 1 Capital                          |   |                         | 79,820  |   |   |   | 73,604 |   |   |   | 63,085 |   |
| Allowance for loan losses                     |   |                         | 7,049   |   |   |   | 6,861 |   |   |   | 6,662 |   |
| Total Risk-Based Capital                      |   | $                            | 86,869  |   |   | $ | 80,465 |   |   | $ | 69,747 |   |
|                                          |   |                         |    |   |   |   |   |   |   |   |   |   |
| Risk weighted assets                          |   | $                            | 560,112 |   |   | $ | 546,288 |   |   | $ | 532,195 |   |
|                                          |   |                         |    |   |   |   |   |   |   |   |   |   |
| Quarterly average assets                      |   | $                            | 834,810 |   |   | $ | 685,754 |   |   | $ | 649,817 |   |
|                                          |   |                         |    |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                               |   |                         |    |   |   |   |   |   |   |   |   |   |
| Tier 1 risk-based capital ratio               |   |                         | 14.25   | % |   |   | 13.47 | % |   |   | 11.86 | % |
| Total risk-based capital ratio                |   |                         | 15.51   | % |   |   | 14.73 | % |   |   | 13.11 | % |
| Leverage ratio                                |   |                         | 9.56    | % |   |   | 10.73 | % |   |   | 9.71 | % |

----

|                                           |   | Payments Due By Period |    |
|------------------------------------------------|--------|------------------------|---------|
|                                           |   | December 31, 2010      |    |
|                                           |   | Less Than              |    |   | 1 - 3 |   |   | More Than |   |   |   |   |
|                                           |   | 1 Year                 |    |   | Years |   |   | 3 Years |   |   | Total |   |
|                                           |   | (In Thousands)         |    |
| Certificates of deposit                        |   | $                      | 304,284 |   |   | $ | 54,499 |   |   | $ | 26,741 |   |   | $ | 385,524 |   |
| FHLB Advances                                  |   |                   | 5,417   |   |   |   | - |   |   |   | - |   |   |   | 5,417 |   |
| Securities sold under agreements to repurchase |   |                   | 41,047  |   |   |   | - |   |   |   | - |   |   |   | 41,047 |   |
| FHLB long-term borrowings                      |   |                   | -       |   |   |   | 2,250 |   |   |   | 4,786 |   |   |   | 7,036 |   |
| Senior unsecured term note                     |   |                   | -       |   |   |   | 29,998 |   |   |   | - |   |   |   | 29,998 |   |
| Commercial paper                               |   |                   | 28,226  |   |   |   | - |   |   |   | - |   |   |   | 28,226 |   |
| US treasury demand notes                       |   |                   | 5,658   |   |   |   | - |   |   |   | - |   |   |   | 5,658 |   |
| Subordinated debentures                        |   |                   | -       |   |   |   | - |   |   |   | 6,186 |   |   |   | 6,186 |   |
| Leases                                         |   |                   | 417     |   |   |   | 871 |   |   |   | 926 |   |   |   | 2,214 |   |
| Total                                          |   | $                      | 385,049 |   |   | $ | 87,618 |   |   | $ | 38,639 |   |   | $ | 511,306 |   |

----

----

----

----

----

| ACCESS NATIONAL CORPORATION                                           |   |
|-----------------------------------------------------------------------|--------|
| Consolidated Balance Sheets                                           |   |
| (In Thousands, Except for Share Data)                                 |   |
|                                                                  |   | Year Ended December 31, |   |
|                                                                  |   | 2010 |   |   | 2009 |   |
| Assets                                                                |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |
| Cash and due from banks                                               |   | $ | 9,198 |   |   | $ | 5,965 |   |
| Interest-bearing deposits in other banks and federal funds sold       |   |   | 102,709 |   |   |   | 25,256 |   |
| Securities available for sale, at fair value                          |   |   | 124,307 |   |   |   | 43,095 |   |
| Restricted stock                                                      |   |   | 4,438 |   |   |   | 4,743 |   |
| Loans held for sale                                                   |   |   | 82,244 |   |   |   | 76,232 |   |
| Loans, net of allowance for loan losses 2010 - $10,527; 2009 - $9,127 |   |   | 481,002 |   |   |   | 477,437 |   |
| Premises and equipment, net                                           |   |   | 8,934 |   |   |   | 8,759 |   |
| Accrued interest receivable and other assets                          |   |   | 18,992 |   |   |   | 25,392 |   |
| Total assets                                                          |   | $ | 831,824 |   |   | $ | 666,879 |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Liabilities and Shareholders' Equity                                  |   |   |   |   |   |   |   |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Liabilities                                                           |   |   |   |   |   |   |   |   |
| Deposits                                                              |   |   |   |   |   |   |   |   |
| Noninterest-bearing demand deposits                                   |   | $ | 83,972 |   |   | $ | 69,782 |   |
| Savings and interest-bearing deposits                                 |   |   | 158,352 |   |   |   | 138,988 |   |
| Time deposits                                                         |   |   | 385,524 |   |   |   | 257,875 |   |
| Total deposits                                                        |   |   | 627,848 |   |   |   | 466,645 |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Short-term borrowings                                                 |   |   | 80,348 |   |   |   | 64,249 |   |
| Long-term borrowings                                                  |   |   | 37,034 |   |   |   | 46,330 |   |
| Subordinated debentures                                               |   |   | 6,186 |   |   |   | 6,186 |   |
| Other liabilities and accrued expenses                                |   |   | 8,215 |   |   |   | 15,691 |   |
| Total liabilities                                                     |   |   | 759,631 |   |   |   | 599,101 |   |
|                                                                  |   |   |   |   |   |   |   |   |
| Shareholders' Equity                                                  |   |   |   |   |   |   |   |   |
| Common stock, par value, $0.835, authorized 60,000,000 shares,        |   |   |   |   |   |   |   |   |
| issued and outstanding, 10,376,169 - 2010 and 10,537,428 - 2009       |   |   | 8,664 |   |   |   | 8,799 |   |
| Additional paid in capital                                            |   |   | 17,794 |   |   |   | 18,552 |   |
| Retained earnings                                                     |   |   | 47,530 |   |   |   | 40,377 |   |
| Accumulated other comprehensive income, net                           |   |   | (1,795 | ) |   |   | 50 |   |
| Total shareholders' equity                                            |   |   | 72,193 |   |   |   | 67,778 |   |
| Total liabilities and shareholders' equity                            |   | $ | 831,824 |   |   | $ | 666,879 |   |
|                                                                  |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.          |   |   |

----

| ACCESS NATIONAL CORPORATION                                  |   |
|--------------------------------------------------------------|--------|
| Consolidated Statements of Income                            |   |
| (In Thousands, Except for Share Data)                        |   |
|                                                         |   |   |   |   |   |   |   |   |   |
|                                                         |   | Year Ended December 31, |   |
|                                                         |   | 2010 |   |   | 2009 |   |   | 2008 |   |
| Interest and Dividend Income                                 |   |   |   |   |   |   |   |   |   |
| Loans                                                        |   | $ | 32,691 |   |   | $ | 34,334 |   |   | $ | 34,875 |   |
| Interest-bearing deposits and federal funds sold             |   |   | 210 |   |   |   | 154 |   |   |   | 486 |   |
| Securities                                                   |   |   | 2,242 |   |   |   | 3,038 |   |   |   | 3,431 |   |
| Total interest and dividend income                           |   |   | 35,143 |   |   |   | 37,526 |   |   |   | 38,792 |   |
| Interest Expense                                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                     |   |   | 7,633 |   |   |   | 10,568 |   |   |   | 14,051 |   |
| Short-term borrowings                                        |   |   | 763 |   |   |   | 1,261 |   |   |   | 1,077 |   |
| Long-term borrowings                                         |   |   | 1,502 |   |   |   | 1,901 |   |   |   | 2,195 |   |
| Subordinated debentures                                      |   |   | 216 |   |   |   | 238 |   |   |   | 417 |   |
| Total interest expense                                       |   |   | 10,114 |   |   |   | 13,968 |   |   |   | 17,740 |   |
| Net interest income                                          |   |   | 25,029 |   |   |   | 23,558 |   |   |   | 21,052 |   |
|    Provision for loan losses                  |   |   | 2,816 |   |   |   | 6,064 |   |   |   | 5,423 |   |
| Net interest income after provision for loan losses          |   |   | 22,213 |   |   |   | 17,494 |   |   |   | 15,629 |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest Income                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Service fees on deposit accounts                             |   |   | 666 |   |   |   | 536 |   |   |   | 438 |   |
| Gain on sale of loans                                        |   |   | 32,501 |   |   |   | 49,262 |   |   |   | 24,859 |   |
| Mortgage broker fee income                                   |   |   | 1,642 |   |   |   | 918 |   |   |   | 1,672 |   |
| Other income                                                 |   |   | (149 | ) |   |   | 6,250 |   |   |   | 3,844 |   |
| Total noninterest income                                     |   |   | 34,660 |   |   |   | 56,966 |   |   |   | 30,813 |   |
| Noninterest Expense                                          |   |   |   |   |   |   |   |   |   |   |   |   |
| Compensation and employee benefits                           |   |   | 22,047 |   |   |   | 28,122 |   |   |   | 20,781 |   |
| Occupancy                                                    |   |   | 2,061 |   |   |   | 1,726 |   |   |   | 1,546 |   |
| Furniture and equipment                                      |   |   | 545 |   |   |   | 771 |   |   |   | 933 |   |
| Other                                                        |   |   | 20,118 |   |   |   | 28,352 |   |   |   | 15,738 |   |
| Total noninterest expense                                    |   |   | 44,771 |   |   |   | 58,971 |   |   |   | 38,998 |   |
| Income before income taxes                                   |   |   | 12,102 |   |   |   | 15,489 |   |   |   | 7,444 |   |
| Provision for income taxes                                   |   |   | 4,526 |   |   |   | 5,854 |   |   |   | 2,700 |   |
| Net Income                                                   |   | $ | 7,576 |   |   | $ | 9,635 |   |   | $ | 4,744 |   |
| Earnings per common share:                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   | $ | 0.72 |   |   | $ | 0.93 |   |   | $ | 0.46 |   |
| Diluted                                                      |   | $ | 0.72 |   |   | $ | 0.92 |   |   | $ | 0.46 |   |
| Average outstanding shares:                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                        |   |   | 10,503,383 |   |   |   | 10,391,348 |   |   |   | 10,298,631 |   |
| Diluted                                                      |   |   | 10,525,258 |   |   |   | 10,432,857 |   |   |   | 10,423,555 |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements. |   |   |   |   |   |   |   |   |   |   |   |   |

----

| ACCESS NATIONAL CORPORATION                                  |   |
|--------------------------------------------------------------|--------|
| Consolidated Statements of Changes in Shareholders' Equity   |   |
| (In Thousands, Except for Share Data)                        |   |
|                                                         |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                         |   |   |   |   |   |   |   |   |   |   | Other |   |   |   |   |
|                                                         |   |   |   |   | Additional |   |   |   |   |   | Compre- |   |   |   |   |
|                                                         |   | Common |   |   | Paid in |   |   | Retained |   |   | hensive |   |   |   |   |
|                                                         |   | Stock |   |   | Capital |   |   | Earnings |   |   | Income (Loss) |   |   | Total |   |
| Balance, December 31, 2007                                   |   | $ | 9,052 |   |   | $ | 21,833 |   |   | $ | 26,846 |   |   | $ | 230 |   |   | $ | 57,961 |   |
| Comprehensive income:                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                   |   |   | - |   |   |   | - |   |   |   | 4,744 |   |   |   | - |   |   |   | 4,744 |   |
| Other comprehensive income,                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| unrealized holdings gains                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| arising during the period                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (net of tax, $307)                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 597 |   |   |   | 597 |   |
| Total comprehensive income                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,341 |   |
| Stock options exercised (137,682 shares)                     |   |   | 115 |   |   |   | 284 |   |   |   | - |   |   |   | - |   |   |   | 399 |   |
| Dividend reinvestment plan (87,171 shares)                   |   |   | 73 |   |   |   | 398 |   |   |   | - |   |   |   | - |   |   |   | 471 |   |
| Repurchase of common stock under share                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| repurchase program (824,836 shares)                          |   |   | (689 | ) |   |   | (5,241 | ) |   |   | - |   |   |   | - |   |   |   | (5,930 | ) |
| Cash dividend                                                |   |   | - |   |   |   | - |   |   |   | (433 | ) |   |   | - |   |   |   | (433 | ) |
| Stock-based compensation                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| expense recognized in earnings                               |   |   | - |   |   |   | 136 |   |   |   | - |   |   |   | - |   |   |   | 136 |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008                                   |   | $ | 8,551 |   |   | $ | 17,410 |   |   | $ | 31,157 |   |   | $ | 827 |   |   | $ | 57,945 |   |
| Comprehensive income:                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                   |   |   | - |   |   |   | - |   |   |   | 9,635 |   |   |   | - |   |   |   | 9,635 |   |
| Other comprehensive income,                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| unrealized holdings losses                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| arising during the period                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (net of tax, $400)                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (777 | ) |   |   | (777 | ) |
| Total comprehensive income                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 8,858 |   |
| Stock options exercised (184,452 shares)                     |   |   | 154 |   |   |   | 470 |   |   |   | - |   |   |   | - |   |   |   | 624 |   |
| Dividend reinvestment plan (146,759 shares)                  |   |   | 123 |   |   |   | 654 |   |   |   | - |   |   |   | - |   |   |   | 777 |   |
| Repurchase of common stock under share                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| repurchase program (34,530 shares)                           |   |   | (29 | ) |   |   | (144 | ) |   |   | - |   |   |   | - |   |   |   | (173 | ) |
| Cash dividend                                                |   |   | - |   |   |   | - |   |   |   | (415 | ) |   |   | - |   |   |   | (415 | ) |
| Stock-based compensation                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| expense recognized in earnings                               |   |   | - |   |   |   | 162 |   |   |   | - |   |   |   | - |   |   |   | 162 |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009                                   |   | $ | 8,799 |   |   | $ | 18,552 |   |   | $ | 40,377 |   |   | $ | 50 |   |   | $ | 67,778 |   |
| Comprehensive income:                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                   |   |   | - |   |   |   | - |   |   |   | 7,576 |   |   |   | - |   |   |   | 7,576 |   |
| Other comprehensive income,                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| unrealized holdings losses                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| arising during the period                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (net of tax, $951)                                           |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (1,845 | ) |   |   | (1,845 | ) |
| Total comprehensive income                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,731 |   |
| Stock options exercised (15,000 shares)                      |   |   | 13 |   |   |   | 38 |   |   |   | - |   |   |   | - |   |   |   | 51 |   |
| Dividend reinvestment plan (74,721 shares)                   |   |   | 62 |   |   |   | 354 |   |   |   | - |   |   |   | - |   |   |   | 416 |   |
| Repurchase of common stock under share                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| repurchase program (250,980 shares)                          |   |   | (210 | ) |   |   | (1,325 | ) |   |   | - |   |   |   | - |   |   |   | (1,535 | ) |
| Cash dividend                                                |   |   | - |   |   |   | - |   |   |   | (423 | ) |   |   | - |   |   |   | (423 | ) |
| Stock-based compensation                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| expense recognized in earnings                               |   |   | - |   |   |   | 175 |   |   |   | - |   |   |   | - |   |   |   | 175 |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2010                                   |   | $ | 8,664 |   |   | $ | 17,794 |   |   | $ | 47,530 |   |   | $ | (1,795 | ) |   | $ | 72,193 |   |
|                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements. |   |

----

|                                                                            |   | Year Ended December 31, |     |
|---------------------------------------------------------------------------------|--------|----------------------------------------|----------|
|                                                                            |   | 2010                                   |     |   | 2009 |   |   | 2008 |   |
| Cash Flows from Operating Activities                                            |   |                                   |     |   |   |   |   |   |   |
| Net income                                                                      |   | $                                      | 7,576    |   |   | $ | 9,635 |   |   | $ | 4,744 |   |
| Adjustments to reconcile net income to net cash provided by (used in)           |   |                                   |     |   |   |   |   |   |   |   |   |   |
| operating activities:                                                           |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                                                       |   |                                   | 2,816    |   |   |   | 6,064 |   |   |   | 5,423 |   |
| Provision for losses on mortgage loans sold                                     |   |                                   | 3,836    |   |   |   | 5,050 |   |   |   | 2,095 |   |
| Writedown and gain of other real estate owned                                   |   |                                   | 916      |   |   |   | 1,245 |   |   |   | - |   |
| Gain on sale of securities                                                      |   |                                   | (186     | ) |   |   | (984 | ) |   |   | (12 | ) |
| Deferred tax benefit                                                            |   |                                   | (66      | ) |   |   | (1,525 | ) |   |   | (906 | ) |
| Stock-based compensation                                                        |   |                                   | 175      |   |   |   | 162 |   |   |   | 136 |   |
| Valuation allowance on derivatives                                              |   |                                   | (114     | ) |   |   | (75 | ) |   |   | (231 | ) |
| Net amortization on securities                                                  |   |                                   | 105      |   |   |   | 72 |   |   |   | 2 |   |
| Depreciation and amortization                                                   |   |                                   | 440      |   |   |   | 565 |   |   |   | 747 |   |
| Loss on disposal of assets                                                      |   |                                   | 6        |   |   |   | 2 |   |   |   | 5 |   |
| Changes in assets and liabilities:                                              |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Valuation of loans held for sale carried at fair value                          |   |                                   | 771      |   |   |   | (1,626 | ) |   |   | (2,109 | ) |
| Originations of loans held for sale                                             |   |                                   | (824,738 | ) |   |   | (1,515,880 | ) |   |   | (775,857 | ) |
| Proceed from sale of loans held for sale                                        |   |                                   | 817,955  |   |   |   | 1,525,586 |   |   |   | 732,798 |   |
| Decrease (increase) in other assets                                             |   |                                   | 4,060    |   |   |   | (8,228 | ) |   |   | (8,221 | ) |
| (Decrease) increase in other liabilities                                        |   |                                   | (11,113  | ) |   |   | 2,530 |   |   |   | 2,404 |   |
| Net cash  (used in) provided by operating activities                  |   |                                   | 2,439    |   |   |   | 22,593 |   |   |   | (38,982 | ) |
| Cash Flows from Investing Activities                                            |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Proceeds from maturities and calls of securities available for sale             |   |                                   | 155,718  |   |   |   | 63,556 |   |   |   | 61,357 |   |
| Proceeds from sale of securities                                                |   |                                   | 20,186   |   |   |   | 15,312 |   |   |   | 2,939 |   |
| Purchases of securities available for sale                                      |   |                                   | (259,527 | ) |   |   | (35,955 | ) |   |   | (80,840 | ) |
| Net increase in loans                                                           |   |                                   | (11,439  | ) |   |   | (5,035 | ) |   |   | (13,754 | ) |
| Proceeds from sale of assets                                                    |   |                                   | -        |   |   |   | 23 |   |   |   | 35 |   |
| Proceeds from sales of other real estate owned                                  |   |                                   | 7,394    |   |   |   | 350 |   |   |   | 2,449 |   |
| Purchases of premises and equipment                                             |   |                                   | (602     | ) |   |   | (58 | ) |   |   | (199 | ) |
| Net cash (used in) provided by investing activities                             |   |                                   | (88,270  | ) |   |   | 38,193 |   |   |   | (28,013 | ) |
| Cash Flows from Financing Activities                                            |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in demand, interest-bearing demand and savings deposits |   |                                   | 33,554   |   |   |   | 37,940 |   |   |   | (31,505 | ) |
| Net increase (decrease) in time deposits                                        |   |                                   | 127,649  |   |   |   | (56,696 | ) |   |   | 43,488 |   |
| Increase (decrease) in securities sold under agreement to repurchase            |   |                                   | 14,244   |   |   |   | (4,584 | ) |   |   | 16,574 |   |
| Net increase (decrease) in other short-term borrowings                          |   |                                   | 1,856    |   |   |   | (34,742 | ) |   |   | 45,326 |   |
| Net (decrease) increase in long-term borrowings                                 |   |                                   | (9,296   | ) |   |   | 5,223 |   |   |   | 1,583 |   |
| Proceeds from issuance of common stock                                          |   |                                   | 467      |   |   |   | 1,400 |   |   |   | 870 |   |
| Repurchase of common stock                                                      |   |                                   | (1,535   | ) |   |   | (173 | ) |   |   | (5,930 | ) |
| Dividends paid                                                                  |   |                                   | (423     | ) |   |   | (415 | ) |   |   | (433 | ) |
| Net cash provided by (used in) financing activities                             |   |                                   | 166,516  |   |   |   | (52,047 | ) |   |   | 69,973 |   |
|                                                                            |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Increase in cash and cash equivalents                                           |   |                                   | 80,685   |   |   |   | 8,739 |   |   |   | 2,978 |   |
| Cash and Cash Equivalents                                                       |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Beginning                                                                       |   |                                   | 31,221   |   |   |   | 22,482 |   |   |   | 19,504 |   |
| Ending                                                                          |   | $                                      | 111,906  |   |   | $ | 31,221 |   |   | $ | 22,482 |   |
| Supplemental Disclosures of Cash Flow Information                               |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Cash payments for interest                                                      |   | $                                      | 9,854    |   |   | $ | 13,602 |   |   | $ | 17,360 |   |
| Cash payments for income taxes                                                  |   | $                                      | 4,908    |   |   | $ | 7,113 |   |   | $ | 3,480 |   |
| Supplemental Disclosures of Noncash Investing Activities                        |   |                                   |     |   |   |   |   |   |   |   |   |   |
| Unrealized (loss) gain on securities available for sale                         |   | $                                      | (2,796   | ) |   | $ | (1,176 | ) |   | $ | 904 |   |
| Loans transferred to other real estate owned                                    |   | $                                      | 5,058    |   |   | $ | 2,250 |   |   | $ | 4,455 |   |
|                                                                            |   |                                   |     |   |   |   |   |   |   |   |   |   |
| See accompanying notes to consolidated financial statements.                    |   |

----

----

----

----

----

|                       |   | December 31, 2010 |    |
|----------------------------|--------|-------------------|---------|
|                       |   | Amortized Cost    |    |   | GrossUnrealized Gains |   |   | GrossUnrealized(Losses) |   |   | EstimatedFair Value |   |
|                       |   |              |    |   | (In Thousands) |   |   |   |   |
| U.S. Government agencies   |   | $                 | 124,388 |   |   | $ | 62 |   |   | $ | (2,738 | ) |   | $ | 121,712 |   |
| Mortgage backed securities |   |              | 670     |   |   |   | - |   |   |   | (40 | ) |   |   | 630 |   |
| Municipals - taxable       |   |              | 470     |   |   |   | 2 |   |   |   | - |   |   |   | 472 |   |
| CRA Mutual fund            |   |              | 1,500   |   |   |   | - |   |   |   | (7 | ) |   |   | 1,493 |   |
|                       |   | $                 | 127,028 |   |   | $ | 64 |   |   | $ | (2,785 | ) |   | $ | 124,307 |   |
|                       |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   | December 31, 2009 |    |
|                       |   | Amortized Cost    |    |   | GrossUnrealizedGains |   |   | GrossUnrealized(Losses) |   |   | EstimatedFair Value |   |
|                       |   |              |    |   |   | (In Thousands) |   |   |   |   |   |
| U.S. Government agencies   |   | $                 | 40,022  |   |   | $ | 144 |   |   | $ | (12 | ) |   | $ | 40,154 |   |
| Mortgage backed securities |   |              | 808     |   |   |   | - |   |   |   | (65 | ) |   |   | 743 |   |
| Municipals - taxable       |   |              | 690     |   |   |   | 9 |   |   |   | - |   |   |   | 699 |   |
| CRA Mutual fund            |   |              | 1,500   |   |   |   | - |   |   |   | (1 | ) |   |   | 1,499 |   |
|                       |   | $                 | 43,020  |   |   | $ | 153 |   |   | $ | (78 | ) |   | $ | 43,095 |   |

----

|                                                  |   | December 31, 2010 |    |
|-------------------------------------------------------|--------|-------------------|---------|
|                                                  |   |              |    |   | Estimated |   |
|                                                  |   | Amortized         |    |   | Fair |   |
|                                                  |   | Cost              |    |   | Value |   |
|                                                  |   | (In Thousands)    |    |
| U.S. Government agencies                              |   |              |    |   |   |   |
|    Due in one year or less             |   | $                 | 5,000   |   |   | $ | 5,022 |   |
|    Due after one through five years    |   |              | 50,026  |   |   |   | 49,751 |   |
|    Due after five through ten years    |   |              | 29,978  |   |   |   | 29,181 |   |
|    Due after ten through fifteen years |   |              | 39,384  |   |   |   | 37,758 |   |
| Municipals - taxable                                  |   |              |    |   |   |   |   |   |
|    Due after one through five years    |   |              | 470     |   |   |   | 472 |   |
| Mortgage backed securities:                           |   |              |    |   |   |   |   |   |
|    Due after fifteen years             |   |              | 670     |   |   |   | 630 |   |
| CRA Mutual fund                                       |   |              | 1,500   |   |   |   | 1,493 |   |
|                                                  |   | $                 | 127,028 |   |   | $ | 124,307 |   |

----

|                                      |   | Securities in a loss   |   |   | Securities in a loss   |   |   |   |   |   |       |   |
|-------------------------------------------|--------|------------------------|--------|--------|------------------------|--------|--------|--------|--------|--------|------------|--------|
|                                      |   | Position for less than |   |   | Position for 12 Months |   |   |   |   |   |       |   |
|                                      |   | 12 Months              |   |   | or Longer              |   |   | Total  |   |
| December 31, 2010                         |   | Fair                   |   |   | Unrealized             |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                      |   | Value                  |   |   | Losses                 |   |   | Value  |   |   | Losses     |   |   | Value |   |   | Losses |   |
|                                      |   | (In Thousands)         |   |
| Investment securities available for sale: |   |                   |   |   |                   |   |   |   |   |   |       |   |   |   |   |   |   |   |
|                                      |   |                   |   |   |                   |   |   |   |   |   |       |   |   |   |   |   |   |   |
| Mortgage backed securities                |   | $                      | 630    |   |                   | $      | (40    | )      |   | $      | -          |   |   | $ | - |   |   | $ | 630 |   |   | $ | (40 | ) |
| U.S. Government agencies                  |   |                   | 96,623 |   |                   |   | (2,738 | )      |   |   | -          |   |   |   | - |   |   |   | 96,623 |   |   |   | (2,738 | ) |
| CRA Mutual fund                           |   |                   | 1,493  |   |                   |   | (7     | )      |   |   | -          |   |   |   | - |   |   |   | 1,493 |   |   |   | (7 | ) |
| Total                                     |   | $                      | 98,746 |   |                   | $      | (2,785 | )      |   | $      | -          |   |   | $ | - |   |   | $ | 98,746 |   |   | $ | (2,785 | ) |
|                                      |   |                   |   |   |                   |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   | Securities in a loss   |   |   | Securities in a loss   |   |   |   |   |   |       |   |   |   |
|                                      |   | Position for less than |   |   | Position for 12 Months |   |   |   |   |   |       |   |   |   |
|                                      |   | 12 Months              |   |   | or Longer              |   |   | Total  |   |
| December 31, 2009                         |   | Fair                   |   |   | Unrealized             |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                      |   | Value                  |   |   | Losses                 |   |   | Value  |   |   | Losses     |   |   | Value |   |   | Losses |   |
|                                      |   | (In Thousands)         |   |
| Investment securities available for sale: |   |                   |   |   |                   |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                      |   |                   |   |   |                   |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage backed securities                |   | $                      | -      |   |                   | $      | -      |   |   | $      | 710        |   |   | $ | (65 | ) |   | $ | 710 |   |   | $ | (65 | ) |
| U.S. Government agencies                  |   |                   | 9,988  |   |                   |   | (12    | )      |   |   | -          |   |   |   | - |   |   |   | 9,988 |   |   |   | (12 | ) |
| CRA Mutual fund                           |   |                   | -      |   |                   |   | -      |   |   |   | 1,499      |   |   |   | (1 | ) |   |   | 1,499 |   |   |   | (1 | ) |
| Total                                     |   | $                      | 9,988  |   |                   | $      | (12    | )      |   | $      | 2,209      |   |   | $ | (66 | ) |   | $ | 12,197 |   |   | $ | (78 | ) |

| Restricted Stock:          |   | December 31, 2010 |   |   | December 31, 2009 |   |
|----------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                       |   | (In Thousands)    |   |
|                       |   |              |   |   |              |   |
| Federal Reserve Bank stock |   | $                 | 999    |   |              | $      | 894 |   |
|                       |   |              |   |   |              |   |   |   |
| FHLB stock                 |   |              | 3,439  |   |              |   | 3,849 |   |
|                       |   | $                 | 4,438  |   |              | $      | 4,743 |   |

----

|                           |   | Year Ended December 31, |    |
|--------------------------------|--------|-------------------------|---------|
|                           |   | 2010                    |    |   | 2009 |   |
|                           |   | (In Thousands)          |    |
| Commercial real estate         |   | $                       | 217,999 |   |   | $ | 220,301 |   |
| Residential real estate        |   |                    | 137,752 |   |   |   | 150,792 |   |
| Commercial                     |   |                    | 94,798  |   |   |   | 72,628 |   |
| Real estate construction       |   |                    | 38,093  |   |   |   | 41,508 |   |
| Consumer                       |   |                    | 2,887   |   |   |   | 1,335 |   |
| Total loans                    |   |                    | 491,529 |   |   |   | 486,564 |   |
| Less allowance for loan losses |   |                    | 10,527  |   |   |   | 9,127 |   |
| Net loans                      |   | $                       | 481,002 |   |   | $ | 477,437 |   |

|                                   |   | Year Ended December 31, |   |
|----------------------------------------|--------|-------------------------|--------|
|                                   |   | 2010                    |   |   | 2009 |   |   | 2008 |   |
|                                   |   | (In Thousands)          |   |
| Balance, beginning of year             |   | $                       | 9,127  |   |   | $ | 7,462 |   |   | $ | 7,462 |   |
| Provision charged to operating expense |   |                    | 2,816  |   |   |   | 6,064 |   |   |   | 5,423 |   |
| Loan recoveries                        |   |                    | 632    |   |   |   | 911 |   |   |   | 137 |   |
| Loan charge-offs                       |   |                    | (2,048 | ) |   |   | (5,310 | ) |   |   | (5,560 | ) |
| Balance, end of year                   |   | $                       | 10,527 |   |   | $ | 9,127 |   |   | $ | 7,462 |   |

----

|                                                            |   | Allowance for Loan Losses and Recorded Investment in Loans |    |
|-----------------------------------------------------------------|--------|------------------------------------------------------------|---------|
|                                                            |   | For the Year Ended December 31,                            |    |
| 2010                                                            |   | CommercialReal Estate                                      |    |   | ResidentialReal Estate |   |   | Commercial |   |   | Real EstateConstruction |   |   | Consumer |   |   | Total |   |
|                                                            |   | (In Thousands)                                             |    |
| Allowance for credit losses:                                    |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning Balance                                               |   | $                                                          | 4,407   |   |   | $ | 2,606 |   |   | $ | 1,562 |   |   | $ | 539 |   |   | $ | 13 |   |   | $ | 9,127 |   |
| Charge-offs                                                     |   |                                                       | (624    | ) |   |   | (875 | ) |   |   | (501 | ) |   |   | (48 | ) |   |   | - |   |   |   | (2,048 | ) |
| Recoveries                                                      |   |                                                       | 109     |   |   |   | 38 |   |   |   | 385 |   |   |   | 99 |   |   |   | 1 |   |   |   | 632 |   |
| Provisions                                                      |   |                                                       | 1,424   |   |   |   | 1,156 |   |   |   | 60 |   |   |   | 167 |   |   |   | 9 |   |   |   | 2,816 |   |
| Ending Balance                                                  |   | $                                                          | 5,316   |   |   | $ | 2,925 |   |   | $ | 1,506 |   |   | $ | 757 |   |   | $ | 23 |   |   | $ | 10,527 |   |
|                                                            |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: impaired loans                                  |   | $                                                          | 960     |   |   | $ | 283 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 1,243 |   |
| Ending balance: loans not considered impaired                   |   | $                                                          | 4,356   |   |   | $ | 2,642 |   |   | $ | 1,506 |   |   | $ | 757 |   |   | $ | 23 |   |   | $ | 9,284 |   |
| Ending balance: loans acquired with deteriorated credit quality |   | $                                                          | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                            |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                           |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                                  |   | $                                                          | 217,999 |   |   | $ | 137,752 |   |   | $ | 94,798 |   |   | $ | 38,093 |   |   | $ | 2,887 |   |   | $ | 491,529 |   |
| Ending balance: impaired loans                                  |   | $                                                          | 6,712   |   |   | $ | 949 |   |   | $ | 900 |   |   | $ | - |   |   | $ | - |   |   | $ | 8,561 |   |
| Ending balance: loans not considered impaired                   |   | $                                                          | 211,287 |   |   | $ | 136,803 |   |   | $ | 93,898 |   |   | $ | 38,093 |   |   | $ | 2,887 |   |   | $ | 482,968 |   |
| Ending balance: loans acquired with deteriorated credit quality |   | $                                                          | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                            |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2009                                                            |   | CommercialReal Estate                                      |    |   | ResidentialReal Estate |   |   | Commercial |   |   | Real EstateConstruction |   |   | Consumer |   |   | Total |   |
|                                                            |   | (In Thousands)                                             |    |
| Allowance for credit losses:                                    |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning Balance                                               |   | $                                                          | 3,031   |   |   | $ | 1,819 |   |   | $ | 1,801 |   |   | $ | 799 |   |   | $ | 12 |   |   | $ | 7,462 |   |
| Charge-offs                                                     |   |                                                       | (1,648  | ) |   |   | (851 | ) |   |   | (1,541 | ) |   |   | (1,247 | ) |   |   | (23 | ) |   |   | (5,310 | ) |
| Recoveries                                                      |   |                                                       | 294     |   |   |   | 79 |   |   |   | 374 |   |   |   | 66 |   |   |   | 98 |   |   |   | 911 |   |
| Provisions                                                      |   |                                                       | 2,721   |   |   |   | 1,470 |   |   |   | 929 |   |   |   | 921 |   |   |   | 23 |   |   |   | 6,064 |   |
| Ending Balance                                                  |   | $                                                          | 4,398   |   |   | $ | 2,517 |   |   | $ | 1,563 |   |   | $ | 539 |   |   | $ | 110 |   |   | $ | 9,127 |   |
|                                                            |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance: impaired loans                                  |   | $                                                          | 160     |   |   | $ | 119 |   |   | $ | 63 |   |   | $ | 20 |   |   | $ | - |   |   | $ | 362 |   |
| Ending balance: loans not considered impaired                   |   | $                                                          | 4,238   |   |   | $ | 2,398 |   |   | $ | 1,500 |   |   | $ | 519 |   |   | $ | 110 |   |   | $ | 8,765 |   |
| Ending balance: loans acquired with deteriorated credit quality |   | $                                                          | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                            |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                           |   |                                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                                  |   | $                                                          | 220,301 |   |   | $ | 150,792 |   |   | $ | 72,628 |   |   | $ | 41,508 |   |   | $ | 1,335 |   |   | $ | 486,564 |   |
| Ending balance: impaired loans                                  |   | $                                                          | 3,631   |   |   | $ | 1,504 |   |   | $ | 208 |   |   | $ | 1,689 |   |   | $ | - |   |   | $ | 7,032 |   |
| Ending balance: loans not considered impaired                   |   | $                                                          | 216,670 |   |   | $ | 149,288 |   |   | $ | 72,420 |   |   | $ | 39,819 |   |   | $ | 1,335 |   |   | $ | 479,532 |   |
| Ending balance: loans acquired with deteriorated credit quality |   | $                                                          | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

----

|                                          |   | Credit Quality Indicators |    |
|-----------------------------------------------|--------|---------------------------|---------|
|                                          |   | As of December 31,        |    |
| Credit Risk Profile by Regulatory Risk Rating |   |                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |                      |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Real Estate |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   | Commercial Real Estate    |    |   | Residential Real Estate |   |   | Commercial |   |   | Construction |   |   | Consumer |   |   | Totals |   |
|                                          |   | 2010                      |    |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                          |   | (In Thousands)            |    |
| Pass                                          |   | $                         | 173,101 |   |   | $ | 186,562 |   |   | $ | 125,808 |   |   | $ | 137,663 |   |   | $ | 87,883 |   |   | $ | 65,243 |   |   | $ | 36,343 |   |   | $ | 38,320 |   |   | $ | 2,887 |   |   | $ | 1,335 |   |   | $ | 426,022 |   |   | $ | 429,123 |   |
| Special mention                               |   |                      | 26,016  |   |   |   | 18,322 |   |   |   | 4,828 |   |   |   | 3,438 |   |   |   | 4,827 |   |   |   | 4,391 |   |   |   | 1,585 |   |   |   | 1,615 |   |   |   | - |   |   |   | - |   |   |   | 37,256 |   |   |   | 27,766 |   |
| Substandard                                   |   |                      | 19,613  |   |   |   | 12,903 |   |   |   | 7,218 |   |   |   | 9,370 |   |   |   | 2,498 |   |   |   | 3,226 |   |   |   | 310 |   |   |   | 381 |   |   |   | - |   |   |   | - |   |   |   | 29,639 |   |   |   | 25,880 |   |
| Doubtful                                      |   |                      | 143     |   |   |   | 3,192 |   |   |   | - |   |   |   | 430 |   |   |   | - |   |   |   | 136 |   |   |   | - |   |   |   | 1,639 |   |   |   | - |   |   |   | - |   |   |   | 143 |   |   |   | 5,397 |   |
| Unearned income                               |   |                      | (874    | ) |   |   | (678 | ) |   |   | (102 | ) |   |   | (109 | ) |   |   | (410 | ) |   |   | (368 | ) |   |   | (145 | ) |   |   | (447 | ) |   |   | - |   |   |   | - |   |   |   | (1,531 | ) |   |   | (1,602 | ) |
| Total                                         |   | $                         | 217,999 |   |   | $ | 220,301 |   |   | $ | 137,752 |   |   | $ | 150,792 |   |   | $ | 94,798 |   |   | $ | 72,628 |   |   | $ | 38,093 |   |   | $ | 41,508 |   |   | $ | 2,887 |   |   | $ | 1,335 |   |   | $ | 491,529 |   |   | $ | 486,564 |   |

----

| Credit Risk Profile Based on Payment Activity |   |
|-----------------------------------------------|--------|
| As of December 31,                            |   |
|                                          |   |   |   |   |   |   |   |   |   |   | Real Estate |   |   |   |   |   |   |   |
|                                          |   | Commercial Real Estate |   |   | Residential Real Estate |   |   | Commercial |   |   | Construction |   |   | Consumer |   |   | Totals |   |
|                                          |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                          |   | (In Thousands) |   |
| Performing                                    |   | $ | 211,287 |   |   | $ | 216,670 |   |   | $ | 136,803 |   |   | $ | 149,288 |   |   | $ | 93,898 |   |   | $ | 72,420 |   |   | $ | 38,093 |   |   | $ | 39,819 |   |   | $ | 2,887 |   |   | $ | 1,335 |   |   | $ | 482,968 |   |   | $ | 479,532 |   |
| Non-performing                                |   |   | 6,712 |   |   |   | 3,631 |   |   |   | 949 |   |   |   | 1,504 |   |   |   | 900 |   |   |   | 208 |   |   |   | - |   |   |   | 1,689 |   |   |   | - |   |   |   | - |   |   |   | 8,561 |   |   |   | 7,032 |   |
| Total                                         |   | $ | 217,999 |   |   | $ | 220,301 |   |   | $ | 137,752 |   |   | $ | 150,792 |   |   | $ | 94,798 |   |   | $ | 72,628 |   |   | $ | 38,093 |   |   | $ | 41,508 |   |   | $ | 2,887 |   |   | $ | 1,335 |   |   | $ | 491,529 |   |   | $ | 486,564 |   |

|                           |   | Age Analysis of Past Due Loans |   |
|--------------------------------|--------|--------------------------------|--------|
|                           |   |                           |   |
|                           |   | Year Ended December 31, 2010   |   |
|                           |   | 30-59 DaysPast Due             |   |   | 60-89 DaysPast Due |   |   | Greater than90 Days PastDue |   |   | Total PastDue |   |   | Non-accrual     Loans      |   |   | CurrentLoans |   |   | TotalLoans |   |
|                           |   | (In Thousands)                 |   |
| Commercial real estate         |   | $                              | -      |   |   | $ | 1,487 |   |   | $ | - |   |   | $ | 1,487 |   |   | $ | 6,712 |   |   | $ | 209,800 |   |   | $ | 217,999 |   |
| Residential real estate        |   |                           | 569    |   |   |   | 382 |   |   |   | 333 |   |   |   | 1,284 |   |   |   | 949 |   |   |   | 135,519 |   |   |   | 137,752 |   |
| Commercial                     |   |                           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 900 |   |   |   | 93,898 |   |   |   | 94,798 |   |
| Real estate construction       |   |                           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 38,093 |   |   |   | 38,093 |   |
| Consumer                       |   |                           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2,887 |   |   |   | 2,887 |   |
| Total                          |   | $                              | 569    |   |   | $ | 1,869 |   |   | $ | 333 |   |   | $ | 2,771 |   |   | $ | 8,561 |   |   | $ | 480,197 |   |   | $ | 491,529 |   |
|                           |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | Year Ended December 31, 2009   |   |
|                           |   | 30-59 DaysPast Due             |   |   | 60-89 DaysPast Due |   |   | Greater than90 Days PastDue |   |   | Total PastDue |   |   | Non-accrualLoans |   |   | CurrentLoans |   |   | TotalLoans |   |
|                           |   | (In Thousands)                 |   |
|  Commercial real estate   |   | $                              | 704    |   |   | $ | - |   |   | $ | - |   |   | $ | 704 |   |   | $ | 3,631 |   |   | $ | 215,966 |   |   | $ | 220,301 |   |
|  Residential real estate  |   |                           | 527    |   |   |   | - |   |   |   | - |   |   |   | 527 |   |   |   | 1,504 |   |   |   | 148,761 |   |   |   | 150,792 |   |
|  Commercial               |   |                           | 36     |   |   |   | - |   |   |   | - |   |   |   | 36 |   |   |   | 208 |   |   |   | 72,384 |   |   |   | 72,628 |   |
|  Real estate construction |   |                           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,689 |   |   |   | 39,819 |   |   |   | 41,508 |   |
|  Consumer                 |   |                           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,335 |   |   |   | 1,335 |   |
|  Total                    |   | $                              | 1,267  |   |   | $ | - |   |   | $ | - |   |   | $ | 1,267 |   |   | $ | 7,032 |   |   | $ | 478,265 |   |   | $ | 486,564 |   |

----

|                                         |   | Impaired Loans               |   |
|----------------------------------------------|--------|------------------------------|--------|
|                                         |   |                         |   |
|                                         |   | Year Ended December 31, 2010 |   |
|                                         |   | RecordedInvestment           |   |   | Unpaid PrincipalBalance |   |   | RelatedAllowance |   |   | Average RecordedInvestment |   |   | Interest IncomeRecognized |   |
|                                         |   | (In Thousands)               |   |
| With no specific related allowance recorded: |   |                         |   |
| Commercial real estate                       |   | $                            | 3,041  |   |   | $ | 3,041 |   |   | $ | - |   |   | $ | 3,110 |   |   | $ | - |   |
| Residential real estate                      |   |                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                   |   |                         | 900    |   |   |   | 900 |   |   |   | - |   |   |   | 306 |   |   |   | - |   |
| Real estate construction                     |   |                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                     |   |                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| With a specific allowance recorded:          |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                       |   |                         | 3,671  |   |   |   | 3,671 |   |   |   | 960 |   |   |   | 3,722 |   |   |   | - |   |
| Residential real estate                      |   |                         | 949    |   |   |   | 949 |   |   |   | 283 |   |   |   | 1,020 |   |   |   | - |   |
| Commercial                                   |   |                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real estate construction                     |   |                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer                                     |   |                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total:                                       |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                       |   | $                            | 6,712  |   |   | $ | 6,712 |   |   | $ | 960 |   |   | $ | 6,832 |   |   | $ | - |   |
| Residential real estate                      |   | $                            | 949    |   |   | $ | 949 |   |   | $ | 283 |   |   | $ | 1,020 |   |   | $ | - |   |
| Commercial                                   |   | $                            | 900    |   |   | $ | 900 |   |   | $ | - |   |   | $ | 306 |   |   | $ | - |   |
| Real estate construction                     |   | $                            | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Consumer                                     |   | $                            | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                         |   | $                            | 8,561  |   |   | $ | 8,561 |   |   | $ | 1,243 |   |   | $ | 8,158 |   |   | $ | - |   |

----

| Following table summarizes non-performing assets: |   |
|---------------------------------------------------|--------|
|                                              |   |   |   |   |   |   |
|                                              |   | December 31, |   |
|                                              |   | 2010 |   |   | 2009 |   |
|                                              |   | (Dollars In Thousands) |   |
| Non-accrual loans:                                |   |   |   |   |   |   |
| Commercial                                        |   | $ | 900 |   |   | $ | 208 |   |
| Commercial real estate                            |   |   | 6,712 |   |   |   | 3,631 |   |
| Real estate construction                          |   |   | - |   |   |   | 1,689 |   |
| Residential real estate                           |   |   | 949 |   |   |   | 1,504 |   |
| Consumer                                          |   |   | - |   |   |   | - |   |
| Total non-accrual loans                           |   |   | 8,561 |   |   |   | 7,032 |   |
|                                              |   |   |   |   |   |   |   |   |
| Other real estate owned ("OREO")                  |   |   | 1,859 |   |   |   | 5,111 |   |
|                                              |   |   |   |   |   |   |   |   |
| Total non-performing assets                       |   | $ | 10,420 |   |   | $ | 12,143 |   |
|                                              |   |   |   |   |   |   |   |   |
| Ratio of non-performing assets to:                |   |   |   |   |   |   |   |   |
| Total loans plus OREO                             |   |   | 2.11 | % |   |   | 2.47 | % |
|                                              |   |   |   |   |   |   |   |   |
| Total assets                                      |   |   | 1.25 | % |   |   | 1.82 | % |

|                          |   | December 31,   |   |
|-------------------------------|--------|----------------|--------|
|                          |   | 2010           |   |   | 2009 |   |
|                          |   | (In Thousands) |   |
| Land                          |   | $              | 2,549  |   |   | $ | 2,549 |   |
| Premises                      |   |           | 5,831  |   |   |   | 5,765 |   |
| Leasehold improvements        |   |           | 1,294  |   |   |   | 1,182 |   |
| Furniture and equipment       |   |           | 3,453  |   |   |   | 3,125 |   |
|                          |   |           | 13,127 |   |   |   | 12,621 |   |
| Less accumulated depreciation |   |           | (4,193 | ) |   |   | (3,862 | ) |
|                          |   | $              | 8,934  |   |   | $ | 8,759 |   |

----

|                                                                                                    |   | Year Ended December 31, |    |
|---------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                    |   | 2010                    |    |   | 2009 |   |
| Type of Account                                                                                         |   | Amount                  |    |   | % |   |   | Amount |   |   | % |   |
|                                                                                                    |   | (Dollars In Thousands)  |    |
| Interest-bearing demand deposits                                                                        |   | $                       | 24,548  |   |   |   | 3.91 | % |   | $ | 25,918 |   |   |   | 5.55 | % |
| Money market deposit accounts                                                                           |   |                    | 107,988 |   |   |   | 17.20 | % |   |   | 99,085 |   |   |   | 21.25 | % |
| Savings accounts                                                                                        |   |                    | 2,979   |   |   |   | 0.47 | % |   |   | 3,985 |   |   |   | 0.85 | % |
| CDARS-Reciprocal time deposits                                                                          |   |                    | 234,221 |   |   |   | 37.31 | % |   |   | 41,550 |   |   |   | 8.90 | % |
| Brokered deposits                                                                                       |   |                    | 56,356  |   |   |   | 8.98 | % |   |   | 129,660 |   |   |   | 27.79 | % |
| Time deposits                                                                                           |   |                    | 117,784 |   |   |   | 18.76 | % |   |   | 96,665 |   |   |   | 20.71 | % |
|             Total interest-bearing deposits |   |                    | 543,876 |   |   |   | 86.63 | % |   |   | 396,863 |   |   |   | 85.05 | % |
| Noninterest-bearing demand deposits                                                                     |   |                    | 83,972  |   |   |   | 13.37 | % |   |   | 69,782 |   |   |   | 14.95 | % |
| Total deposits                                                                                          |   | $                       | 627,848 |   |   |   | 100.00 | % |   | $ | 466,645 |   |   |   | 100.00 | % |

| Year        |   | Amount         |    |
|-------------|--------|----------------|---------|
|        |   | (In Thousands) |    |
| 2011        |   | $              | 304,284 |   |
| 2012        |   |           | 36,600  |   |
| 2013        |   |           | 17,899  |   |
| 2014        |   |           | 5,113   |   |
| 2015        |   |           | 6,743   |   |
| Later years |   |           | 14,885  |   |
|        |   | $              | 385,524 |   |

----

|                                           |   | December 31,           |   |
|------------------------------------------------|--------|------------------------|--------|
|                                           |   | 2010                   |   |   | 2009 |   |
|                                           |   | (Dollars In Thousands) |   |
| Securities sold under agreements to repurchase |   | $                      | 41,047 |   |   | $ | 26,804 |   |
| Commercial paper arrangements                  |   |                   | 28,226 |   |   |   | 16,517 |   |
| FHLB borrowings                                |   |                   | 5,417  |   |   |   | 20,178 |   |
| Federal funds purchased                        |   |                   | -      |   |   |   | - |   |
| US Treasury demand note                        |   |                   | 5,658  |   |   |   | 750 |   |
| Total                                          |   | $                      | 80,348 |   |   | $ | 64,249 |   |
|                                           |   |                   |   |   |   |   |   |   |
| Weighted interest rate                         |   |                   | 0.95   | % |   |   | 1.96 | % |
|                                           |   |                   |   |   |   |   |   |   |
| Average for the year ended December 31:        |   |                   |   |   |   |   |   |   |
| Outstanding                                    |   | $                      | 67,289 |   |   | $ | 64,776 |   |
| Interest rate                                  |   |                   | 1.13   | % |   |   | 1.95 | % |
|                                           |   |                   |   |   |   |   |   |   |
| Maximum month-end outstandings                 |   | $                      | 89,159 |   |   | $ | 73,201 |   |

----

|                                                                          |   | Long Term Borrowings |   |
|-------------------------------------------------------------------------------|--------|--------------------------------|--------|
|                                                                          |   |                           |   |
|                                                                          |   | December 31,              |   |
|                                                                          |   |                           |   |   |   |   |
|                                                                          |   | 2010                           |   |   | 2009 |   |
|                                                                          |   |                           |   |   |   |   |
|   FHLB long-term borrowings                                         |   | $                              | 7,036  |   |   | $ | 16,333 |   |
|   Senior unsecured term note                                        |   |                           | 29,998 |   |   |   | 29,997 |   |
|   Subordinated debenture                                            |   |                           | 6,186  |   |   |   | 6,186 |   |
|             Total |   | $                              | 43,220 |   |   | $ | 52,516 |   |

|        |   | Amount              |   |
|-------------|--------|---------------------|--------|
|        |   | (In Thousands) |   |
| Due in 2013 |   | $                   | 2,250  |   |
| Due in 2014 |   |                | 1,750  |   |
| Due in 2015 |   |                | 3,036  |   |
| Total Due   |   | $                   | 7,036  |   |

----

|                                        |   | December 31,   |   |
|---------------------------------------------|--------|---------------------|--------|
|                                        |   | 2010                |   |   | 2009 |   |
|                                        |   | (In Thousands) |   |
| Deferred tax assets:                        |   |                |   |   |   |   |
| Allowance for loan losses                   |   | $                   | 3,684  |   |   | $ | 3,103 |   |
| Deferred fees                               |   |                | 491    |   |   |   | 509 |   |
| Allowance for losses on mortgage loans sold |   |                | 980    |   |   |   | 1,287 |   |
| Securities available for sale               |   |                | 952    |   |   |   | - |   |
| Other                                       |   |                | 479    |   |   |   | 622 |   |
|                                        |   |                | 6,586  |   |   |   | 5,521 |   |
| Deferred tax liability:                     |   |                |   |   |   |   |   |   |
| Depreciation                                |   |                | 265    |   |   |   | 91 |   |
| Securities available for sale               |   |                | -      |   |   |   | 26 |   |
|                                        |   |                | 265    |   |   |   | 117 |   |
| Net deferred tax assets                     |   |                |   |   |   |   |   |   |
| included in other assets                    |   | $                   | 6,321  |   |   | $ | 5,404 |   |

|                   |   | Year Ended December 31, |   |
|------------------------|--------|----------------------------------------|--------|
|                   |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                   |   | (In Thousands)                    |   |
|                   |   |                                   |   |   |   |   |   |   |   |
| Current tax expense    |   | $                                      | 4,592  |   |   | $ | 7,379 |   |   | $ | 3,606 |   |
| Deferred tax (benefit) |   |                                   | (66    | ) |   |   | (1,525 | ) |   |   | (906 | ) |
|                   |   | $                                      | 4,526  |   |   | $ | 5,854 |   |   | $ | 2,700 |   |

----

|                                                |   | Year Ended December 31, |   |
|-----------------------------------------------------|--------|----------------------------------------|--------|
|                                                |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                                                |   | (In Thousands)                    |   |
| Computed "expected" tax expense                     |   | $                                      | 4,236  |   |   | $ | 5,266 |   |   | $ | 2,531 |   |
| Increase (decrease) in income taxes resulting from: |   |                                   |   |   |   |   |   |   |   |   |   |   |
| State income taxes                                  |   |                                   | 182    |   |   |   | 532 |   |   |   | 144 |   |
| Other                                               |   |                                   | 108    |   |   |   | 56 |   |   |   | 25 |   |
|                                                |   | $                                      | 4,526  |   |   | $ | 5,854 |   |   | $ | 2,700 |   |

| Year   |   | Amount              |   |
|--------|--------|---------------------|--------|
|   |   | (In Thousands) |   |
| 2011   |   | $                   | 417    |   |
| 2012   |   |                | 429    |   |
| 2013   |   |                | 442    |   |
| 2014   |   |                | 456    |   |
| 2015   |   |                | 470    |   |
|   |   | $                   | 2,214  |   |

----

| Allowance For Losses on Mortgage Loans Sold |   |
|---------------------------------------------|--------|
|                                        |   |   |   |
|                                        |   | December 31, |   |
|                                        |   | 2010 |   |   | 2009 |   |
|                                        |   | (In Thousands) |   |
| Balance at beginning of year                |   | $ | 3,332 |   |   | $ | 1,439 |   |
| Provision charged to operating expense      |   |   | 3,836 |   |   |   | 5,050 |   |
| Recoveries                                  |   |   | 68 |   |   |   | 16 |   |
| Charge-offs                                 |   |   | (5,245 | ) |   |   | (3,173 | ) |
| Balance at end of year                      |   | $ | 1,991 |   |   | $ | 3,332 |   |

----

----

----

|                               |   | 2010           |     |   | 2009                |   |   | 2008           |   |
|------------------------------------|--------|----------------|----------|--------|---------------------|--------|--------|----------------|--------|
|                               |   |           |     |   | Weighted            |   |   |           |   |   | Weighted |   |   |   |   |   | Weighted |   |
|                               |   | Number of |     |   | Average             |   |   | Number of |   |   | Average |   |   | Number of |   |   | Average |   |
|                               |   | Options        |     |   | Exercise Price |   |   | Options        |   |   | Exercise Price |   |   | Options |   |   | Exercise Price |   |
|                               |   |           |     |   |                |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Outstanding at beginning of year   |   |           | 439,079  |   |                | $      | 6.44   |           |   |   | 589,617 |   |   | $ | 5.96 |   |   |   | 713,624 |   |   | $ | 6.07 |   |
| Granted                            |   |           | 105,500  |   |                |   | 5.98   |           |   |   | 106,750 |   |   |   | 4.08 |   |   |   | 97,375 |   |   |   | 6.29 |   |
| Exercised                          |   |           | (15,000  | )      |                |   | 3.45   |           |   |   | (184,452 | ) |   |   | 3.38 |   |   |   | (137,682 | ) |   |   | 2.89 |   |
| Lapsed or canceled                 |   |           | (111,054 | )      |                |   | 8.14   |           |   |   | (72,836 | ) |   |   | 6.82 |   |   |   | (83,700 | ) |   |   | 12.35 |   |
|                               |   |           |     |   |                |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding at end of year         |   |           | 418,525  |   |                | $      | 5.98   |           |   |   | 439,079 |   |   | $ | 6.44 |   |   |   | 589,617 |   |   | $ | 5.96 |   |
|                               |   |           |     |   |                |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options exercisable at end of year |   |           | 218,825  |   |                | $      | 6.81   |           |   |   | 256,404 |   |   | $ | 7.43 |   |   |   | 426,892 |   |   | $ | 5.28 |   |

|          |   | Options Outstanding |    |   | Options Exercisable |   |
|---------------|--------|--------------------------|---------|--------|--------------------------|--------|
|          |   |                     |    |   | Weighted-                |   |   |   |   |   |   |   |   | Weighted- |   |   |   |   |
|          |   |                     |    |   | Average                  |   |   | Weighted |   |   |   |   |   | Average |   |   | Weighted |   |
| Range of |   |                     |    |   | Remaining                |   |   | Average |   |   |   |   |   | Remaining |   |   | Average |   |
| Exercise      |   | Number                   |    |   | Contractual              |   |   | Exercise |   |   | Number |   |   | Contractual |   |   | Exercise |   |
| Price         |   | Outstanding              |    |   | Life (in yrs)  |   |   | Price |   |   | Exercisable |   |   | Life (in yrs) |   |   | Price |   |
|          |   |                     |    |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $3.46-$6.94   |   |                     | 341,025 |   |                     |   | 1.62 |   |   | $ | 5.63 |   |   |   | 141,325 |   |   |   | 0.90 |   |   | $ | 6.42 |   |
| $6.95-$7.54   |   |                     | 77,500  |   |                     |   | 0.12 |   |   |   | 7.53 |   |   |   | 77,500 |   |   |   | 0.12 |   |   |   | 7.53 |   |
|          |   |                     | 418,525 |   |                     |   | 1.34 |   |   | $ | 5.98 |   |   |   | 218,825 |   |   |   | 0.63 |   |   | $ | 6.81 |   |

|                             |   | 2010            |    |   | 2009            |   |    | 2008            |   |
|----------------------------------|--------|-----------------|---------|--------|-----------------|--------|---------|-----------------|--------|
|                             |   |            |    |   |            |   |    |            |   |
| Expected life of options granted |   | 2.66 Years |    |   | 2.60 Years |   |    | 2.62 Years |   |
| Risk-free interest rate          |   |            | 1.38    | %      |            |   | 1.09    | %               |   |   | 3.04 | % |
| Expected volatility of stock     |   |            | 48      | %      |            |   | 47      | %               |   |   | 35 | % |
| Annual expected dividend yield   |   |            | 1       | %      |            |   | 1       | %               |   |   | 1 | % |
| Fair value of granted options    |   | $               | 218,982 |   |            | $      | 185,025 |            |   | $ | 174,028 |   |
| Nonvested options                |   |            | 199,700 |   |            |   | 182,675 |            |   |   | 162,725 |   |

----

----

|                      |   |                   |   |   |        |   |   |                   |   |   |                   |   |   | Minimum                |   |
|---------------------------|--------|------------------------|--------|--------|-------------|--------|--------|------------------------|--------|--------|------------------------|--------|--------|------------------------|--------|
|                      |   |                   |   |   |        |   |   |                   |   |   |                   |   |   | To Be Well   |   |
|                      |   |                   |   |   |        |   |   |                   |   |   |                   |   |   | Capitalized Under |   |
|                      |   |                   |   |   |        |   |   | Minimum Capital   |   |   | Prompt Corrective |   |
|                      |   | Actual                 |   |   | Requirement |   |   | Action Provisions |   |
|                      |   | Amount                 |   |   | Ratio       |   |   | Amount                 |   |   | Ratio                  |   |   | Amount                 |   |   | Ratio |   |
|                      |   | (Dollars In Thousands) |   |
| December 31, 2010         |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |
| Total Capital             |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |
| (to Risk-Weighted Assets) |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |
| Corporation               |   | $                      | 86,869 |   |        |   | 15.51  | %                      |   | $      | 44,809                 |   |   |                   | 8.00   | % |   | $ | 56,011 |   |   |   | 10.00 | % |
| Bank                      |   | $                      | 83,479 |   |        |   | 14.94  | %                      |   | $      | 44,700                 |   |   |                   | 8.00   | % |   | $ | 55,875 |   |   |   | 10.00 | % |
| Tier 1 Capital            |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Risk-Weighted Assets) |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 79,820 |   |        |   | 14.25  | %                      |   | $      | 22,404                 |   |   |                   | 4.00   | % |   | $ | 33,607 |   |   |   | 6.00 | % |
| Bank                      |   | $                      | 76,447 |   |        |   | 13.68  | %                      |   | $      | 22,350                 |   |   |                   | 4.00   | % |   | $ | 33,525 |   |   |   | 6.00 | % |
| Tier 1 Capital            |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Average Assets)       |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 79,820 |   |        |   | 9.56   | %                      |   | $      | 33,392                 |   |   |                   | 4.00   | % |   | $ | 41,741 |   |   |   | 5.00 | % |
| Bank                      |   | $                      | 76,447 |   |        |   | 9.17   | %                      |   | $      | 33,351                 |   |   |                   | 4.00   | % |   | $ | 41,689 |   |   |   | 5.00 | % |
| December 31, 2009         |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| Total Capital             |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Risk-Weighted Assets) |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 80,465 |   |        |   | 14.73  | %                      |   | $      | 43,703                 |   |   |                   | 8.00   | % |   | $ | 54,629 |   |   |   | 10.00 | % |
| Bank                      |   | $                      | 73,252 |   |        |   | 13.43  | %                      |   | $      | 43,644                 |   |   |                   | 8.00   | % |   | $ | 54,555 |   |   |   | 10.00 | % |
| Tier 1 Capital            |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Risk-Weighted Assets) |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 73,604 |   |        |   | 13.47  | %                      |   | $      | 21,852                 |   |   |                   | 4.00   | % |   | $ | 32,777 |   |   |   | 6.00 | % |
| Bank                      |   | $                      | 66,400 |   |        |   | 12.17  | %                      |   | $      | 21,822                 |   |   |                   | 4.00   | % |   | $ | 32,733 |   |   |   | 6.00 | % |
| Tier 1 Capital            |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Average Assets)       |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 73,604 |   |        |   | 10.73  | %                      |   | $      | 27,430                 |   |   |                   | 4.00   | % |   | $ | 34,288 |   |   |   | 5.00 | % |
| Bank                      |   | $                      | 66,400 |   |        |   | 9.69   | %                      |   | $      | 27,398                 |   |   |                   | 4.00   | % |   | $ | 34,247 |   |   |   | 5.00 | % |
| December 31, 2008         |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| Total Capital             |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Risk-Weighted Assets) |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 69,747 |   |        |   | 13.11  | %                      |   | $      | 42,576                 |   |   |                   | 8.00   | % |   | $ | 53,220 |   |   |   | 10.00 | % |
| Bank                      |   | $                      | 65,095 |   |        |   | 12.26  | %                      |   | $      | 42,489                 |   |   |                   | 8.00   | % |   | $ | 53,111 |   |   |   | 10.00 | % |
| Tier 1 Capital            |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Risk-Weighted Assets) |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 63,085 |   |        |   | 11.86  | %                      |   | $      | 21,277                 |   |   |                   | 4.00   | % |   | $ | 31,915 |   |   |   | 6.00 | % |
| Bank                      |   | $                      | 58,433 |   |        |   | 11.00  | %                      |   | $      | 21,245                 |   |   |                   | 4.00   | % |   | $ | 31,867 |   |   |   | 6.00 | % |
| Tier 1 Capital            |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| (to Average Assets)       |   |                   |   |   |        |   |   |                   |   |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| Corporation               |   | $                      | 63,085 |   |        |   | 9.71   | %                      |   | $      | 25,993                 |   |   |                   | 4.00   | % |   | $ | 32,491 |   |   |   | 5.00 | % |
| Bank                      |   | $                      | 58,433 |   |        |   | 9.00   | %                      |   | $      | 25,961                 |   |   |                   | 4.00   | % |   | $ | 32,452 |   |   |   | 5.00 | % |

----

|                      |   | Year Ended December 31, |   |
|--------------------------------|--------|----------------------------------------|--------|
|                           |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                           |   | Net                                    |   |   |   |   |   | Per Share |   |   | Net |   |   |   |   |   | Per Share |   |   | Net |   |   |   |   |   | Per Share |   |
|                           |   | Income                                 |   |   | Shares |   |   | Amount |   |   | Income |   |   | Shares |   |   | Amount |   |   | Income |   |   | Shares |   |   | Amount |   |
|                           |   | (In Thousands, Except for Share Data)  |   |
| Earnings per share             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                          |   | $                                      | 7,576  |   |   |   | 10,503 |   |   | $ | 0.72 |   |   | $ | 9,635 |   |   |   | 10,391 |   |   | $ | 0.93 |   |   | $ | 4,744 |   |   |   | 10,299 |   |   | $ | 0.46 |   |
| Effect of dilutive securities: |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options and warrants     |   |                                   | -      |   |   |   | 22 |   |   |   | - |   |   |   | - |   |   |   | 42 |   |   |   | - |   |   |   | - |   |   |   | 125 |   |   |   | - |   |
| Diluted                        |   |                                   | -      |   |   |   | - |   |   |   | 0.72 |   |   |   | - |   |   |   | - |   |   |   | 0.92 |   |   |   | - |   |   |   | - |   |   |   | 0.46 |   |
| Diluted earnings per share     |   | $                                      | 7,576  |   |   |   | 10,525 |   |   | $ | 0.72 |   |   | $ | 9,635 |   |   |   | 10,433 |   |   | $ | 0.92 |   |   | $ | 4,744 |   |   |   | 10,424 |   |   | $ | 0.46 |   |

----

|                                        |   | Year Ended December 31, |   |
|---------------------------------------------|--------|----------------------------------------|--------|
|                                        |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                                        |   | (In Thousands)                         |   |
|                                        |   |                                   |   |   |   |   |   |   |   |
| Provision for losses on mortgage loans sold |   | $                                      | 3,836  |   |   | $ | 5,050 |   |   | $ | 2,095 |   |
| Management fees                             |   |                                   | 3,239  |   |   |   | 7,152 |   |   |   | 2,380 |   |
| Advertising and promotional expense         |   |                                   | 2,762  |   |   |   | 5,552 |   |   |   | 3,760 |   |
| OREO expenses                               |   |                                   | 2,335  |   |   |   | 1,497 |   |   |   | 22 |   |
| Investor fees                               |   |                                   | 833    |   |   |   | 1,567 |   |   |   | 889 |   |
| FDIC insurance                              |   |                                   | 678    |   |   |   | 1,203 |   |   |   | 350 |   |
| Accounting and auditing service             |   |                                   | 588    |   |   |   | 563 |   |   |   | 623 |   |
| Loan and collection                         |   |                                   | 572    |   |   |   | 443 |   |   |   | 172 |   |
| Data processing                             |   |                                   | 502    |   |   |   | 497 |   |   |   | 472 |   |
| Business and franchise tax                  |   |                                   | 453    |   |   |   | 447 |   |   |   | 406 |   |
| Consulting fees                             |   |                                   | 436    |   |   |   | 346 |   |   |   | 334 |   |
| CDARS fee expense                           |   |                                   | 366    |   |   |   | 80 |   |   |   | 42 |   |
| Credit reports                              |   |                                   | 356    |   |   |   | 516 |   |   |   | 238 |   |
| Postage                                     |   |                                   | 223    |   |   |   | 147 |   |   |   | 157 |   |
| Telephone                                   |   |                                   | 223    |   |   |   | 276 |   |   |   | 282 |   |
| Director fees                               |   |                                   | 192    |   |   |   | 267 |   |   |   | 192 |   |
| Office supplies-stationary print            |   |                                   | 173    |   |   |   | 204 |   |   |   | 175 |   |
| Regulatory examinations                     |   |                                   | 172    |   |   |   | 166 |   |   |   | 155 |   |
| Other operating expenses                    |   |                                   | 155    |   |   |   | 142 |   |   |   | 139 |   |
| Legal fees                                  |   |                                   | 153    |   |   |   | 63 |   |   |   | 403 |   |
| Other settlement fees                       |   |                                   | 128    |   |   |   | 163 |   |   |   | 146 |   |
| Other                                       |   |                                   | 1,743  |   |   |   | 2,011 |   |   |   | 2,306 |   |
|                                        |   | $                                      | 20,118 |   |   | $ | 28,352 |   |   | $ | 15,738 |   |

----

----

|                                |   | Fair Value Measurement               |    |
|------------------------------------------|--------|------------------------------------------------|---------|
|                                     |   | at December 31, 2010 Using |    |
|                                     |   | (In Thousands)                            |    |
| Description                              |   | CarryingValue                                  |    |   | Quoted Prices inActive Marketsfor IdenticalAssets (Level 1) |   |   | Other ObservableInputs (Level 2) |   |   | SignificantUnobservableInputs (Level 3) |   |
| Financial Assets-Recurring               |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Available for sale investment securities |   | $                                              | 124,307 |   |   | $ | - |   |   | $ | 124,307 |   |   | $ | - |   |
| Residential loans held for sale          |   |                                           | 82,244  |   |   |   | - |   |   |   | 82,244 |   |   |   | - |   |
| Derivative assets                        |   |                                           | 318     |   |   |   | - |   |   |   | - |   |   |   | 318 |   |
| Total Financial Assets-Recurring         |   | $                                              | 206,869 |   |   | $ | - |   |   | $ | 206,551 |   |   | $ | 318 |   |
|                                     |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial Liabilities-Recurring          |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities                   |   | $                                              | 38      |   |   | $ | - |   |   | $ | - |   |   | $ | 38 |   |
| Total Financial Liabilities-Recurring    |   | $                                              | 38      |   |   | $ | - |   |   | $ | - |   |   | $ | 38 |   |
|                                     |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial Assets-Non-Recurring           |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired loans (1)                       |   | $                                              | 8,561   |   |   | $ | - |   |   | $ | - |   |   | $ | 8,561 |   |
| Other real estate owned (2)              |   |                                           | 1,859   |   |   |   | - |   |   |   | 1,859 |   |   |   | - |   |
| Total Financial Assets-Non-Recurring     |   | $                                              | 10,420  |   |   | $ | - |   |   | $ | 1,859 |   |   | $ | 8,561 |   |

|                                                                                                                                                                                                                         |   | Fair Value Measurement               |    |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|---------|
|                                                                                                                                                                                                                              |   | at December 31, 2009 Using |    |
|                                                                                                                                                                                                                              |   | (In Thousands)                            |    |
| Description                                                                                                                                                                                                                       |   | CarryingValue                                  |    |   | Quoted Prices in Active Marketsfor IdenticalAssets (Level 1) |   |   | Other Observable Inputs (Level 2) |   |   | SignificantUnobservableInputs (Level 3) |   |
| Financial Assets-Recurring                                                                                                                                                                                                        |   |                                           |    |   |   |   |   |   |   |   |   |   |
| Available for sale investment securities                                                                                                                                                                                          |   | $                                              | 43,095  |   |   | $ | 43,095 |   |   | $ | - |   |   | $ | - |   |
| Residential loans held for sale                                                                                                                                                                                                   |   |                                           | 76,232  |   |   |   | - |   |   |   | 76,232 |   |   |   | - |   |
| Derivative assets                                                                                                                                                                                                                 |   |                                           | 492     |   |   |   | - |   |   |   | - |   |   |   | 492 |   |
| Total Financial Assets-Recurring                                                                                                                                                                                                  |   | $                                              | 119,819 |   |   | $ | 43,095 |   |   | $ | 76,232 |   |   | $ | 492 |   |
|                                                                                                                                                                                                                              |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial Liabilities-Recurring                                                                                                                                                                                                   |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative liabilities                                                                                                                                                                                                            |   | $                                              | 353     |   |   | $ | - |   |   | $ | - |   |   | $ | 353 |   |
| Total Financial Liabilities-Recurring                                                                                                                                                                                             |   | $                                              | 353     |   |   | $ | - |   |   | $ | - |   |   | $ | 353 |   |
|                                                                                                                                                                                                                              |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial Assets-Non-Recurring                                                                                                                                                                                                    |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired loans (1)                                                                                                                                                                                                                |   | $                                              | 7,032   |   |   | $ | - |   |   | $ | - |   |   | $ | 7,032 |   |
| Other real estate owned (2)                                                                                                                                                                                                       |   |                                           | 5,111   |   |   |   | - |   |   |   | 5,111 |   |   |   | - |   |
| Total Financial Assets-Non-Recurring                                                                                                                                                                                              |   | $                                              | 12,143  |   |   | $ | - |   |   | $ | 5,111 |   |   | $ | 7,032 |   |
| (1)  Represents the carrying value of loans for which adjustments are based on the appraised value of the collateral.(2)  Represents appraised value and realtor comparables less estimated selling expenses. |   |

----

|                                                             |   | Net Derivatives |   |
|------------------------------------------------------------------|--------|----------------------|--------|
|                                                             |   | (In Thousands)  |   |
| Balance September 30, 2010                                       |   | $                    | 845    |   |
| Realized and unrealized gains (losses) included in earnings      |   |                 | (565   | ) |
| Unrealized gains (losses) included in other comprehensive income |   |                 | -      |   |
| Purchases, settlements, paydowns, and maturities                 |   |                 | -      |   |
| Transfer into Level 3                                            |   |                 | -      |   |
| Balance December 31, 2010                                        |   | $                    | 280    |   |

|                                                             |   | Net Derivatives |   |
|------------------------------------------------------------------|--------|-----------------|--------|
|                                                             |   | (In Thousands)  |   |
| Balance January 1, 2010                                          |   | $               | 166    |   |
| Realized and unrealized gains included in earnings               |   |            | 114    |   |
| Unrealized gains (losses) included in other comprehensive income |   |            | -      |   |
| Purchases, settlements, paydowns, and maturities                 |   |            | -      |   |
| Transfer into Level 3                                            |   |            | -      |   |
| Balance December 31, 2010                                        |   | $               | 280    |   |
|                                                             |   |            |   |   |
|                                                             |   | Net Derivatives |   |
|                                                             |   | (In Thousands)  |   |
| Balance January 1, 2009                                          |   | $               | 91     |   |
| Realized and unrealized gains included in earnings               |   |            | 75     |   |
| Unrealized gains (losses) included in other comprehensive income |   |            | -      |   |
| Purchases, settlements, paydowns, and maturities                 |   |            | -      |   |
| Transfer into Level 3                                            |   |            | -      |   |
| Balance December 31, 2009                                        |   | $               | 166    |   |

----

|                                     |   | December 31, 2010 |   |
|------------------------------------------|--------|-----------------------------|--------|
| (In Thousands)                      |   | AggregateFair Value    |   |   | Difference |   |   | Contractual Principal |   |
| Residential mortgage loans held for sale |   | $                           | 82,244 |   |   | $ | 1,266 |   |   | $ | 80,978 |   |

|                                     |   | December 31, 2009 |   |
|------------------------------------------|--------|-----------------------------|--------|
| (In Thousands)                      |   | AggregateFair Value    |   |   | Difference |   |   | ContractualPrincipal |   |
| Residential mortgage loans held for sale |   | $                           | 76,232 |   |   | $ | 1,626 |   |   | $ | 74,606 |   |

----

|                          |   | December 31,   |    |
|-------------------------------|--------|----------------|---------|
|                          |   | 2010           |    |   | 2009 |   |
|                          |   | Carrying       |    |   | Fair |   |   | Carrying |   |   | Fair |   |
|                          |   | Amount         |    |   | Value |   |   | Amount |   |   | Value |   |
|                          |   | (In Thousands) |    |
| Financial assets:             |   |           |    |
| Cash and short-term           |   |           |    |   |   |   |   |   |   |   |   |   |
| investments                   |   | $              | 111,907 |   |   | $ | 111,907 |   |   | $ | 31,221 |   |   | $ | 31,221 |   |
| Securities available for sale |   |           | 124,307 |   |   |   | 124,307 |   |   |   | 43,095 |   |   |   | 43,095 |   |
| Restricted stock              |   |           | 4,438   |   |   |   | 4,438 |   |   |   | 4,743 |   |   |   | 4,743 |   |
| Loans, net of allowance       |   |           | 563,246 |   |   |   | 575,413 |   |   |   | 553,669 |   |   |   | 552,097 |   |
| Derivatives                   |   |           | 318     |   |   |   | 318 |   |   |   | 492 |   |   |   | 492 |   |
| Total financial assets        |   | $              | 804,216 |   |   | $ | 816,383 |   |   | $ | 633,220 |   |   | $ | 631,648 |   |
|                          |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:        |   |           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                      |   | $              | 627,848 |   |   | $ | 626,606 |   |   | $ | 466,645 |   |   | $ | 466,668 |   |
| Short-term borrowings         |   |           | 80,348  |   |   |   | 81,513 |   |   |   | 64,249 |   |   |   | 64,258 |   |
| Long-term borrowings          |   |           | 37,034  |   |   |   | 37,155 |   |   |   | 46,330 |   |   |   | 46,351 |   |
| Subordinated debentures       |   |           | 6,186   |   |   |   | 6,242 |   |   |   | 6,186 |   |   |   | 6,248 |   |
| Derivatives                   |   |           | 38      |   |   |   | 38 |   |   |   | 353 |   |   |   | 353 |   |
| Total financial liabilities   |   | $              | 751,454 |   |   | $ | 751,554 |   |   | $ | 583,763 |   |   | $ | 583,878 |   |

----

----

| 2010                                                                     |   | Commercial     |    |   | Mortgage |   |   |   |   |   |         |   |   | Consolidated |    |
|--------------------------------------------------------------------------|--------|----------------|---------|--------|----------|--------|--------|--------|--------|--------|--------------|--------|--------|--------------|---------|
|                                                                     |   | Banking        |    |   | Banking  |   |   | Other  |   |   | Eliminations |   |   | Totals       |    |
|                                                                     |   | (In Thousands) |    |
| Revenues:                                                                |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |
|    Interest income                                        |   | $              | 33,919  |   |     | $      | 2,982  |   |   | $      | 28           |   |   | $            | (1,786  | ) |   | $ | 35,143 |   |
|    Gain on sale of loans                                  |   |           | 408     |   |     |   | 32,093 |   |   |   | -            |   |   |         | -       |   |   |   | 32,501 |   |
|    Other                                                  |   |           | 3,614   |   |     |   | (925   | )      |   |   | 1,153        |   |   |         | (1,683  | ) |   |   | 2,159 |   |
| Total operating income                                                   |   |           | 37,941  |   |     |   | 34,150 |   |   |   | 1,181        |   |   |         | (3,469  | ) |   |   | 69,803 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Expenses:                                                                |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
|    Interest expense                                       |   |           | 9,671   |   |     |   | 1,582  |   |   |   | 648          |   |   |         | (1,787  | ) |   |   | 10,114 |   |
|    Salaries and employee benefits                         |   |           | 8,298   |   |     |   | 13,461 |   |   |   | 288          |   |   |         | -       |   |   |   | 22,047 |   |
|    Other                                                  |   |           | 11,212  |   |     |   | 14,124 |   |   |   | 1,886        |   |   |         | (1,682  | ) |   |   | 25,540 |   |
| Total operating expenses                                                 |   |           | 29,181  |   |     |   | 29,167 |   |   |   | 2,822        |   |   |         | (3,469  | ) |   |   | 57,701 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Income before income taxes                                               |   | $              | 8,760   |   |     | $      | 4,983  |   |   | $      | (1,641       | )      |   | $            | -       |   |   | $ | 12,102 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
|           Total assets |   | $              | 788,902 |   |     | $      | 87,822 |   |   | $      | 9,725        |   |   | $            | (54,625 | ) |   | $ | 831,824 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Capital expenditures                                                     |   | $              | 191     |   |     | $      | 326    |   |   | $      | 85           |   |   | $            | -       |   |   | $ | 602 |   |

| 2009                                                                     |   | Commercial     |    |   | Mortgage |   |   |   |   |   |         |   |   | Consolidated |    |
|--------------------------------------------------------------------------|--------|----------------|---------|--------|----------|--------|--------|--------|--------|--------|--------------|--------|--------|--------------|---------|
|                                                                     |   | Banking        |    |   | Banking  |   |   | Other  |   |   | Eliminations |   |   | Totals       |    |
|                                                                     |   | (In Thousands) |    |
| Revenues:                                                                |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |
|    Interest income                                        |   | $              | 35,886  |   |     | $      | 3,361  |   |   | $      | 44           |   |   | $            | (1,765  | ) |   | $ | 37,526 |   |
|    Gain on sale of loans                                  |   |           | 659     |   |     |   | 48,603 |   |   |   | -            |   |   |         | -       |   |   |   | 49,262 |   |
|    Other                                                  |   |           | 3,031   |   |     |   | 5,150  |   |   |   | 1,180        |   |   |         | (1,657  | ) |   |   | 7,704 |   |
| Total operating income                                                   |   |           | 39,576  |   |     |   | 57,114 |   |   |   | 1,224        |   |   |         | (3,422  | ) |   |   | 94,492 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Expenses:                                                                |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
|    Interest expense                                       |   |           | 13,565  |   |     |   | 1,488  |   |   |   | 682          |   |   |         | (1,767  | ) |   |   | 13,968 |   |
|    Salaries and employee benefits                         |   |           | 8,040   |   |     |   | 20,082 |   |   |   | -            |   |   |         | -       |   |   |   | 28,122 |   |
|    Other                                                  |   |           | 13,746  |   |     |   | 22,965 |   |   |   | 1,857        |   |   |         | (1,655  | ) |   |   | 36,913 |   |
| Total operating expenses                                                 |   |           | 35,351  |   |     |   | 44,535 |   |   |   | 2,539        |   |   |         | (3,422  | ) |   |   | 79,003 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Income before income taxes                                               |   | $              | 4,225   |   |     | $      | 12,579 |   |   | $      | (1,315       | )      |   | $            | -       |   |   | $ | 15,489 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
|           Total assets |   | $              | 627,766 |   |     | $      | 79,557 |   |   | $      | 9,138        |   |   | $            | (49,582 | ) |   | $ | 666,879 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Capital expenditures                                                     |   | $              | 10      |   |     | $      | 32     |   |   | $      | 16           |   |   | $            | -       |   |   | $ | 58 |   |

| 2008                                                                     |   | Commercial     |    |   | Mortgage |   |   |   |   |   |         |   |   | Consolidated |    |
|--------------------------------------------------------------------------|--------|----------------|---------|--------|----------|--------|--------|--------|--------|--------|--------------|--------|--------|--------------|---------|
|                                                                     |   | Banking        |    |   | Banking  |   |   | Other  |   |   | Eliminations |   |   | Totals       |    |
|                                                                     |   | (In Thousands) |    |
| Revenues:                                                                |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |
|    Interest income                                        |   | $              | 37,910  |   |     | $      | 1,778  |   |   | $      | 71           |   |   | $            | (967    | ) |   | $ | 38,792 |   |
|    Gain on sale of loans                                  |   |           | -       |   |     |   | 24,863 |   |   |   | -            |   |   |         | (4      | ) |   |   | 24,859 |   |
|    Other                                                  |   |           | 1,961   |   |     |   | 4,472  |   |   |   | 1,148        |   |   |         | (1,627  | ) |   |   | 5,954 |   |
| Total operating income                                                   |   |           | 39,871  |   |     |   | 31,113 |   |   |   | 1,219        |   |   |         | (2,598  | ) |   |   | 69,605 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Expenses:                                                                |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
|    Interest expense                                       |   |           | 16,972  |   |     |   | 865    |   |   |   | 873          |   |   |         | (970    | ) |   |   | 17,740 |   |
|    Salaries and employee benefits                         |   |           | 7,520   |   |     |   | 13,261 |   |   |   | -            |   |   |         | -       |   |   |   | 20,781 |   |
|    Other                                                  |   |           | 10,836  |   |     |   | 12,692 |   |   |   | 1,740        |   |   |         | (1,628  | ) |   |   | 23,640 |   |
| Total operating expenses                                                 |   |           | 35,328  |   |     |   | 26,818 |   |   |   | 2,613        |   |   |         | (2,598  | ) |   |   | 62,161 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Income before income taxes                                               |   | $              | 4,543   |   |     | $      | 4,295  |   |   | $      | (1,394       | )      |   | $            | -       |   |   | $ | 7,444 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
|           Total assets |   | $              | 662,885 |   |     | $      | 85,909 |   |   | $      | 9,476        |   |   | $            | (55,946 | ) |   | $ | 702,324 |   |
|                                                                     |   |           |    |   |     |   |   |   |   |   |         |   |   |         |    |   |   |   |   |   |
| Capital expenditures                                                     |   | $              | 98      |   |     | $      | 72     |   |   | $      | 29           |   |   | $            | -       |   |   | $ | 199 |   |

----

|                                       |   | December 31,   |   |
|--------------------------------------------|--------|---------------------|--------|
|                                       |   | 2010                |   |   | 2009 |   |
|                                       |   | (In Thousands) |   |
| Assets                                     |   |                |   |   |   |   |
| Cash                                       |   | $                   | 10     |   |   | $ | 189 |   |
| Other investments                          |   |                | 2,374  |   |   |   | 6,540 |   |
| Investment in subsidiaries                 |   |                | 75,006 |   |   |   | 66,760 |   |
| Other assets                               |   |                | 1,624  |   |   |   | 757 |   |
| Total assets                               |   | $                   | 79,014 |   |   | $ | 74,246 |   |
|                                       |   |                |   |   |   |   |   |   |
| Liabilities                                |   |                |   |   |   |   |   |   |
| Subordinated debentures                    |   | $                   | 6,186  |   |   | $ | 6,186 |   |
| Other liabilities                          |   |                | 635    |   |   |   | 282 |   |
| Total liabilities                          |   |                | 6,821  |   |   |   | 6,468 |   |
|                                       |   |                |   |   |   |   |   |   |
| Shareholders' Equity                       |   |                |   |   |   |   |   |   |
| Common stock                               |   |                | 8,664  |   |   |   | 8,799 |   |
| Capital surplus                            |   |                | 17,794 |   |   |   | 18,552 |   |
| Retained earnings                          |   |                | 47,530 |   |   |   | 40,377 |   |
| Accumulated other comprehensive income     |   |                | (1,795 | ) |   |   | 50 |   |
| Total shareholders' equity                 |   |                | 72,193 |   |   |   | 67,778 |   |
| Total liabilities and shareholders' equity |   | $                   | 79,014 |   |   | $ | 74,246 |   |

----

|                                                                |   | Year Ended December 31, |   |
|---------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                                |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                                                                |   | (In Thousands)                    |   |
|  Income                                                        |   |                                   |   |   |   |   |   |   |   |
| Dividends from subsidiaries                                         |   | $                                      | 1,800  |   |   | $ | 2,467 |   |   | $ | 3,203 |   |
| Interest                                                            |   |                                   | 28     |   |   |   | 44 |   |   |   | 72 |   |
| Other                                                               |   |                                   | -      |   |   |   | 24 |   |   |   | 81 |   |
|                                                                |   |                                   | 1,828  |   |   |   | 2,535 |   |   |   | 3,356 |   |
| Expenses                                                            |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Interest expense on subordinated debentures                         |   |                                   | 216    |   |   |   | 238 |   |   |   | 418 |   |
| Other expenses                                                      |   |                                   | 1,163  |   |   |   | 1,185 |   |   |   | 1,122 |   |
| Total expenses                                                      |   |                                   | 1,379  |   |   |   | 1,423 |   |   |   | 1,540 |   |
| Income before income taxes and undistributed income of subsidiaries |   |                                   | 449    |   |   |   | 1,112 |   |   |   | 1,816 |   |
| Income tax (benefit)                                                |   |                                   | (536   | ) |   |   | (466 | ) |   |   | (526 | ) |
|                                                                |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Income before undistributed income of subsidiaries                  |   |                                   | 985    |   |   |   | 1,578 |   |   |   | 2,342 |   |
| Undistributed income of subsidiaries                                |   |                                   | 6,591  |   |   |   | 8,057 |   |   |   | 2,402 |   |
| Net income                                                          |   | $                                      | 7,576  |   |   | $ | 9,635 |   |   | $ | 4,744 |   |

----

|                                                        |   | Year Ended December 31, |   |
|-------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                        |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                                                        |   | (In Thousands)                    |   |
| Cash Flows from Operating Activities                        |   |                                   |   |   |   |   |   |   |   |
| Net income                                                  |   | $                                      | 7,576  |   |   | $ | 9,635 |   |   | $ | 4,744 |   |
| Adjustments to reconcile net income to net cash provided by |   |                                   |   |   |   |   |   |   |   |   |   |   |
| (used in) operating activities:                             |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Undistributed income of subsidiaries                        |   |                                   | (6,591 | ) |   |   | (8,057 | ) |   |   | (2,402 | ) |
| (Increase) decrease in other assets                         |   |                                   | (868   | ) |   |   | 172 |   |   |   | (79 | ) |
| Increase (decrease) in other liabilities                    |   |                                   | 353    |   |   |   | (33 | ) |   |   | (150 | ) |
| Stock-based compensation                                    |   |                                   | 175    |   |   |   | 162 |   |   |   | 136 |   |
| Net cash provided by operating activities                   |   |                                   | 645    |   |   |   | 1,879 |   |   |   | 2,249 |   |
|                                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Increase in investment in subsidiaries                      |   |                                   | (3,500 | ) |   |   | - |   |   |   | (8,212 | ) |
| Decrease (increase) in other investments                    |   |                                   | 4,165  |   |   |   | (2,512 | ) |   |   | 11,464 |   |
| Net cash provided by (used in) investing activities         |   |                                   | 665    |   |   |   | (2,512 | ) |   |   | 3,252 |   |
|                                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Repurchase of common stock                                  |   |                                   | (1,535 | ) |   |   | (173 | ) |   |   | (5,930 | ) |
| Net proceeds from issuance of common stock                  |   |                                   | 469    |   |   |   | 1,400 |   |   |   | 870 |   |
| Dividends paid                                              |   |                                   | (423   | ) |   |   | (415 | ) |   |   | (433 | ) |
| Net cash (used in) provided by financing activities         |   |                                   | (1,489 | ) |   |   | 812 |   |   |   | (5,493 | ) |
|                                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| (Decrease) increase in cash and cash equivalents            |   |                                   | (179   | ) |   |   | 179 |   |   |   | 8 |   |
|                                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents                                   |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Beginning                                                   |   |                                   | 189    |   |   |   | 10 |   |   |   | 2 |   |
|                                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |
| Ending                                                      |   | $                                      | 10     |   |   | $ | 189 |   |   | $ | 10 |   |

----

----

----

| Exhibit No. |   | Description                                                                                                                                                                                                                                                                                                                                                                                          |
|------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1              |   | Amended and Restated Articles of Incorporation of Access National Corporation (incorporated by reference to Exhibit 3.1 to Form 8-K filed July 18, 2006)                                                                                                                                                                                                                                             |
| 3.2              |   | Amended and Restated Bylaws of Access National Corporation (incorporated by reference to Exhibit 3.2 to Form 8-K Filed October 24, 2007)                                                                                                                                                                                                                                                        |
| 4                |   | Form of Common Stock Certificate (incorporated by reference to Exhibit 4.0 to Form 10-KSB filed March 31, 2003)                                                                                                                                                                                                                                                                                 |
|             |   | Certain instruments relating to long-term debt as to which the total amount of securities authorized thereunder does not exceed 10% of Access National Corporation’s total assets have been omitted in accordance with Item 601(b)(4)(iii) of Regulation S-K.  The registrant will furnish a copy of any such instrument to the Securities and Exchange Commission upon its request. |
| 10.1+            |   | Employment Letter Agreement between Access National Bank and Michael W. Clarke (incorporated by reference to Exhibit 10.1 to Form 10-K filed March 31, 2005)                                                                                                                                                                                                                                    |
| 10.2+            |   | Employment Letter Agreement between Access National Bank and Robert C. Shoemaker (incorporated by reference to Exhibit 10.2 to Form 10-K filed March 31, 2005)                                                                                                                                                                                                                                  |
| 10.3+            |   | Employment Agreement between Access National Bank and Charles Wimer (incorporated by reference to Exhibit 10.3 to Form 10-KSB filed March 31, 2003)                                                                                                                                                                                                                                             |
| 10.4+            |   | Employment Agreement between Access National Mortgage Corporation and Dean Hackemer (incorporated by reference to Exhibit 10.4 to Form 10-K filed March 31, 2005)                                                                                                                                                                                                                               |
| 10.4.1+          |   | Amendment #1 to Employment Agreement between Access National Mortgage Corporation and Dean Hackemer (incorporated by reference to Exhibit 10.2 to Form 10-Q filed May 15, 2007)                                                                                                                                                                                                                 |
| 10.5*+           |   | Annual Compensation of Non-Employee Directors                                                                                                                                                                                                                                                                                                                                                        |
| 10.6*+           |   | Base Salaries for Named Executive Officers                                                                                                                                                                                                                                                                                                                                                           |
| 10.7+            |   | Access National Bank 1999 Stock Option Plan (incorporated by reference to Exhibit 10.5 to Form 10-KSB filed March 31, 2003)                                                                                                                                                                                                                                                                     |
| 10.7.1+          |   | Form of Incentive Stock Option Agreement for Employee under 1999 Stock Option Plan (incorporated by reference to Exhibit 10.5.1 to Form 8-K filed January 31, 2007)                                                                                                                                                                                                                                  |
| 10.7.2+          |   | Form of Incentive Stock Option for Employee-Director under 1999 Stock Option Plan (incorporated by reference to Exhibit 10.5.2 to Form 8-K filed January 31, 2007)                                                                                                                                                                                                                                   |
| 10.7.3+          |   | Form of Non-Qualified Stock Option Agreement for Director under 1999 Stock Option Plan (incorporated by reference to Exhibit 10.5.3 to Form 8-K filed January 31, 2007)                                                                                                                                                                                                                              |
| 10.8             |   | Lease agreement between Access National Bank and William and Blanca Spencer (incorporated by reference to Exhibit 10.6 to Form 10-KSB filed March 31, 2003)                                                                                                                                                                                                                                     |
| 10.9             |   | Lease agreement between Access National Mortgage Corporation and WJG, LLC (incorporated by reference to Exhibit 10.7 to Form 10-KSB filed March 31, 2003)                                                                                                                                                                                                                                       |

----

| 10.10   |   | Access National Corporation 2009 Stock Option Plan, effective May 19, 2009 (incorporated by reference to Appendix A to the definitive proxy statement filed April 15, 2009) |
|---------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.10.1 |   | Form of Stock Option Agreement for Employee under 2009 Stock Option Plan (incorporated by reference to Exhibit 10.10.1 to Form 8-K filed July 6, 2009)                 |
| 14      |   | Code of Ethics (incorporated by reference to Exhibit 14 to Form 10-KSB filed March 30, 2004)                                                                           |
| 21*     |   | Subsidiaries of Access National Corporation                                                                                                                                 |
| 23*     |   | Consent of BDO Seidman, LLP                                                                                                                                                 |
| 24*     |   | Power of Attorney (included on the signature page of this report)                                                                                                           |
| 31.1*   |   | CEO Certification Pursuant to Rule 13a-14(a)                                                                                                                                |
| 31.2*   |   | CFO Certification Pursuant to Rule 13a-14(a)                                                                                                                                |
| 32*     |   | CEO/CFO Certification Pursuant to § 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350)                                                                      |

----

|                 | Access National Corporation                   |
|----------------------|-----------------------------------------------|
|                 | (Registrant)                                  |
|                 |                                          |
| Date: March 29, 2011 | By:        | /s/ Michael W. Clarke |   |
|                 |                                          | Michael W. Clarke |
|                 |                                          | President and Chief Executive Officer |
|                 |                                          |   |
| Date: March 29, 2011 | By:                                           | /s/ Charles Wimer |   |
|                 |                                          | Charles Wimer |
|                 |                                          | Executive Vice President and Chief Financial Officer |

----

| Signature                      |   | Title                                                                                                                                                                          |   | Date           |
|--------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|
|                           |   |                                                                                                                                                                           |   |           |
| /s/ Michael W. Clarke          |   |                                                                                                                                                                           |   |           |
| Michael W. Clarke              |   | President, Chief Executive Officer & Director(Principal Executive Officer)                                                                                            |   | March 29, 2011 |
| /s/ John W. Edgemond IV        |   |                                                                                                                                                                           |   | March 29, 2011 |
| John W. Edgemond IV            |   | Director                                                                                                                                                                       |   |           |
|                           |   |                                                                                                                                                                           |   |           |
| /s/ Martin S. Friedman         |   |                                                                                                                                                                           |   |           |
| Martin S. Friedman             |   | Director                                                                                                                                                                       |   | March 29, 2011 |
|                           |   |                                                                                                                                                                           |   |           |
| /s/  James L. Jadlos |   |                                                                                                                                                                           |   |           |
| James L. Jadlos                |   | Chairman & Director                                                                                                                                                        |   | March 29, 2011 |
|                           |   |                                                                                                                                                                           |   |           |
| /s/ Thomas M. Kody             |   |                                                                                                                                                                           |   |           |
| Thomas M. Kody                 |   | Director                                                                                                                                                                       |   | March 29, 2011 |
|                           |   |                                                                                                                                                                           |   |           |
| /s/ Robert C. Shoemaker        |   |                                                                                                                                                                           |   |           |
| Robert C. Shoemaker            |   | Director                                                                                                                                                                       |   | March 29, 2011 |
|                           |   |                                                                                                                                                                           |   |           |
| /s/ Charles Wimer              |   |                                                                                                                                                                           |   |           |
| Charles Wimer                  |   | Executive Vice President and Chief Financial Officer(Principal Financial Officer and Principal Accounting Officer) |   | March 29, 2011 |

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