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| Virginia                                            |         | 82-0545425                  |
|-----------------------------------------------------|--------------|-----------------------------|
| (State or other jurisdiction of |         | (I.R.S. Employer       |
| incorporation or organization)            |    | Identification Number) |

| Securities      registered pursuant to Section 12(b) of the Act: |   |                                           |
|------------------------------------------------------------------|--------|------------------------------------------------|
| Title      of each class                                         |   | Name      of each exchange on which registered |
| Common Stock $0.835 par    value                                 |   | The      NASDAQ Stock MarketLLC                |

| Securities      registered pursuant to Section 12(g) of the Act: |   |   |
|------------------------------------------------------------------|--------|--------|
| (Title      of class)  None                            |   |   |

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

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|     |         | Page   |
|----------|--------------|--------|
|     |         |   |   |   |
| PART I   |         |   |   |
|     |         |   |   |   |
|     | Item      1  |   | Business | 2 |
|     | Item      1A |   | Risk      Factors | 11 |
|     | Item      1B |   | Unresolved      Staff Comments | 16 |
|     | Item      2  |   | Properties | 16 |
|     | Item      3  |   | Legal      Proceedings | 16 |
|     | Item      4  |   | (Removed      and Reserved) | 16 |
|     |         |   |   |   |
| PART II  |         |   |   |
|     |         |   |   |   |
|     | Item      5  |   | Market      for Registrant’s Common Equity, Related Stockholder Matters and      Issuer Purchases of Equity Securities | 16 |
|     | Item      6  |   | Selected      Financial Data | 19 |
|     | Item      7  |   | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations | 20 |
|     | Item      7A |   | Quantitative      and Qualitative Disclosures About Market Risk | 34 |
|     | Item      8  |   | Financial      Statements and Supplementary Data | 36 |
|     | Item      9  |   | Changes      in and Disagreements With Accountants on Accounting and Financial      Disclosure | 75 |
|     | Item      9A |   | Controls      and Procedures | 75 |
|     | Item      9B |   | Other      Information | 75 |
|     |         |   |   |   |
| PART III |         |   |   |
|     |         |   |   |   |
|     | Item      10 |   | Directors,      Executive Officers and Corporate Governance | 75 |
|     | Item      11 |   | Executive      Compensation | 76 |
|     | Item      12 |   | Security      Ownership of Certain Beneficial Owners and Management and Related      Stockholder Matters | 76 |
|     | Item      13 |   | Certain      Relationships and Related Transactions, and Director      Independence | 76 |
|     | Item      14 |   | Principal      Accountant Fees and Services | 76 |
|     |         |   |   |   |
| PART IV  |         |   |   |
|     |         |   |   |   |
|     | Item      15 |   | Exhibits,      Financial Statement Schedules | 77 |
|     |         |   |
|     | Signatures   | 79     |

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

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

|   | Ÿ | 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; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | our      ability to finance an acquisition and possible ownership or economic      dilution to our currentshareholders; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | 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; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Ÿ | entry      into new markets where we lackexperience; |
|--------|--------|------------------------------------------------------|

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

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

|   | Ÿ | the      potential loss of key employees andclients. |
|--------|--------|------------------------------------------------------|

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|                |   | 2009   |   |   |   |   |   | 2008      |   |   |   |   |
|---------------------|--------|--------|--------|--------|--------|--------|--------|-----------|--------|--------|--------|--------|
|                |   | High   |   |   | Low    |   |   | Dividends |   |   | High   |   |   | Low |   |   | Dividends |   |
|                |   |   |   |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |
| First      Quarter  |   | $      | 5.17   |   |   | $      | 3.80   |      |   | $      | 0.01   |   |   | $ | 8.10 |   |   | $ | 5.11 |   |   | $ | 0.01 |   |
| Second      Quarter |   |   | 6.80   |   |   |   | 4.49   |      |   |   | 0.01   |   |   |   | 8.35 |   |   |   | 6.25 |   |   |   | 0.01 |   |
| Third      Quarter  |   |   | 6.92   |   |   |   | 5.10   |      |   |   | 0.01   |   |   |   | 6.85 |   |   |   | 4.99 |   |   |   | 0.01 |   |
| Fourth      Quarter |   |   | 6.85   |   |   |   | 5.86   |      |   |   | 0.01   |   |   |   | 6.13 |   |   |   | 4.42 |   |   |   | 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, 2009   |   |                                                      | 500    |   |   | $ | 5.16 |   |   |   | 500 |   |   |   | 403,910 |   |
| November      1 - November 30, 2009 |   |                                                      | 8,900  |   |   |   | 6.07 |   |   |   | 8,900 |   |   |   | 395,010 |   |
| December      1 - December 31, 2009 |   |                                                      | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                |   |                                                      | 9,400  |   |   | $ | 6.07 |   |   |   | 9,400 |   |   |   | 395,010 |   |

----

| Company, Headquarters          |         | Exchange     |         | Trading Symbol |         | Established |
|-------------------------------------|--------------|--------------|--------------|---------------------|--------------|-------------|
|                                |         |         |         |                |         |        |
| Cardinal      Financial Corporation |         | NASDAQ-GS    |         | CFNL                |         | 1997        |
| Fairfax,      Virginia              |         |         |         |                |         |        |
|                                |         |         |         |                |         |        |
| Eagle      Bancorp, Inc.            |         | NASDAQ-CM    |         | EGBN                |         | 1997        |
| Bethesda,      Maryland             |         |         |         |                |         |        |
|                                |         |         |         |                |         |        |
| TowneBank                           |         | NASDAQ-GS    |         | TOWN                |         | 1999        |
|  Portsmouth,      Virginia     |         |         |         |                |         |        |
|                                |         |         |         |                |         |        |
| Valley      Financial Corporation   |         | NASDAQ-CM    |         | VYFC                |         | 1994        |
| Roanoke,      Virginia              |         |         |         |                |         |        |
|                                |         |         |         |                |         |        |
|                                |         |         |         |                |         |        |
| Virginia      National Bank         |         |  OTC-BB |         | VABK                |         | 1998        |
| Charlottesville,      Virginia      |    |         |    |                |    |        |

----

|                             |   | Period Ending |   |
|----------------------------------|--------|--------------------|--------|
| Index                            |   | 12/31/04           |   |   | 12/31/05 |   |   | 12/31/06 |   |   | 12/31/07 |   |   | 12/31/08 |   |   | 12/31/09 |   |
| Access      National Corporation |   |               | 100.00 |   |   |   | 201.56 |   |   |   | 135.48 |   |   |   | 86.04 |   |   |   | 68.67 |   |   |   | 85.17 |   |
| S&P      500                 |   |               | 100.00 |   |   |   | 104.91 |   |   |   | 121.48 |   |   |   | 128.16 |   |   |   | 80.74 |   |   |   | 102.11 |   |
| Peer      Group Index*           |   |               | 100.00 |   |   |   | 102.58 |   |   |   | 103.35 |   |   |   | 85.49 |   |   |   | 88.97 |   |   |   | 70.18 |   |

----

|                                                                     |   | Selected Financial Data                              |       |
|--------------------------------------------------------------------------|--------|----------------------------------------------------------------|------------|
|                                                                     |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                     |   | Year Ended December 31,                         |       |
|                                                                     |   | 2009                                                           |       |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                     |   | (In Thousands, Except for Share Data) |       |
| Income      Statement Data:                                              |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      interest income                                                 |   | $                                                              | 23,558     |   |   | $ | 21,052 |   |   | $ | 20,122 |   |   | $ | 18,256 |   |   | $ | 15,273 |   |
| Provision      for loan losses                                           |   |                                                           | 6,064      |   |   |   | 5,423 |   |   |   | 2,588 |   |   |   | 232 |   |   |   | 1,196 |   |
| Non-interest      income                                                 |   |                                                           | 56,966     |   |   |   | 30,813 |   |   |   | 27,707 |   |   |   | 27,633 |   |   |   | 30,956 |   |
| Non-interest      expense                                                |   |                                                           | 58,971     |   |   |   | 38,998 |   |   |   | 39,949 |   |   |   | 34,212 |   |   |   | 35,830 |   |
| Income      taxes                                                        |   |                                                           | 5,854      |   |   |   | 2,700 |   |   |   | 1,590 |   |   |   | 3,853 |   |   |   | 3,305 |   |
| Net      income                                                          |   | $                                                              | 9,635      |   |   | $ | 4,744 |   |   | $ | 3,702 |   |   | $ | 7,592 |   |   | $ | 5,898 |   |
|                                                                     |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Per      Share Data:                                                     |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings      per share                                                  |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                                                    |   | $                                                              | 0.93       |   |   | $ | 0.46 |   |   | $ | 0.32 |   |   | $ | 0.81 |   |   | $ | 0.75 |   |
| Diluted                                                                  |   |                                                           | 0.92       |   |   |   | 0.46 |   |   |   | 0.31 |   |   |   | 0.72 |   |   |   | 0.63 |   |
| Cash      dividends paid                                                 |   |                                                           | 0.04       |   |   |   | 0.04 |   |   |   | 0.04 |   |   |   | 0.02 |   |   |   | - |   |
| Book      value at period end                                            |   |                                                           | 6.43       |   |   |   | 5.66 |   |   |   | 5.35 |   |   |   | 5.27 |   |   |   | 3.92 |   |
|                                                                     |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      Sheet Data:                                                 |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                                                        |   | $                                                              | 666,879    |   |   | $ | 702,324 |   |   | $ | 622,376 |   |   | $ | 644,782 |   |   | $ | 537,050 |   |
| Loans      held for sale                                                 |   |                                                           | 76,232     |   |   |   | 84,312 |   |   |   | 39,144 |   |   |   | 65,320 |   |   |   | 45,019 |   |
| Total      loans                                                         |   |                                                           | 486,564    |   |   |   | 485,929 |   |   |   | 477,598 |   |   |   | 433,594 |   |   |   | 369,733 |   |
| Total      securities                                                    |   |                                                           | 47,838     |   |   |   | 91,015 |   |   |   | 73,558 |   |   |   | 105,163 |   |   |   | 87,771 |   |
| Total      deposits                                                      |   |                                                           | 466,645    |   |   |   | 485,401 |   |   |   | 473,418 |   |   |   | 438,932 |   |   |   | 419,629 |   |
| Shareholders'      equity                                                |   |                                                           | 67,778     |   |   |   | 57,945 |   |   |   | 57,961 |   |   |   | 62,295 |   |   |   | 31,185 |   |
| Average      shares outstanding, basic                                   |   |                                                           | 10,391,348 |   |   |   | 10,298,631 |   |   |   | 11,620,130 |   |   |   | 9,429,074 |   |   |   | 7,867,135 |   |
| Average      shares outstanding, diluted                                 |   |                                                           | 10,432,857 |   |   |   | 10,423,555 |   |   |   | 11,866,468 |   |   |   | 10,541,873 |   |   |   | 9,423,087 |   |
|                                                                     |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance      Ratios:                                                 |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return      on average assets                                            |   |                                                           | 1.35       | % |   |   | 0.76 | % |   |   | 0.57 | % |   |   | 1.29 | % |   |   | 1.29 | % |
| Return      on average equity                                            |   |                                                           | 15.04      | % |   |   | 8.34 | % |   |   | 5.84 | % |   |   | 17.15 | % |   |   | 20.63 | % |
| Net      interest margin (1)                                             |   |                                                           | 3.42       | % |   |   | 3.48 | % |   |   | 3.18 | % |   |   | 3.21 | % |   |   | 3.49 | % |
|                                                                     |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Efficiency      Ratios:                                                  |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Access      National Bank                                                |   |                                                           | 60.41      | % |   |   | 55.36 | % |   |   | 50.87 | % |   |   | 48.67 | % |   |   | 52.21 | % |
| Access      National Mortgage Corp.                                      |   |                                                           | 77.40      | % |   |   | 86.65 | % |   |   | 107.52 | % |   |   | 92.42 | % |   |   | 89.13 | % |
| Access      National Corporation                                         |   |                                                           | 73.23      | % |   |   | 75.19 | % |   |   | 83.52 | % |   |   | 75.06 | % |   |   | 80.09 | % |
|                                                                     |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset      Quality Ratios:                                               |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance      to period end loans                                       |   |                                                           | 1.88       | % |   |   | 1.54 | % |   |   | 1.56 | % |   |   | 1.26 | % |   |   | 1.41 | % |
| Allowance      to non-performing loans                                   |   |                                                           | 129.79     | % |   |   | 259.55 | % |   |   | 449.25 | % |   |   | 1514.60 | % |   |   | 397.78 | % |
| Net      charge-offs to average loans                                    |   |                                                           | 1.08       | % |   |   | 1.06 | % |   |   | 0.12 | % |   |   | - |   |   |   | - |   |
| (1)      Net interest income divided by total average earning    assets. |   |                                                           |       |   |   |   |   |   |   |   |   |   |   |

----

|                                |   | Year      Ended December 31,               |    |
|-------------------------------------|--------|--------------------------------------------|---------|
|                                |   | 2009                                       |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                |   | (In      Thousands, Except for Share Data) |    |
| Average      Balance Sheet Data:    |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                   |   | $                                          | 714,970 |   |   | $ | 624,450 |   |   | $ | 649,584 |   |   | $ | 589,834 |   |   | $ | 457,251 |   |
| Securities                          |   |                                       | 69,758  |   |   |   | 68,861 |   |   |   | 94,331 |   |   |   | 107,165 |   |   |   | 64,862 |   |
| Loans      held for sale            |   |                                       | 65,780  |   |   |   | 25,757 |   |   |   | 49,750 |   |   |   | 53,935 |   |   |   | 45,688 |   |
| Loans                               |   |                                       | 490,393 |   |   |   | 484,764 |   |   |   | 472,372 |   |   |   | 400,211 |   |   |   | 318,438 |   |
| Allowance      for loan losses      |   |                                       | 8,065   |   |   |   | 8,248 |   |   |   | 6,170 |   |   |   | 5,363 |   |   |   | 4,433 |   |
| Total      deposits                 |   |                                       | 519,477 |   |   |   | 450,873 |   |   |   | 444,999 |   |   |   | 423,788 |   |   |   | 337,403 |   |
| Junior      subordinated debentures |   |                                       | 6,186   |   |   |   | 6,186 |   |   |   | 9,237 |   |   |   | 10,311 |   |   |   | 10,311 |   |
| Total      shareholders' equity     |   |                                       | 64,054  |   |   |   | 56,882 |   |   |   | 63,343 |   |   |   | 44,270 |   |   |   | 28,586 |   |
|                                |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital      Ratios:                |   |                                       |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier      1 risk-based capital      |   |                                       | 13.47   | % |   |   | 11.86 | % |   |   | 12.41 | % |   |   | 15.01 | % |   |   | 10.78 | % |
| Total      risk-based capital       |   |                                       | 14.73   | % |   |   | 13.11 | % |   |   | 13.66 | % |   |   | 16.18 | % |   |   | 12.11 | % |
| Leverage      capital ratio         |   |                                       | 10.73   | % |   |   | 9.71 | % |   |   | 10.07 | % |   |   | 11.53 | % |   |   | 7.60 | % |

----

----

|                                           |   | Investment      Securities Available for Sale |   |
|------------------------------------------------|--------|-----------------------------------------------|--------|
|                                           |   |                                          |   |
|                                           |   | December      31,                             |   |
|                                           |   | 2009                                          |   |   | 2008 |   |   | 2007 |   |
|                                           |   | (In      Thousands)                           |   |
| Investment      Securities Available for Sale: |   |                                          |   |   |   |   |   |   |   |
| US      Treasury                               |   | $                                             | -      |   |   | $ | 1,006 |   |   | $ | 1,013 |   |
| US      Government agency                      |   |                                          | 40,154 |   |   |   | 76,354 |   |   |   | 61,720 |   |
| Mortgage      backed                           |   |                                          | 743    |   |   |   | 1,391 |   |   |   | 799 |   |
| Tax      exempt municipals                     |   |                                          | -      |   |   |   | - |   |   |   | 2,891 |   |
| Taxable      municipals                        |   |                                          | 699    |   |   |   | 4,920 |   |   |   | 1,099 |   |
| CRA      Mutual fund                           |   |                                          | 1,499  |   |   |   | 1,448 |   |   |   | 1,479 |   |
| Restricted      stock                          |   |                                          | 4,743  |   |   |   | 5,896 |   |   |   | 4,557 |   |
| Total      securities                          |   | $                                             | 47,838 |   |   | $ | 91,015 |   |   | $ | 73,558 |   |

|                                               |   | Maturity Schedule of Investment Securities Available for Sale 2009 |   |
|----------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------|--------|
|                                               |   |                                                                                                       |   |
|                                               |   |                                                                                                       |   |   |   |   |   | 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      Treasury                                   |   | $                                                                                                          | -      |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |
| US      Government agency                          |   |                                                                                                       | 5,145  |   |   |   | 1.00 | % |   |   | 15,023 |   |   |   | 1.58 | % |   |   | 19,986 |   |   |   | 4.73 | % |   |   | - |   |   |   | - |   |   |   | 40,154 |   |   |   | 3.07 | % |
| Mortgage      backed                               |   |                                                                                                       | 33     |   |   |   | 5.00 | % |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 710 |   |   |   | 6.02 | % |   |   | 743 |   |   |   | 5.98 | % |
| Tax      exempt municipals                         |   |                                                                                                       | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Taxable      municipals                            |   |                                                                                                       | -      |   |   |   | - |   |   |   | 699 |   |   |   | 4.30 | % |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 699 |   |   |   | 4.30 | % |
| Total                                              |   | $                                                                                                          | 5,178  |   |   |   | 1.03 | % |   | $ | 15,722 |   |   |   | 1.70 | % |   | $ | 19,986 |   |   |   | 4.73 | % |   | $ | 710 |   |   |   | 6.02 | % |   | $ | 41,596 |   |   |   | 3.14 | % |

----

|                          |   | Composition of Loan Portfolio |    |
|-------------------------------|--------|----------------------------------------------|---------|
|                          |   | Year Ended December 31,       |    |
|                          |   | 2009                                         |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                          |   | Amount                                       |    |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |   | Amount |   |   | Percentageof Total |   |
|                          |   | (Dollars In Thousands)             |    |
| Commercial                    |   | $                                            | 72,628  |   |   |   | 14.93 | % |   | $ | 69,537 |   |   |   | 14.31 | % |   | $ | 64,860 |   |   |   | 13.58 | % |   | $ | 51,825 |   |   |   | 11.95 | % |   | $ | 38,516 |   |   |   | 10.42 | % |
| Commercial      real estate   |   |                                         | 220,301 |   |   |   | 45.28 |   |   |   | 218,539 |   |   |   | 44.97 |   |   |   | 199,894 |   |   |   | 41.85 |   |   |   | 159,996 |   |   |   | 36.90 |   |   |   | 137,423 |   |   |   | 37.17 |   |
| Real      estate construction |   |                                         | 41,508  |   |   |   | 8.53 |   |   |   | 42,600 |   |   |   | 8.77 |   |   |   | 55,074 |   |   |   | 11.53 |   |   |   | 68,570 |   |   |   | 15.81 |   |   |   | 37,054 |   |   |   | 10.02 |   |
| Residential      real estate  |   |                                         | 150,792 |   |   |   | 30.99 |   |   |   | 153,740 |   |   |   | 31.64 |   |   |   | 156,731 |   |   |   | 32.82 |   |   |   | 152,648 |   |   |   | 35.21 |   |   |   | 156,185 |   |   |   | 42.24 |   |
| Consumer      and other       |   |                                         | 1,335   |   |   |   | 0.27 |   |   |   | 1,513 |   |   |   | 0.31 |   |   |   | 1,039 |   |   |   | 0.22 |   |   |   | 555 |   |   |   | 0.13 |   |   |   | 555 |   |   |   | 0.15 |   |
|                          |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      loans              |   | $                                            | 486,564 |   |   |   | 100.00 | % |   | $ | 485,929 |   |   |   | 100.00 | % |   | $ | 477,598 |   |   |   | 100.00 | % |   | $ | 433,594 |   |   |   | 100.00 | % |   | $ | 369,733 |   |   |   | 100.00 | % |

|                                    |   | Loan Maturity Distribution |   |
|-----------------------------------------|--------|--------------------------------------|--------|
|                                    |   | December 31, 2009          |   |
|                                    |   | Three Months or            |   |   | Over Three Months |   |   | Over One Year |   |   | Over |   |   |   |   |
|                                    |   | Less                                 |   |   | Through One Year |   |   | Through Five Years |   |   | Five Years |   |   | Total |   |
|                                    |   | (In Thousands)                  |   |
| Commercial                              |   | $                                    | 15,725 |   |   | $ | 27,302 |   |   | $ | 22,572 |   |   | $ | 7,029 |   |   | $ | 72,628 |   |
| Commercial      real estate             |   |                                 | 26,981 |   |   |   | 36,548 |   |   |   | 141,199 |   |   |   | 15,573 |   |   |   | 220,301 |   |
| Real      estate construction           |   |                                 | 11,203 |   |   |   | 24,662 |   |   |   | 5,616 |   |   |   | 27 |   |   |   | 41,508 |   |
| Residential      real estate            |   |                                 | 41,744 |   |   |   | 39,068 |   |   |   | 57,988 |   |   |   | 11,992 |   |   |   | 150,792 |   |
| Consumer      and other                 |   |                                 | 131    |   |   |   | 663 |   |   |   | 540 |   |   |   | - |   |   |   | 1,334 |   |
| Total                                   |   | $                                    | 95,784 |   |   | $ | 128,243 |   |   | $ | 227,915 |   |   | $ | 34,621 |   |   | $ | 486,563 |   |
|                                    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      with fixed interest rates    |   | $                                    | 15,471 |   |   | $ | 24,799 |   |   | $ | 79,545 |   |   | $ | 16,277 |   |   | $ | 136,092 |   |
| Loans      with floating interest rates |   |                                 | 80,313 |   |   |   | 103,444 |   |   |   | 148,370 |   |   |   | 18,344 |   |   |   | 350,471 |   |
| Total                                   |   | $                                    | 95,784 |   |   | $ | 128,243 |   |   | $ | 227,915 |   |   | $ | 34,621 |   |   | $ | 486,563 |   |

----

|                            |   | Allowance      for Loan Losses |   |
|---------------------------------|--------|--------------------------------|--------|
|                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                            |   | Year      Ended December 31,   |   |
|                            |   | 2009                           |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                            |   | (In      Thousands)            |   |
| Balance,      beginning of year |   | $                              | 7,462  |   |   | $ | 7,462 |   |   | $ | 5,452 |   |   | $ | 5,215 |   |   | $ | 4,019 |   |
|                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision      for loan losses  |   |                           | 6,064  |   |   |   | 5,423 |   |   |   | 2,588 |   |   |   | 232 |   |   |   | 1,196 |   |
|                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs:                    |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                      |   |                           | 1,541  |   |   |   | 184 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial      real estate     |   |                           | 1,648  |   |   |   | 4,038 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate construction   |   |                           | 1,247  |   |   |   | 241 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential      real estate    |   |                           | 851    |   |   |   | 1,055 |   |   |   | 580 |   |   |   | - |   |   |   | - |   |
| Consumer      and other         |   |                           | 23     |   |   |   | 42 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total      charge-offs          |   |                           | 5,310  |   |   |   | 5,560 |   |   |   | 580 |   |   |   | - |   |   |   | - |   |
| Recoveries:                     |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                      |   |                           | 374    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial      real estate     |   |                           | 294    |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate construction   |   |                           | 66     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential      real estate    |   |                           | 79     |   |   |   | 137 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer      and other         |   |                           | 98     |   |   |   | - |   |   |   | 2 |   |   |   | 5 |   |   |   | - |   |
| Total      recoveries           |   |                           | 911    |   |   |   | 137 |   |   |   | 2 |   |   |   | 5 |   |   |   | - |   |
| Net      charge-offs            |   |                           | (4,399 | ) |   |   | (5,423 | ) |   |   | (578 | ) |   |   | 5 |   |   |   | - |   |
|                            |   |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance,      end of year       |   | $                              | 9,127  |   |   | $ | 7,462 |   |   | $ | 7,462 |   |   | $ | 5,452 |   |   | $ | 5,215 |   |

|                          |   | Allocation of the Allowance for Loan Losses |   |
|-------------------------------|--------|---------------------------------------------------------------------------|--------|
|                          |   |                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   | Year Ended December 31,                                    |   |
|                          |   | 2009                                                                      |   |   | Percentageof total |   |   | 2008 |   |   | Percentageof total |   |   | 2007 |   |   | Percentageof total |   |   | 2006 |   |   | Percentageof total |   |   | 2005 |   |   | Percentageof total |   |
|                          |   | (Dollars In Thousands)                                          |   |
| Commercial                    |   | $                                                                         | 1,589  |   |   |   | 17.41 | % |   | $ | 1,816 |   |   |   | 24.34 | % |   | $ | 1,341 |   |   |   | 17.97 | % |   | $ | 802 |   |   |   | 14.71 | % |   | $ | 1,546 |   |   |   | 29.64 | % |
| Commercial      real estate   |   |                                                                      | 4,285  |   |   |   | 46.95 |   |   |   | 2,948 |   |   |   | 39.51 |   |   |   | 3,487 |   |   |   | 46.73 |   |   |   | 2,296 |   |   |   | 42.11 |   |   |   | 1,896 |   |   |   | 36.36 |   |
| Real      estate construction |   |                                                                      | 549    |   |   |   | 6.02 |   |   |   | 805 |   |   |   | 10.79 |   |   |   | 929 |   |   |   | 12.45 |   |   |   | 1,055 |   |   |   | 19.35 |   |   |   | 499 |   |   |   | 9.58 |   |
| Residential      real estate  |   |                                                                      | 2,690  |   |   |   | 29.47 |   |   |   | 1,880 |   |   |   | 25.19 |   |   |   | 1,695 |   |   |   | 22.72 |   |   |   | 1,293 |   |   |   | 23.72 |   |   |   | 1,267 |   |   |   | 24.30 |   |
| Consumer      and other       |   |                                                                      | 14     |   |   |   | 0.15 |   |   |   | 13 |   |   |   | 0.17 |   |   |   | 10 |   |   |   | 0.13 |   |   |   | 6 |   |   |   | 0.11 |   |   |   | 6 |   |   |   | 0.12 |   |
| Total                         |   | $                                                                         | 9,127  |   |   |   | 100.00 | % |   | $ | 7,462 |   |   |   | 100.00 | % |   | $ | 7,462 |   |   |   | 100.00 | % |   | $ | 5,452 |   |   |   | 100.00 | % |   | $ | 5,215 |   |   |   | 100.00 | % |

----

|                                    |   | Non-performing      Assets and Accruing Loans Past Due 90 Days or More |   |
|-----------------------------------------|--------|------------------------------------------------------------------------|--------|
|                                    |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   | December      31,                                                      |   |
|                                    |   | 2009                                                                   |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                    |   | (Dollars      In Thousands)                                            |   |
| Non-accrual      loans:                 |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                              |   | $                                                                      | 208    |   |   | $ | 74 |   |   | $ | 187 |   |   | $ | - |   |   | $ | 1,311 |   |
| Commercial      real estate             |   |                                                                   | 3,631  |   |   |   | 22 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Real      estate construction           |   |                                                                   | 1,689  |   |   |   | 2,678 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Residential      real estate            |   |                                                                   | 1,504  |   |   |   | - |   |   |   | 1,474 |   |   |   | 360 |   |   |   | - |   |
| Consumer      and other                 |   |                                                                   | -      |   |   |   | 101 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total      non-accrual loans            |   |                                                                   | 7,032  |   |   |   | 2,875 |   |   |   | 1,661 |   |   |   | 360 |   |   |   | 1,311 |   |
|                                    |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restructured      loans                 |   |                                                                   | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                    |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      real estate owned ("OREO")   |   |                                                                   | 5,111  |   |   |   | 4,455 |   |   |   | 1,041 |   |   |   | - |   |   |   | - |   |
|                                    |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      non-performing assets        |   | $                                                                      | 12,143 |   |   | $ | 7,330 |   |   | $ | 2,702 |   |   | $ | 360 |   |   | $ | 1,311 |   |
|                                    |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio      of non-performing assets to: |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      loans plus OREO              |   |                                                                   | 2.47   | % |   |   | 1.49 | % |   |   | 0.56 | % |   |   | 0.08 | % |   |   | 0.35 | % |
|                                    |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      assets                       |   |                                                                   | 1.82   |   |   |   | 1.04 |   |   |   | 0.43 |   |   |   | 0.06 |   |   |   | 0.24 |   |
|                                    |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Accruing      past due loans:           |   |                                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 90      or more days past due           |   | $                                                                      | -      |   |   | $ | - |   |   | $ | - |   |   | $ | 914 |   |   | $ | - |   |

----

|                                      |   | Average Deposits and Average Rates Paid |    |
|-------------------------------------------|--------|------------------------------------------------------------------|---------|
|                                      |   |                                                             |    |
|                                      |   | Year Ended December 31,                           |    |
|                                      |   | 2009                                                             |    |   | 2008 |   |   | 2007 |   |
|                                      |   | 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     |   | $                                                                | 27,224  |   |   | $ | 278 |   |   |   | 1.02 | % |   | $ | 8,956 |   |   | $ | 100 |   |   |   | 1.12 | % |   | $ | 9,507 |   |   | $ | 199 |   |   |   | 2.09 | % |
| Money      market deposit accounts        |   |                                                             | 92,682  |   |   |   | 1,403 |   |   |   | 1.51 | % |   |   | 112,391 |   |   |   | 2,653 |   |   |   | 2.36 | % |   |   | 111,344 |   |   |   | 4,888 |   |   |   | 4.39 | % |
| Savings      accounts                     |   |                                                             | 4,470   |   |   |   | 60 |   |   |   | 1.34 | % |   |   | 3,137 |   |   |   | 101 |   |   |   | 3.22 | % |   |   | 4,989 |   |   |   | 231 |   |   |   | 4.63 | % |
| Time      deposits                        |   |                                                             | 316,823 |   |   |   | 8,827 |   |   |   | 2.79 | % |   |   | 263,175 |   |   |   | 11,197 |   |   |   | 4.25 | % |   |   | 256,805 |   |   |   | 12,808 |   |   |   | 4.99 | % |
| Total      interest bearing deposits      |   |                                                             | 441,199 |   |   |   | 10,568 |   |   |   | 2.40 | % |   |   | 387,659 |   |   |   | 14,051 |   |   |   | 3.62 | % |   |   | 382,645 |   |   |   | 18,126 |   |   |   | 4.74 | % |
| Non-interest      bearing demand deposits |   |                                                             | 78,278  |   |   |   |   |   |   |   |   |   |   |   | 63,214 |   |   |   |   |   |   |   |   |   |   |   | 62,354 |   |   |   |   |   |   |   |   |   |
| Total      deposits                       |   | $                                                                | 519,477 |   |   |   |   |   |   |   |   |   |   | $ | 450,873 |   |   |   |   |   |   |   |   |   |   | $ | 444,999 |   |   |   |   |   |   |   |   |   |

|                                   |   | Certificate of Deposit Maturity Distribution |    |
|----------------------------------------|--------|------------------------------------------------------------------|---------|
|                                   |   |                                                             |    |   |   |   |   |   |   |   |   |   |
|                                   |   | December 31, 2009                                      |    |
|                                   |   | Three months                                                |    |   | Over three |   |   | Over |   |   |   |   |
|                                   |   | or less                                                     |    |   | through twelve months |   |   | twelve months |   |   | Total |   |
|                                   |   | (In Thousands)                                              |    |
| Less      than $100,000                |   | $                                                                | 39,044  |   |   | $ | 32,786 |   |   | $ | 23,148 |   |   | $ | 94,978 |   |
| Greater      than or equal to $100,000 |   |                                                             | 82,430  |   |   |   | 36,687 |   |   |   | 43,780 |   |   |   | 162,897 |   |
|                                   |   | $                                                                | 121,474 |   |   | $ | 69,473 |   |   | $ | 66,928 |   |   | $ | 257,875 |   |

----

|                                                |   | Borrowed      Funds Distribution |    |
|-----------------------------------------------------|--------|----------------------------------|---------|
|                                                |   |                             |    |   |   |   |   |   |   |
|                                                |   | Year      Ended December 31,     |    |
|                                                |   | 2009                             |    |   | 2008 |   |   | 2007 |   |
|                                                |   | (Dollars      In Thousands)      |    |
| At      Period End                                  |   |                             |    |   |   |   |   |   |   |
| FHLB      advances                                  |   | $                                | 20,179  |   |   | $ | 44,333 |   |   | $ | 15,500 |   |
| Securities      sold under agreements to repurchase |   |                             | 26,804  |   |   |   | 21,395 |   |   |   | 14,814 |   |
| Commercial      paper                               |   |                             | 16,517  |   |   |   | 26,136 |   |   |   | 9,454 |   |
| U.S.      Treasury demand note                      |   |                             | 750     |   |   |   | 1,718 |   |   |   | 1,907 |   |
| FHLB      long term borrowings                      |   |                             | 16,333  |   |   |   | 41,107 |   |   |   | 39,524 |   |
| Senior      unsecured term note                     |   |                             | 29,997  |   |   |   | - |   |   |   | - |   |
| Subordinated      debentures                        |   |                             | 6,186   |   |   |   | 6,186 |   |   |   | 6,186 |   |
| Federal      funds purchased                        |   |                             | -       |   |   |   | 9,993 |   |   |   | - |   |
| Total      at period end                            |   | $                                | 116,766 |   |   | $ | 150,868 |   |   | $ | 87,385 |   |
|                                                |   |                             |    |   |   |   |   |   |   |   |   |   |
| Average      Balances                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| FHLB      advances                                  |   | $                                | 23,676  |   |   | $ | 13,524 |   |   | $ | 60,224 |   |
| Securities      sold under agreements to repurchase |   |                             | 23,283  |   |   |   | 16,269 |   |   |   | 11,695 |   |
| Commercial      paper                               |   |                             | 16,934  |   |   |   | 19,836 |   |   |   | 15,679 |   |
| U.S.      Treasury demand note                      |   |                             | 706     |   |   |   | 861 |   |   |   | 234 |   |
| FHLB      long term borrowings                      |   |                             | 24,026  |   |   |   | 54,173 |   |   |   | 41,932 |   |
| Senior      unsecured term note                     |   |                             | 26,627  |   |   |   | - |   |   |   | - |   |
| Subordinated      debentures                        |   |                             | 6,186   |   |   |   | 6,186 |   |   |   | 9,237 |   |
| Federal      funds purchased                        |   |                             | 177     |   |   |   | 164 |   |   |   | 716 |   |
| Total      average balance                          |   | $                                | 121,615 |   |   | $ | 111,013 |   |   | $ | 139,717 |   |
|                                                |   |                             |    |   |   |   |   |   |   |   |   |   |
| Average      rate paid on all borrowed funds        |   |                             | 2.80    | % |   |   | 3.32 | % |   |   | 5.14 | % |

----

|                                               |   | Risk      Based Capital Analysis |    |
|----------------------------------------------------|--------|----------------------------------|---------|
|                                               |   |                             |    |   |   |   |   |   |   |
|                                               |   | Year      Ended December 31,     |    |
|                                               |   | 2009                             |    |   | 2008 |   |   | 2007 |   |
|                                               |   | (Dollars      In Thousands)      |    |
| Tier      1 Capital:                               |   |                             |    |   |   |   |   |   |   |
| Common      stock                                  |   | $                                | 8,799   |   |   | $ | 8,551 |   |   | $ | 9,052 |   |
| Capital      surplus                               |   |                             | 18,552  |   |   |   | 17,411 |   |   |   | 21,833 |   |
| Retained      earnings                             |   |                             | 40,376  |   |   |   | 31,123 |   |   |   | 26,832 |   |
| Subordinated      debt (trust preferred debenture) |   |                             | 6,000   |   |   |   | 6,000 |   |   |   | 6,000 |   |
| Less:      Disallowed servicing assets             |   |                             | (123    | ) |   |   | - |   |   |   | - |   |
| Total      Tier 1 Capital                          |   |                             | 73,604  |   |   |   | 63,085 |   |   |   | 63,717 |   |
| Subordinated      debt not included in Tier 1      |   |                             | -       |   |   |   | - |   |   |   | - |   |
| Allowance      for loan losses                     |   |                             | 6,861   |   |   |   | 6,662 |   |   |   | 6,585 |   |
|                                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| Total      Risk Based Capital                      |   | $                                | 80,465  |   |   | $ | 69,747 |   |   | $ | 70,302 |   |
|                                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| Risk      weighted assets                          |   | $                                | 546,288 |   |   | $ | 532,195 |   |   | $ | 525,676 |   |
|                                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| Quarterly      average assets                      |   | $                                | 685,754 |   |   | $ | 649,817 |   |   | $ | 632,752 |   |
|                                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| Capital      Ratios:                               |   |                             |    |   |   |   |   |   |   |   |   |   |
| Tier      1 risk based capital ratio               |   |                             | 13.47   | % |   |   | 11.86 | % |   |   | 12.12 | % |
| Total      risk based capital ratio                |   |                             | 14.73   | % |   |   | 13.11 | % |   |   | 13.37 | % |
| Leverage      ratio                                |   |                             | 10.73   | % |   |   | 9.71 | % |   |   | 10.07 | % |

----

|                                                                                 |   | Yield      on Average Earning Assets and Rates on Average Interest-Bearing      Liabilities* |    |
|--------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|---------|
|                                                                                 |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                 |   | Year      Ended December 31,                                                                 |    |
|                                                                                 |   | 2009                                                                                         |    |   | 2008 |   |   | 2007 |   |
|                                                                                 |   | 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                                                                           |   | $                                                                                            | 68,852  |   |   | $ | 3,038 |   |   |   | 4.41 | % |   | $ | 68,522 |   |   | $ | 3,440 |   |   |   | 5.02 | % |   | $ | 94,331 |   |   | $ | 4,324 |   |   |   | 4.58 | % |
| Loans(3)                                                                             |   |                                                                                         | 556,173 |   |   |   | 34,334 |   |   |   | 6.17 | % |   |   | 510,521 |   |   |   | 34,875 |   |   |   | 6.83 | % |   |   | 522,122 |   |   |   | 40,303 |   |   |   | 7.72 | % |
| Interest      bearing deposits and federal funds sold                                |   |                                                                                         | 64,128  |   |   |   | 154 |   |   |   | 0.24 | % |   |   | 26,911 |   |   |   | 487 |   |   |   | 1.81 | % |   |   | 17,474 |   |   |   | 846 |   |   |   | 4.84 | % |
| Total      interest earning assets                                                   |   |                                                                                         | 689,153 |   |   |   | 37,526 |   |   |   | 5.45 | % |   |   | 605,954 |   |   |   | 38,802 |   |   |   | 6.40 | % |   |   | 633,927 |   |   |   | 45,473 |   |   |   | 7.17 | % |
| Non-interest      earning assets:                                                    |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                         |   |                                                                                         | 6,748   |   |   |   |   |   |   |   |   |   |   |   | 5,257 |   |   |   |   |   |   |   |   |   |   |   | 6,784 |   |   |   |   |   |   |   |   |   |
| Premises,      land and equipment                                                    |   |                                                                                         | 8,991   |   |   |   |   |   |   |   |   |   |   |   | 9,475 |   |   |   |   |   |   |   |   |   |   |   | 9,710 |   |   |   |   |   |   |   |   |   |
| Other      assets                                                                    |   |                                                                                         | 18,143  |   |   |   |   |   |   |   |   |   |   |   | 12,012 |   |   |   |   |   |   |   |   |   |   |   | 5,333 |   |   |   |   |   |   |   |   |   |
| Less:      allowance for loan losses                                                 |   |                                                                                         | (8,065  | ) |   |   |   |   |   |   |   |   |   |   | (8,248 | ) |   |   |   |   |   |   |   |   |   |   | (6,170 | ) |   |   |   |   |   |   |   |   |
| Total      non-interest earning assets                                               |   |                                                                                         | 25,817  |   |   |   |   |   |   |   |   |   |   |   | 18,496 |   |   |   |   |   |   |   |   |   |   |   | 15,657 |   |   |   |   |   |   |   |   |   |
| Total      Assets                                                                    |   | $                                                                                            | 714,970 |   |   |   |   |   |   |   |   |   |   | $ | 624,450 |   |   |   |   |   |   |   |   |   |   | $ | 649,584 |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Shareholders' Equity:                                           |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing liabilities:                                                   |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand deposits                                                |   | $                                                                                            | 27,224  |   |   | $ | 278 |   |   |   | 1.02 | % |   | $ | 8,956 |   |   | $ | 100 |   |   |   | 1.12 | % |   | $ | 9,507 |   |   | $ | 199 |   |   |   | 2.09 | % |
| Money      market deposit accounts                                                   |   |                                                                                         | 92,682  |   |   |   | 1,403 |   |   |   | 1.51 | % |   |   | 112,391 |   |   |   | 2,653 |   |   |   | 2.36 | % |   |   | 111,344 |   |   |   | 4,888 |   |   |   | 4.39 | % |
| Savings      accounts                                                                |   |                                                                                         | 4,470   |   |   |   | 60 |   |   |   | 1.34 | % |   |   | 3,137 |   |   |   | 101 |   |   |   | 3.22 | % |   |   | 4,989 |   |   |   | 231 |   |   |   | 4.63 | % |
| Time      deposits                                                                   |   |                                                                                         | 316,823 |   |   |   | 8,827 |   |   |   | 2.79 | % |   |   | 263,175 |   |   |   | 11,197 |   |   |   | 4.25 | % |   |   | 256,805 |   |   |   | 12,808 |   |   |   | 4.99 | % |
| Total      interest bearing deposits                                                 |   |                                                                                         | 441,199 |   |   |   | 10,568 |   |   |   | 2.40 | % |   |   | 387,659 |   |   |   | 14,051 |   |   |   | 3.62 | % |   |   | 382,645 |   |   |   | 18,126 |   |   |   | 4.74 | % |
| FHLB      Advances                                                                   |   |                                                                                         | 23,676  |   |   |   | 979 |   |   |   | 4.13 | % |   |   | 13,524 |   |   |   | 454 |   |   |   | 3.36 | % |   |   | 60,224 |   |   |   | 3,197 |   |   |   | 5.31 | % |
| Securities      sold under agreements to repurchase and federal funds      purchased |   |                                                                                         | 23,460  |   |   |   | 115 |   |   |   | 0.49 | % |   |   | 16,433 |   |   |   | 260 |   |   |   | 1.58 | % |   |   | 12,410 |   |   |   | 516 |   |   |   | 4.16 | % |
| Other      short-term borrowings                                                     |   |                                                                                         | 17,640  |   |   |   | 167 |   |   |   | 0.95 | % |   |   | 20,697 |   |   |   | 363 |   |   |   | 1.75 | % |   |   | 15,913 |   |   |   | 641 |   |   |   | 4.03 | % |
| Long-term      borrowings                                                            |   |                                                                                         | 50,653  |   |   |   | 1,901 |   |   |   | 3.75 | % |   |   | 54,173 |   |   |   | 2,195 |   |   |   | 4.05 | % |   |   | 41,932 |   |   |   | 2,018 |   |   |   | 4.81 | % |
| Subordinated      debentures                                                         |   |                                                                                         | 6,186   |   |   |   | 238 |   |   |   | 3.85 | % |   |   | 6,186 |   |   |   | 417 |   |   |   | 6.74 | % |   |   | 9,237 |   |   |   | 806 |   |   |   | 8.73 | % |
| Total      interest bearing liabilities                                              |   |                                                                                         | 562,814 |   |   |   | 13,968 |   |   |   | 2.48 | % |   |   | 498,672 |   |   |   | 17,740 |   |   |   | 3.56 | % |   |   | 522,361 |   |   |   | 25,304 |   |   |   | 4.84 | % |
| Non-interest      bearing liabilities:                                               |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits                                                                 |   |                                                                                         | 78,278  |   |   |   |   |   |   |   |   |   |   |   | 63,214 |   |   |   |   |   |   |   |   |   |   |   | 62,354 |   |   |   |   |   |   |   |   |   |
| Other      liabilities                                                               |   |                                                                                         | 9,824   |   |   |   |   |   |   |   |   |   |   |   | 5,682 |   |   |   |   |   |   |   |   |   |   |   | 1,526 |   |   |   |   |   |   |   |   |   |
| Total  liabilities                                                         |   |                                                                                         | 650,916 |   |   |   |   |   |   |   |   |   |   |   | 567,568 |   |   |   |   |   |   |   |   |   |   |   | 586,241 |   |   |   |   |   |   |   |   |   |
| Shareholders'      Equity                                                            |   |                                                                                         | 64,054  |   |   |   |   |   |   |   |   |   |   |   | 56,882 |   |   |   |   |   |   |   |   |   |   |   | 63,343 |   |   |   |   |   |   |   |   |   |
| Total      Liabilities and Shareholders' Equity:                                     |   | $                                                                                            | 714,970 |   |   |   |   |   |   |   |   |   |   | $ | 624,450 |   |   |   |   |   |   |   |   |   |   | $ | 649,584 |   |   |   |   |   |   |   |   |   |
|                                                                                 |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Spread(1)                                                                   |   |                                                                                         |    |   |   |   |   |   |   |   | 2.97 | % |   |   |   |   |   |   |   |   |   |   | 2.84 | % |   |   |   |   |   |   |   |   |   |   | 2.33 | % |
|                                                                                 |   |                                                                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Margin(2)                                                               |   |                                                                                         |    |   |   | $ | 23,558 |   |   |   | 3.42 | % |   |   |   |   |   | $ | 21,062 |   |   |   | 3.48 | % |   |   |   |   |   | $ | 20,169 |   |   |   | 3.18 | % |

----

|                                           |   | Volume and Rate Analysis |   |
|-----------------------------------------------------|--------|-----------------------------------------|--------|
|                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   | Years Ended December 31, |   |
|                                                |   | 2009 compared to 2008    |   |   | 2008 compared to 2007 |   |   | 2007 compared to 2006 |   |
|                                                |   | 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                                         |   | $                                       | (402   | ) |   | $ | 16 |   |   | $ | (418 | ) |   | $ | (884 | ) |   | $ | (1,267 | ) |   | $ | 383 |   |   | $ | (363 | ) |   | $ | (584 | ) |   | $ | 221 |   |
| Loans                                               |   |                                    | (541   | ) |   |   | 2,974 |   |   |   | (3,515 | ) |   |   | (5,428 | ) |   |   | (879 | ) |   |   | (4,549 | ) |   |   | 5,404 |   |   |   | 5,226 |   |   |   | 178 |   |
| Interest      bearing deposits                      |   |                                    | (319   | ) |   |   | 319 |   |   |   | (638 | ) |   |   | (356 | ) |   |   | 299 |   |   |   | (655 | ) |   |   | 431 |   |   |   | 434 |   |   |   | (3 | ) |
| Federal      funds sold                             |   |                                    | (14    | ) |   |   | (7 | ) |   |   | (7 | ) |   |   | (2 | ) |   |   | 18 |   |   |   | (20 | ) |   |   | 15 |   |   |   | 16 |   |   |   | (1 | ) |
|                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Increase (Decrease) in Interest Income   |   |                                    | (1,276 | ) |   |   | 3,302 |   |   |   | (4,578 | ) |   |   | (6,670 | ) |   |   | (1,829 | ) |   |   | (4,841 | ) |   |   | 5,487 |   |   |   | 5,092 |   |   |   | 395 |   |
|                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      Bearing Liabilities:                  |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest      bearing demand deposits               |   |                                    | 177    |   |   |   | 187 |   |   |   | (10 | ) |   |   | (99 | ) |   |   | (11 | ) |   |   | (88 | ) |   |   | (25 | ) |   |   | (24 | ) |   |   | (1 | ) |
| Money      market deposit accounts                  |   |                                    | (1,250 | ) |   |   | (410 | ) |   |   | (840 | ) |   |   | (2,235 | ) |   |   | 46 |   |   |   | (2,281 | ) |   |   | 29 |   |   |   | (304 | ) |   |   | 333 |   |
| Savings      accounts                               |   |                                    | (42    | ) |   |   | 32 |   |   |   | (74 | ) |   |   | (130 | ) |   |   | (71 | ) |   |   | (59 | ) |   |   | 143 |   |   |   | 130 |   |   |   | 13 |   |
| Time      deposits                                  |   |                                    | (2,368 | ) |   |   | 1,990 |   |   |   | (4,358 | ) |   |   | (1,611 | ) |   |   | 311 |   |   |   | (1,922 | ) |   |   | 2,203 |   |   |   | 1,240 |   |   |   | 963 |   |
| Total      interest bearing deposits                |   |                                    | (3,483 | ) |   |   | 1,799 |   |   |   | (5,282 | ) |   |   | (4,075 | ) |   |   | 275 |   |   |   | (4,350 | ) |   |   | 2,350 |   |   |   | 1,042 |   |   |   | 1,308 |   |
| FHLB      Advances                                  |   |                                    | 525    |   |   |   | 401 |   |   |   | 124 |   |   |   | (2,743 | ) |   |   | (1,861 | ) |   |   | (882 | ) |   |   | 36 |   |   |   | (42 | ) |   |   | 78 |   |
| Securities      sold under agreements to repurchase |   |                                    | (145   | ) |   |   | 82 |   |   |   | (227 | ) |   |   | (256 | ) |   |   | 132 |   |   |   | (388 | ) |   |   | 350 |   |   |   | 304 |   |   |   | 46 |   |
| Other      short-term borrowings                    |   |                                    | (196   | ) |   |   | (48 | ) |   |   | (148 | ) |   |   | (278 | ) |   |   | 155 |   |   |   | (433 | ) |   |   | (97 | ) |   |   | (54 | ) |   |   | (43 | ) |
| Long-term      borrowings                           |   |                                    | (294   | ) |   |   | (138 | ) |   |   | (156 | ) |   |   | 177 |   |   |   | 529 |   |   |   | (352 | ) |   |   | 1,056 |   |   |   | 851 |   |   |   | 205 |   |
| Trust      preferred                                |   |                                    | (179   | ) |   |   | - |   |   |   | (179 | ) |   |   | (389 | ) |   |   | (230 | ) |   |   | (159 | ) |   |   | (74 | ) |   |   | (95 | ) |   |   | 21 |   |
|                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      Increase (Decrease) in Interest Expense  |   |                                    | (3,772 | ) |   |   | 2,096 |   |   |   | (5,868 | ) |   |   | (7,564 | ) |   |   | (1,000 | ) |   |   | (6,564 | ) |   |   | 3,621 |   |   |   | 2,006 |   |   |   | 1,615 |   |
|                                                |   |                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase      (Decrease) in Net Interest Income     |   | $                                       | 2,496  |   |   | $ | 1,206 |   |   | $ | 1,290 |   |   | $ | 894 |   |   | $ | (829 | ) |   | $ | 1,723 |   |   | $ | 1,866 |   |   | $ | 3,086 |   |   | $ | (1,220 | ) |

----

----

|                                                     |   | First                                      |   |   | Second  |   |   | Third   |   |   | Fourth  |   |   | Total  |   |
|----------------------------------------------------------|--------|--------------------------------------------|--------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                                                     |   | Quarter                                    |   |   | Quarter |   |   | Quarter |   |   | Quarter |   |   | YTD    |   |
|                                                     |   | (In      Thousands, Except Per 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      non-interest income                           |   |                                       | 15,160 |   |    |   | 18,052 |    |   |   | 10,923  |   |   |   | 12,831 |   |   |   | 56,966 |   |
| Total      non-interest 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 |   |
|                                                     |   |                                       |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
|                                                     |   | First                                      |   |   | Second  |   |   | Third   |   |   | Fourth  |   |   | Total  |   |
|                                                     |   | Quarter                                    |   |   | Quarter |   |   | Quarter |   |   | Quarter |   |   | YTD    |   |
|                                                     |   | (In      Thousands, Except Per Share Data) |   |
|                                                     |   |                                       |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| 2008                                                     |   |                                       |   |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Total      interest income                               |   | $                                          | 10,019 |   |    | $      | 9,511  |    |   | $      | 9,727   |   |   | $      | 9,535  |   |   | $ | 38,792 |   |
| Total      interest expense                              |   |                                       | 5,237  |   |    |   | 4,262  |    |   |   | 4,172   |   |   |   | 4,069  |   |   |   | 17,740 |   |
| Net      interest income                                 |   |                                       | 4,782  |   |    |   | 5,249  |    |   |   | 5,555   |   |   |   | 5,466  |   |   |   | 21,052 |   |
| Provision      for loan losses                           |   |                                       | 408    |   |    |   | 1,399  |    |   |   | 1,855   |   |   |   | 1,761  |   |   |   | 5,423 |   |
| Net      interest income after provision for loan losses |   |                                       | 4,374  |   |    |   | 3,850  |    |   |   | 3,700   |   |   |   | 3,705  |   |   |   | 15,629 |   |
| Total      non-interest income                           |   |                                       | 8,442  |   |    |   | 8,022  |    |   |   | 5,640   |   |   |   | 8,709  |   |   |   | 30,813 |   |
| Total      non-interest expense                          |   |                                       | 10,181 |   |    |   | 10,215 |    |   |   | 8,147   |   |   |   | 10,455 |   |   |   | 38,998 |   |
| Income      tax expense                                  |   |                                       | 944    |   |    |   | 595    |    |   |   | 424     |   |   |   | 737    |   |   |   | 2,700 |   |
| Net      income                                          |   | $                                          | 1,691  |   |    | $      | 1,062  |    |   | $      | 769     |   |   | $      | 1,222  |   |   | $ | 4,744 |   |

----

|                                                |   | Payments      Due By Period |    |
|-----------------------------------------------------|--------|-----------------------------|---------|
|                                                |   | December      31, 2009      |    |
|                                                |   | Less      Than              |    |   | 1      - 3 |   |   | More Than |   |   |   |   |
|                                                |   | 1      Year                 |    |   | Years |   |   | 3      Years |   |   | Total |   |
|                                                |   | (In      Thousands)         |    |
| Certificates      of deposit                        |   | $                           | 190,947 |   |   | $ | 53,656 |   |   | $ | 13,272 |   |   | $ | 257,875 |   |
| FHLB      advances                                  |   |                        | 20,179  |   |   |   | - |   |   |   | - |   |   |   | 20,179 |   |
| Securities      sold under agreements to repurchase |   |                        | 26,804  |   |   |   | - |   |   |   | - |   |   |   | 26,804 |   |
| FHLB      long-term borrowings                      |   |                        | -       |   |   |   | 7,083 |   |   |   | 9,250 |   |   |   | 16,333 |   |
| Senior      unsecured term note                     |   |                        | -       |   |   |   | 29,997 |   |   |   | - |   |   |   | 29,997 |   |
| Commercial      paper                               |   |                        | 16,517  |   |   |   | - |   |   |   | - |   |   |   | 16,517 |   |
| US      treasury demand notes                       |   |                        | 750     |   |   |   | - |   |   |   | - |   |   |   | 750 |   |
| Subordinated      debentures                        |   |                        | -       |   |   |   | - |   |   |   | 6,186 |   |   |   | 6,186 |   |
| Leases                                              |   |                        | -       |   |   |   | 1,200 |   |   |   | 740 |   |   |   | 1,940 |   |
| Total                                               |   | $                           | 255,197 |   |   | $ | 91,936 |   |   | $ | 29,448 |   |   | $ | 376,581 |   |

----

| Allowance      For Losses On Mortgage Loans Sold |   |
|--------------------------------------------------|--------|
|                                             |   |   |   |   |   |   |
|                                             |   | December      31, |   |
|                                             |   | 2009 |   |   | 2008 |   |
|                                             |   |   |   |   |   |   |
| Balance      at beginning of year                |   | $ | 1,439 |   |   | $ | 119 |   |
| Provision      charged to operating expense      |   |   | 5,050 |   |   |   | 2,095 |   |
| Recoveries                                       |   |   | 16 |   |   |   | 16 |   |
| Charge-offs                                      |   |   | (3,173 | ) |   |   | (791 | ) |
| Balance      at end of year                      |   | $ | 3,332 |   |   | $ | 1,439 |   |

----

----

----

----

|                                                                                                                                      |   | December      31, |    |
|-------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|
|                                                                                                                                      |   | 2009              |    |   | 2008 |   |
| Assets                                                                                                                                    |   |              |    |   |   |   |
|                                                                                                                                      |   |              |    |   |   |   |
| Cash      and due from banks                                                                                                              |   | $                 | 5,965   |   |   | $ | 8,785 |   |
| Interest      bearing deposits in other banks and federal funds sold                                                                      |   |              | 25,256  |   |   |   | 13,697 |   |
| Securities      available for sale, at fair value                                                                                         |   |              | 47,838  |   |   |   | 91,015 |   |
| Loans      held for sale, at fair value                                                                                                   |   |              | 76,232  |   |   |   | 84,312 |   |
| Loans,      net of allowance for loan losses 2009, $ 9,127; 2008,    $7,462                                                               |   |              | 477,437 |   |   |   | 478,467 |   |
| Premises      and equipment, net                                                                                                          |   |              | 8,759   |   |   |   | 9,211 |   |
| Accrued      interest receivable and other assets                                                                                         |   |              | 25,392  |   |   |   | 16,837 |   |
| Total      assets                                                                                                                         |   | $                 | 666,879 |   |   | $ | 702,324 |   |
|                                                                                                                                      |   |              |    |   |   |   |   |   |
| Liabilities      and Shareholders' Equity                                                                                                 |   |              |    |   |   |   |   |   |
|                                                                                                                                      |   |              |    |   |   |   |   |   |
| Liabilities                                                                                                                               |   |              |    |   |   |   |   |   |
| Deposits                                                                                                                                  |   |              |    |   |   |   |   |   |
| Non-interest      bearing demand deposits                                                                                                 |   | $                 | 69,782  |   |   | $ | 75,000 |   |
| Savings      and interest bearing deposits                                                                                                |   |              | 138,988 |   |   |   | 95,730 |   |
| Time      deposits                                                                                                                        |   |              | 257,875 |   |   |   | 314,671 |   |
| Total      deposits                                                                                                                       |   |              | 466,645 |   |   |   | 485,401 |   |
|                                                                                                                                      |   |              |    |   |   |   |   |   |
| Short      term borrowings                                                                                                                |   |              | 64,249  |   |   |   | 103,575 |   |
| Long      term borrowings                                                                                                                 |   |              | 46,330  |   |   |   | 41,107 |   |
| Subordinated      debentures                                                                                                              |   |              | 6,186   |   |   |   | 6,186 |   |
| Other      liabilities and accrued expenses                                                                                               |   |              | 15,691  |   |   |   | 8,110 |   |
| Total      liabilities                                                                                                                    |   |              | 599,101 |   |   |   | 644,379 |   |
|                                                                                                                                      |   |              |    |   |   |   |   |   |
| Shareholders'      Equity                                                                                                                 |   |              |    |   |   |   |   |   |
| Common      stock, par value, $.835, authorized 60,000,000 shares, issued and      outstanding, 10,537,428 in 2009 and 10,240,747 in 2008 |   |              | 8,799   |   |   |   | 8,551 |   |
| Additional      paid in capital                                                                                                           |   |              | 18,552  |   |   |   | 17,410 |   |
| Retained      earnings                                                                                                                    |   |              | 40,377  |   |   |   | 31,157 |   |
| Accumulated      other comprehensive income, net                                                                                          |   |              | 50      |   |   |   | 827 |   |
| Total      shareholders' equity                                                                                                           |   |              | 67,778  |   |   |   | 57,945 |   |
|                                                                                                                                      |   |              |    |   |   |   |   |   |
| Total      liabilities and shareholders' equity                                                                                           |   | $                 | 666,879 |   |   | $ | 702,324 |   |

----

|                                                     |   | Year      Ended December 31, |       |
|----------------------------------------------------------|--------|------------------------------|------------|
|                                                     |   | 2009                         |       |   | 2008 |   |   | 2007 |   |
| Interest      and Dividend Income                        |   |                         |       |   |   |   |   |   |   |
| Loans                                                    |   | $                            | 34,334     |   |   | $ | 34,875 |   |   | $ | 40,303 |   |
| Interest      bearing deposits and federal funds sold    |   |                         | 154        |   |   |   | 486 |   |   |   | 846 |   |
| Securities                                               |   |                         | 3,038      |   |   |   | 3,431 |   |   |   | 4,277 |   |
| Total      interest and dividend income                  |   |                         | 37,526     |   |   |   | 38,792 |   |   |   | 45,426 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Interest      Expense                                    |   |                         |       |   |   |   |   |   |   |   |   |   |
| Deposits                                                 |   |                         | 10,568     |   |   |   | 14,051 |   |   |   | 18,125 |   |
| Short-term      borrowings                               |   |                         | 1,261      |   |   |   | 1,077 |   |   |   | 4,354 |   |
| Long-term      borrowings                                |   |                         | 1,901      |   |   |   | 2,195 |   |   |   | 2,018 |   |
| Subordinated      debentures                             |   |                         | 238        |   |   |   | 417 |   |   |   | 807 |   |
| Total      interest expense                              |   |                         | 13,968     |   |   |   | 17,740 |   |   |   | 25,304 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Net      interest income                                 |   |                         | 23,558     |   |   |   | 21,052 |   |   |   | 20,122 |   |
| Provision      for loan losses                           |   |                         | 6,064      |   |   |   | 5,423 |   |   |   | 2,588 |   |
| Net      interest income after provision for loan losses |   |                         | 17,494     |   |   |   | 15,629 |   |   |   | 17,534 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Non-Interest      Income                                 |   |                         |       |   |   |   |   |   |   |   |   |   |
| Service      fees on deposit accounts                    |   |                         | 536        |   |   |   | 438 |   |   |   | 365 |   |
| Gain      on sale of loans                               |   |                         | 49,262     |   |   |   | 24,859 |   |   |   | 20,241 |   |
| Mortgage      broker fee income                          |   |                         | 918        |   |   |   | 1,672 |   |   |   | 3,890 |   |
| Other      income                                        |   |                         | 6,250      |   |   |   | 3,844 |   |   |   | 3,211 |   |
| Total      non-interest income                           |   |                         | 56,966     |   |   |   | 30,813 |   |   |   | 27,707 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Non-Interest      Expense                                |   |                         |       |   |   |   |   |   |   |   |   |   |
| Compensation      and employee benefits                  |   |                         | 28,122     |   |   |   | 20,781 |   |   |   | 19,578 |   |
| Occupancy                                                |   |                         | 1,726      |   |   |   | 1,546 |   |   |   | 1,419 |   |
| Furniture      and equipment                             |   |                         | 771        |   |   |   | 933 |   |   |   | 1,111 |   |
| Other                                                    |   |                         | 28,352     |   |   |   | 15,738 |   |   |   | 17,841 |   |
| Total      non-interest expense                          |   |                         | 58,971     |   |   |   | 38,998 |   |   |   | 39,949 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Income      before income taxes                          |   |                         | 15,489     |   |   |   | 7,444 |   |   |   | 5,292 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Income      taxes                                        |   |                         | 5,854      |   |   |   | 2,700 |   |   |   | 1,590 |   |
| Net      Income                                          |   | $                            | 9,635      |   |   | $ | 4,744 |   |   | $ | 3,702 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Earnings      per common share:                          |   |                         |       |   |   |   |   |   |   |   |   |   |
| Basic                                                    |   | $                            | 0.93       |   |   | $ | 0.46 |   |   | $ | 0.32 |   |
| Diluted                                                  |   | $                            | 0.92       |   |   | $ | 0.46 |   |   | $ | 0.31 |   |
|                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Average      outstanding shares:                         |   |                         |       |   |   |   |   |   |   |   |   |   |
| Basic                                                    |   |                         | 10,391,348 |   |   |   | 10,298,631 |   |   |   | 11,620,130 |   |
| Diluted                                                  |   |                         | 10,432,857 |   |   |   | 10,423,555 |   |   |   | 11,866,468 |   |

----

Consolidated Statements of Changes in Shareholders'Equity

|                                                                                                                    |   |   |   |   |         |   |   |     |   |   | Accumulated        |   |   |   |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------------|--------|--------|----------|--------|--------|--------------------|--------|--------|--------|--------|
|                                                                                                                    |   |   |   |   |         |   |   |     |   |   | Other              |   |   |   |   |
|                                                                                                                    |   |   |   |   | Additional   |   |   |     |   |   | Compre-            |   |   |   |   |
|                                                                                                                    |   | Common |   |   | Paid      in |   |   | Retained |   |   | hensive            |   |   |   |   |
|                                                                                                                    |   | Stock  |   |   | Capital      |   |   | Earnings |   |   | Income      (Loss) |   |   | Total  |   |
| Balance,      December 31, 2006                                                                                         |   | $      | 9,867  |   |         | $      | 29,316 |     |   | $      | 23,641             |   |   | $      | (529   | ) |   | $ | 62,295 |   |
|                                                                                                                    |   |   |   |   |         |   |   |     |   |   |               |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                                                              |   |   |   |   |         |   |   |     |   |   |               |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                         |   |   | -      |   |         |   | -      |     |   |   | 3,702              |   |   |   | -      |   |   |   | 3,702 |   |
| Other      comprehensive income,  unrealized holdings gains arising during      the period (net of tax, $391) |   |   | -      |   |         |   | -      |     |   |   | -                  |   |   |   | 759    |   |   |   | 759 |   |
| Total      comprehensive income                                                                                         |   |   |   |   |         |   |   |     |   |   |               |   |   |   |   |   |   |   | 4,461 |   |
| Stock      options exercised (178,320 shares)                                                                           |   |   | 149    |   |         |   | 151    |     |   |   | -                  |   |   |   | -      |   |   |   | 300 |   |
| Dividend      reinvestment plan (91,105 shares)                                                                         |   |   | 76     |   |         |   | 729    |     |   |   | -                  |   |   |   | -      |   |   |   | 805 |   |
| Repurchase      of common stock under share repurchase program (1,245,624      shares)                                  |   |   | (1,040 | )      |         |   | (8,462 | )        |   |   | -                  |   |   |   | -      |   |   |   | (9,502 | ) |
| Cash      dividend                                                                                                      |   |   | -      |   |         |   | -      |     |   |   | (497               | )      |   |   | -      |   |   |   | (497 | ) |
| Stock-based      compensation expense recognized in earnings                                                            |   |   | -      |   |         |   | 99     |     |   |   | -                  |   |   |   | -      |   |   |   | 99 |   |
|                                                                                                                    |   |   |   |   |         |   |   |     |   |   |               |   |   |   |   |   |   |   |   |   |
| 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 |   |

----

|                                                                                        |   | Year      Ended December 31, |       |
|---------------------------------------------------------------------------------------------|--------|------------------------------|------------|
|                                                                                        |   | 2009                         |       |   | 2008 |   |   | 2007 |   |
| Cash      Flows from Operating Activities                                                   |   |                         |       |   |   |   |   |   |   |
| Net      income                                                                             |   | $                            | 9,635      |   |   | $ | 4,744 |   |   | $ | 3,702 |   |
| Adjustments      to reconcile net income to net cash provided by operating      activities: |   |                         |       |   |   |   |   |   |   |   |   |   |
| Provision      for loan losses                                                              |   |                         | 6,064      |   |   |   | 5,423 |   |   |   | 2,588 |   |
| Provision      for losses on mortgage loans sold                                            |   |                         | 5,050      |   |   |   | 2,095 |   |   |   | 1,750 |   |
| Writedown      of other real estate owned                                                   |   |                         | 1,245      |   |   |   | - |   |   |   | 714 |   |
| Gain      on sale of securities                                                             |   |                         | (984       | ) |   |   | (12 | ) |   |   | - |   |
| Deferred      tax benefit                                                                   |   |                         | (1,525     | ) |   |   | (906 | ) |   |   | (1,106 | ) |
| Stock      based compensation                                                               |   |                         | 162        |   |   |   | 136 |   |   |   | 99 |   |
| Valuation      allowance on derivatives                                                     |   |                         | (75        | ) |   |   | (231 | ) |   |   | 68 |   |
| Net      amortization on securities                                                         |   |                         | 72         |   |   |   | 2 |   |   |   | (20 | ) |
| Depreciation      and amortization                                                          |   |                         | 565        |   |   |   | 747 |   |   |   | 839 |   |
| Loss      on disposal of assets                                                             |   |                         | 2          |   |   |   | 5 |   |   |   | 1 |   |
| Changes      in assets and liabilities:                                                     |   |                         |       |   |   |   |   |   |   |   |   |   |
| Valuation      of loans held for sale carried at fair value                                 |   |                         | (1,626     | ) |   |   | (2,109 | ) |   |   | - |   |
| Originations      of loans held for sale                                                    |   |                         | (1,515,880 | ) |   |   | (775,857 | ) |   |   | (886,433 | ) |
| Proceed      from sale of loans held for sale                                               |   |                         | 1,525,586  |   |   |   | 732,798 |   |   |   | 912,609 |   |
| Increase      in other assets                                                               |   |                         | (8,228     | ) |   |   | (8,221 | ) |   |   | (1,851 | ) |
| Increase      (decrease) in other liabilities                                               |   |                         | 2,530      |   |   |   | 2,404 |   |   |   | (3,860 | ) |
| Net      cash provided by (used in) operating activities                                    |   |                         | 22,593     |   |   |   | (38,982 | ) |   |   | 28,386 |   |
| Cash      Flows from Investing Activities                                                   |   |                         |       |   |   |   |   |   |   |   |   |   |
| Proceeds      from maturities and calls of securities available for sale                    |   |                         | 63,556     |   |   |   | 61,357 |   |   |   | 66,612 |   |
| Proceeds      from sale of securities                                                       |   |                         | 15,312     |   |   |   | 2,939 |   |   |   | - |   |
| Purchases      of securities available for sale                                             |   |                         | (35,955    | ) |   |   | (80,840 | ) |   |   | (33,838 | ) |
| Net      increase in loans                                                                  |   |                         | (5,035     | ) |   |   | (13,754 | ) |   |   | (44,581 | ) |
| Proceeds      from sale of assets                                                           |   |                         | 23         |   |   |   | 35 |   |   |   | 23 |   |
| Proceeds      from sales of other real estate owned                                         |   |                         | 350        |   |   |   | 2,449 |   |   |   | 1,363 |   |
| Purchases      of premises and equipment                                                    |   |                         | (58        | ) |   |   | (199 | ) |   |   | (970 | ) |
| Net      cash provided by (used in) investing activities                                    |   |                         | 38,193     |   |   |   | (28,013 | ) |   |   | (11,391 | ) |
| Cash      Flows from Financing Activities                                                   |   |                         |       |   |   |   |   |   |   |   |   |   |
| Net      increase (decrease) in demand, interest bearing demand and savings      deposits   |   |                         | 37,940     |   |   |   | (31,505 | ) |   |   | 2,704 |   |
| Net      (decrease) increase in time deposits                                               |   |                         | (56,696    | ) |   |   | 43,488 |   |   |   | 31,782 |   |
| (Decrease)      increase in securities sold under agreement to repurchase                   |   |                         | (4,584     | ) |   |   | 16,574 |   |   |   | 273 |   |
| Net      (decrease) increase in other short-term borrowings                                 |   |                         | (34,742    | ) |   |   | 45,326 |   |   |   | (43,548 | ) |
| Net      increase in long-term borrowings                                                   |   |                         | 5,223      |   |   |   | 1,583 |   |   |   | (7,173 | ) |
| Proceeds      from issuance of common stock                                                 |   |                         | 1,400      |   |   |   | 870 |   |   |   | 1,105 |   |
| Repurchase      of common stock                                                             |   |                         | (173       | ) |   |   | (5,930 | ) |   |   | (9,502 | ) |
| Dividends      paid                                                                         |   |                         | (415       | ) |   |   | (433 | ) |   |   | (497 | ) |
| Net      cash (used in) provided by financing activities                                    |   |                         | (52,047    | ) |   |   | 69,973 |   |   |   | (24,856 | ) |
|                                                                                        |   |                         |       |   |   |   |   |   |   |   |   |   |
| Increase      (decrease) in cash and cash equivalents                                       |   |                         | 8,739      |   |   |   | 2,978 |   |   |   | (7,861 | ) |
| Cash      and Cash Equivalents                                                              |   |                         |       |   |   |   |   |   |   |   |   |   |
| Beginning                                                                                   |   |                         | 22,482     |   |   |   | 19,504 |   |   |   | 27,365 |   |
| Ending                                                                                      |   | $                            | 31,221     |   |   | $ | 22,482 |   |   | $ | 19,504 |   |
| Supplemental      Disclosures of Cash Flow Information                                      |   |                         |       |   |   |   |   |   |   |   |   |   |
| Cash      payments for interest                                                             |   | $                            | 13,602     |   |   | $ | 17,360 |   |   | $ | 25,285 |   |
| Cash      payments for income taxes                                                         |   | $                            | 7,113      |   |   | $ | 3,480 |   |   | $ | 4,815 |   |
| Supplemental      Disclosures of Noncash Investing Activities                               |   |                         |       |   |   |   |   |   |   |   |   |   |
| Unrealized      (loss) gain on securities available for sale                                |   | $                            | (1,176     | ) |   | $ | 904 |   |   | $ | 1,150 |   |
| Loans      transferred to other realestate owned                                            |   | $                            | 2,250      |   |   | $ | 4,455 |   |   | $ | - |   |

----

----

----

----

----

----

|                            |   | December 31, 2009   |   |
|---------------------------------|--------|---------------------|--------|
|                            |   | Amortized Cost      |   |   | GrossUnrealizedGains |   |   | GrossUnrealized(Losses) |   |   | EstimatedFair Value |   |
|                            |   | (In      Thousands) |   |
| U.S.      Treasury notes        |   | $                   | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| 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 |   |
| Restricted      stock:          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Reserve Bank stock |   |                | 894    |   |   |   | - |   |   |   | - |   |   |   | 894 |   |
| FHLB      stock                 |   |                | 3,849  |   |   |   | - |   |   |   | - |   |   |   | 3,849 |   |
|                            |   | $                   | 47,763 |   |   | $ | 153 |   |   | $ | (78 | ) |   | $ | 47,838 |   |
|                            |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                            |   | December 31, 2008   |   |
|                            |   | Amortized Cost |   |   | GrossUnrealizedGains |   |   | GrossUnrealized(Losses) |   |   | EstimatedFair Value |   |
|                            |   | (In      Thousands) |   |
| U.S.      Treasury notes        |   | $                   | 999    |   |   | $ | 7 |   |   | $ | - |   |   | $ | 1,006 |   |
| U.S.      Government agencies   |   |                | 74,934 |   |   |   | 1,420 |   |   |   | - |   |   |   | 76,354 |   |
| Mortgage      backed securities |   |                | 1,428  |   |   |   | 2 |   |   |   | (39 | ) |   |   | 1,391 |   |
| Municipals      - taxable       |   |                | 5,006  |   |   |   | 3 |   |   |   | (89 | ) |   |   | 4,920 |   |
| CRA      Mutual fund            |   |                | 1,500  |   |   |   | - |   |   |   | (52 | ) |   |   | 1,448 |   |
| Restricted      stock:          |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal      Reserve Bank stock |   |                | 894    |   |   |   | - |   |   |   | - |   |   |   | 894 |   |
| FHLB      stock                 |   |                | 5,002  |   |   |   | - |   |   |   | - |   |   |   | 5,002 |   |
|                            |   | $                   | 89,763 |   |   | $ | 1,432 |   |   | $ | (180 | ) |   | $ | 91,015 |   |

----

|                                  |   | December      31, 2009 |   |
|---------------------------------------|--------|------------------------|--------|
|                                  |   |                   |   |   | Estimated |   |
|                                  |   | Amortized              |   |   | Fair |   |
|                                  |   | Cost                   |   |   | Value |   |
|                                  |   | (In      Thousands)    |   |
| US      Treasury and Agencies         |   |                   |   |   |   |   |
| Due      in one year or less          |   | $                      | 5,125  |   |   | $ | 5,145 |   |
| Due      after one through five years |   |                   | 15,000 |   |   |   | 15,023 |   |
| Due      after five through ten years |   |                   | 19,896 |   |   |   | 19,986 |   |
| Municipals      – taxable       |   |                   |   |   |   |   |   |   |
| Due      after one through five years |   |                   | 690    |   |   |   | 699 |   |
| Due      after five through ten years |   |                   | -      |   |   |   | - |   |
| Mortgage      Backed Securities:      |   |                   |   |   |   |   |   |   |
| Due      in one year or less          |   |                   | 33     |   |   |   | 33 |   |
| Due      after one through five years |   |                   | -      |   |   |   | - |   |
| Due      after fifteen years          |   |                   | 776    |   |   |   | 710 |   |
| CRA      Mutual fund                  |   |                   | 1,500  |   |   |   | 1,499 |   |
| Restricted      Stock:                |   |                   |   |   |   |   |   |   |
| Federal      Reserve Bank stock       |   |                   | 894    |   |   |   | 894 |   |
| FHLB      stock                       |   |                   | 3,849  |   |   |   | 3,849 |   |
|                                  |   | $                      | 47,763 |   |   | $ | 47,838 |   |

----

|                                           |   | 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: |   |                                  |   |   |                                  |   |   |   |   |   |       |   |   |   |   |   |   |   |
|                                           |   |                                  |   |   |                                  |   |   |   |   |   |       |   |   |   |   |   |   |   |
| U.S.      Treasury securities                  |   | $                                     | -      |   |                                  | $      | -      |   |   | $      | -          |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Mortgage      backed securities                |   |                                  | -      |   |                                  |   | -      |   |   |   | 710        |   |   |   | (65 | ) |   |   | 710 |   |   |   | (65 | ) |
| U.S.      Government agencies                  |   |                                  | 9,988  |   |                                  |   | (12    | )      |   |   | -          |   |   |   | - |   |   |   | 9,988 |   |   |   | (12 | ) |
| Municipals      - taxable                      |   |                                  | -      |   |                                  |   | -      |   |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Municipals      - tax exempt                   |   |                                  | -      |   |                                  |   | -      |   |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| CRA      Mutual fund                           |   |                                  | -      |   |                                  |   | -      |   |   |   | 1,499      |   |   |   | (1 | ) |   |   | 1,499 |   |   |   | (1 | ) |
| Total                                          |   | $                                     | 9,988  |   |                                  | $      | (12    | )      |   | $      | 2,209      |   |   | $ | (66 | ) |   | $ | 12,197 |   |   | $ | (78 | ) |
|                                           |   |                                  |   |   |                                  |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Securities in a loss   |   |   | Securities in a loss   |   |   |   |   |   |       |   |   |   |
|                                           |   | Position for less than |   |   | Position for 12 Months |   |   |   |   |   |       |   |   |   |
|                                           |   | 12 Months                        |   |   | or Longer                        |   |   | Total  |   |
| December      31, 2008                         |   | Fair                                  |   |   | Unrealized                            |   |   | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                           |   | Value                                 |   |   | Losses                                |   |   | Value  |   |   | Losses     |   |   | Value |   |   | Losses |   |
|                                           |   | (In      Thousands)                   |   |
| Investment      securities available for sale: |   |                                  |   |   |                                  |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |                                  |   |   |                                  |   |   |   |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S.      Treasury securities                  |   | $                                     | -      |   |                                  | $      | -      |   |   | $      | -          |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Mortgage      backed securities                |   |                                  | 881    |   |                                  |   | (39    | )      |   |   | -          |   |   |   | - |   |   |   | 881 |   |   |   | (39 | ) |
| U.S.      Government agencies                  |   |                                  | -      |   |                                  |   | -      |   |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Municipals      - taxable                      |   |                                  | 4,012  |   |                                  |   | (89    | )      |   |   | -          |   |   |   | - |   |   |   | 4,012 |   |   |   | (89 | ) |
| Municipals      - tax exempt                   |   |                                  | -      |   |                                  |   | -      |   |   |   | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |
| CRA      Mutual fund                           |   |                                  | -      |   |                                  |   | -      |   |   |   | 1,448      |   |   |   | (52 | ) |   |   | 1,448 |   |   |   | (52 | ) |
| Total                                          |   | $                                     | 4,893  |   |                                  | $      | (128   | )      |   | $      | 1,448      |   |   | $ | (52 | ) |   | $ | 6,341 |   |   | $ | (180 | ) |

----

|                                |   | December      31,   |    |
|-------------------------------------|--------|---------------------|---------|
|                                |   | 2009                |    |   | 2008 |   |
|                                |   | (In      Thousands) |    |
| Loans      secured by real estate:  |   |                |    |   |   |   |   |   |
| Real      estate construction       |   | $                   | 41,508  |   |   | $ | 42,600 |   |
| Residential                         |   |                | 150,792 |   |   |   | 153,740 |   |
| Commercial      real estate         |   |                | 220,301 |   |   |   | 218,539 |   |
| Commercial                          |   |                | 72,628  |   |   |   | 69,537 |   |
| Consumer      and other             |   |                | 1,335   |   |   |   | 1,513 |   |
| Total      loans                    |   |                | 486,564 |   |   |   | 485,929 |   |
| Less      allowance for loan losses |   |                | 9,127   |   |   |   | 7,462 |   |
| Net      loans                      |   | $                   | 477,437 |   |   | $ | 478,467 |   |

|                                        |   | December      31,   |   |
|---------------------------------------------|--------|---------------------|--------|
|                                        |   | 2009                |   |   | 2008 |   |   | 2007 |   |
|                                        |   | (In      Thousands) |   |
| Balance      at beginning of year           |   | $                   | 7,462  |   |   | $ | 7,462 |   |   | $ | 5,452 |   |
| Provision      charged to operating expense |   |                | 6,064  |   |   |   | 5,423 |   |   |   | 2,588 |   |
| Loan      recoveries                        |   |                | 911    |   |   |   | 137 |   |   |   | 2 |   |
| Loan      charge-offs                       |   |                | (5,310 | ) |   |   | (5,560 | ) |   |   | (580 | ) |
| Balance      at end of year                 |   | $                   | 9,127  |   |   | $ | 7,462 |   |   | $ | 7,462 |   |

----

|                                    |   | December 31,                |   |
|-----------------------------------------|--------|-----------------------------|--------|
|                                    |   | 2009                        |   |   | 2008 |   |
|                                    |   | (Dollars      In Thousands) |   |
| Non-accrual      loans:                 |   |                        |   |   |   |   |
| Commercial                              |   | $                           | 208    |   |   | $ | 74 |   |
| Commercial      real estate             |   |                        | 3,631  |   |   |   | 22 |   |
| Real      estate construction           |   |                        | 1,689  |   |   |   | 2,678 |   |
| Residential      real estate            |   |                        | 1,504  |   |   |   | - |   |
| Consumer      and other                 |   |                        | -      |   |   |   | 101 |   |
| Total      non-accrual loans            |   |                        | 7,032  |   |   |   | 2,875 |   |
|                                    |   |                        |   |   |   |   |   |   |
| Other      real estate owned ("OREO")   |   |                        | 5,111  |   |   |   | 4,455 |   |
|                                    |   |                        |   |   |   |   |   |   |
| Total      non-performing assets        |   | $                           | 12,143 |   |   | $ | 7,330 |   |
|                                    |   |                        |   |   |   |   |   |   |
| Ratio      of non-performing assets to: |   |                        |   |   |   |   |   |   |
| Total      loans plus OREO              |   |                        | 2.47   | % |   |   | 1.49 | % |
|                                    |   |                        |   |   |   |   |   |   |
| Total      assets                       |   |                        | 1.82   | % |   |   | 1.04 | % |
|                                    |   |                        |   |   |   |   |   |   |
| Accruing      past due loans:           |   |                        |   |   |   |   |   |   |
| 90      or more days past due           |   | $                           | -      |   |   | $ | - |   |

|                               |   | December      31,   |   |
|------------------------------------|--------|---------------------|--------|
|                               |   | 2009                |   |   | 2008 |   |
|                               |   | (In      Thousands) |   |
| Land                               |   | $                   | 2,549  |   |   | $ | 2,549 |   |
| Premises                           |   |                | 5,765  |   |   |   | 5,749 |   |
| Leasehold      improvements        |   |                | 1,182  |   |   |   | 1,182 |   |
| Furniture      and equipment       |   |                | 3,125  |   |   |   | 3,132 |   |
|                               |   |                | 12,621 |   |   |   | 12,612 |   |
| Less      accumulated depreciation |   |                | (3,862 | ) |   |   | (3,401 | ) |
|                               |   | $                   | 8,759  |   |   | $ | 9,211 |   |

----

|                                      |   | 2009                        |    |   | 2008   |   |
|-------------------------------------------|--------|-----------------------------|---------|--------|--------|--------|
| Type of Account                           |   | Amount                      |    |   | %      |   |   | Amount |   |   | % |   |
|                                      |   | (Dollars      In Thousands) |    |
| Interest      bearing demand deposits     |   | $                           | 25,918  |   |   |   | 5.55 | % |   | $ | 9,854 |   |   |   | 2.03 | % |
| Money      market deposit accounts        |   |                        | 109,085 |   |   |   | 23.38 | % |   |   | 81,260 |   |   |   | 16.74 | % |
| Savings      accounts                     |   |                        | 3,985   |   |   |   | 0.85 | % |   |   | 4,616 |   |   |   | 0.95 | % |
| Time      deposits                        |   |                        | 257,875 |   |   |   | 55.27 | % |   |   | 314,671 |   |   |   | 64.83 | % |
| Total      interest bearing deposits      |   |                        | 396,863 |   |   |   | 85.05 | % |   |   | 410,401 |   |   |   | 84.55 | % |
| Non-interest      bearing demand deposits |   |                        | 69,782  |   |   |   | 14.95 | % |   |   | 75,000 |   |   |   | 15.45 | % |
| Total      deposits                       |   | $                           | 466,645 |   |   |   | 100.00 | % |   | $ | 485,401 |   |   |   | 100.00 | % |

| Year             |   | Amount              |    |
|------------------|--------|---------------------|---------|
|             |   | (In      Thousands) |    |
| 2010             |   | $                   | 190,948 |   |
| 2011             |   |                | 36,418  |   |
| 2012             |   |                | 17,237  |   |
| 2013             |   |                | 6,640   |   |
| 2014             |   |                | 3,224   |   |
| Later      years |   |                | 3,408   |   |
|             |   | $                   | 257,875 |   |

----

|                                                |   | December 31,                |   |
|-----------------------------------------------------|--------|-----------------------------|--------|
|                                                |   | 2009                        |   |   | 2008 |   |
|                                                |   | (Dollars      In Thousands) |   |
| Securities      sold under agreements to repurchase |   | $                           | 26,804 |   |   | $ | 21,395 |   |
| Commercial      paper arrangements                  |   |                        | 16,517 |   |   |   | 26,136 |   |
| FHLB      borrowings                                |   |                        | 20,178 |   |   |   | 44,333 |   |
| Federal      funds purchased                        |   |                        | -      |   |   |   | 9,993 |   |
| US      Treasury demand note                        |   |                        | 750    |   |   |   | 1,718 |   |
| Total                                               |   | $                           | 64,249 |   |   | $ | 103,575 |   |
|                                                |   |                        |   |   |   |   |   |   |
| Weighted      interest rate                         |   |                        | 1.96   | % |   |   | 1.10 | % |
|                                                |   |                        |   |   |   |   |   |   |
| Average      for the year ended December 31:        |   |                        |   |   |   |   |   |   |
| Outstanding                                         |   | $                           | 64,776 |   |   | $ | 50,749 |   |
| Interest      rate                                  |   |                        | 1.95   | % |   |   | 2.26 | % |
|                                                |   |                        |   |   |   |   |   |   |
| Maximum      month-end outstandings                 |   | $                           | 73,201 |   |   | $ | 103,575 |   |

----

|                                        |   | Long Term Borrowings |   |
|---------------------------------------------|--------|--------------------------------|--------|
|                                        |   |                           |   |   |   |   |
|                                        |   | December 31,              |   |
|                                        |   |                           |   |   |   |   |
|                                        |   | 2009                           |   |   | 2008 |   |
|                                        |   |                           |   |   |   |   |
|   FHLB      long-term borrowings  |   | $                              | 16,333 |   |   | $ | 41,107 |   |
|   Senior      unsecured term note |   |                           | 29,997 |   |   |   | - |   |
|   Subordinated      debenture     |   |                           | 6,186  |   |   |   | 6,186 |   |
| Total                                       |   | $                              | 52,516 |   |   |   | 47,293 |   |

|             |   | Amount              |   |
|------------------|--------|---------------------|--------|
|             |   | (In Thousands) |   |
| Due      in 2011 |   | $                   | 7,083  |   |
| Due      in 2013 |   |                | 3,250  |   |
| Due      in 2014 |   |                | 2,250  |   |
| Due      in 2015 |   |                | 3,750  |   |
| Total      Due   |   | $                   | 16,333 |   |

----

|                                                  |   | Year Ended December 31, |   |
|-------------------------------------------------------|--------|----------------------------------------|--------|
|                                                  |   | 2009                                   |   |   | 2008 |   |
|                                                  |   | (In Thousands)                    |   |
| Deferred      tax assets:                             |   |                                   |   |   |   |   |
| Allowance      for loan losses                        |   | $                                      | 3,103  |   |   | $ | 2,537 |   |
| Deferred      fees                                    |   |                                   | 509    |   |   |   | 415 |   |
| Allowance      for losses on mortgage loans sold      |   |                                   | 1,287  |   |   |   | 556 |   |
| Other                                                 |   |                                   | 622    |   |   |   | 481 |   |
|                                                  |   |                                   | 5,521  |   |   |   | 3,989 |   |
| Deferred      tax liability:                          |   |                                   |   |   |   |   |   |   |
| Depreciation                                          |   |                                   | 91     |   |   |   | 84 |   |
| Securities      available for sale                    |   |                                   | 26     |   |   |   | 426 |   |
|                                                  |   |                                   | 117    |   |   |   | 510 |   |
|                                                  |   |                                   |   |   |   |   |   |   |
| Net      deferred tax assets included in other assets |   | $                                      | 5,404  |   |   | $ | 3,479 |   |

|                        |   | Year Ended December 31, |   |
|-----------------------------|--------|-------------------------|--------|
|                        |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                        |   | (In      Thousands)     |   |
|                        |   |                    |   |   |   |   |   |   |   |
| Current      tax expense    |   | $                       | 7,379  |   |   | $ | 3,606 |   |   | $ | 2,696 |   |
| Deferred      tax (benefit) |   |                    | (1,525 | ) |   |   | (906 | ) |   |   | (1,106 | ) |
|                        |   | $                       | 5,854  |   |   | $ | 2,700 |   |   | $ | 1,590 |   |

----

|                                                     |   | Year Ended December 31, |   |
|----------------------------------------------------------|--------|-------------------------|--------|
|                                                     |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                                     |   | (In      Thousands)     |   |
| Computed      "expected" tax expense at 34%              |   | $                       | 5,266  |   |   | $ | 2,531 |   |   | $ | 1,799 |   |
| Increase      (decrease) in income taxes resulting from: |   |                    |   |   |   |   |   |   |   |   |   |   |
| State      income taxes                                  |   |                    | 532    |   |   |   | 144 |   |   |   | (180 | ) |
| Other                                                    |   |                    | 56     |   |   |   | 25 |   |   |   | (29 | ) |
|                                                     |   | $                       | 5,854  |   |   | $ | 2,700 |   |   | $ | 1,590 |   |

| Year   |   | Amount              |   |
|--------|--------|---------------------|--------|
|   |   | (In      Thousands) |   |
| 2010   |   | $                   | 390    |   |
| 2011   |   |                | 399    |   |
| 2012   |   |                | 411    |   |
| 2013   |   |                | 424    |   |
| 2014   |   |                | 316    |   |
|   |   | $                   | 1,940  |   |

----

|                                        |   | December 31, |   |
|---------------------------------------------|--------|-------------------|--------|
|                                        |   | 2009              |   |   | 2008 |   |
|                                        |   |              |   |   |   |   |
| Balance      at beginning of year           |   | $                 | 1,439  |   |   | $ | 119 |   |
| Provision      charged to operating expense |   |              | 5,050  |   |   |   | 2,095 |   |
| Recoveries                                  |   |              | 16     |   |   |   | 16 |   |
| Charge-offs                                 |   |              | (3,173 | )  |   |   | (791 | )  |
| Balance      at end of year            |   |              | 3,332  |   |   |   | 1,439 |   |

----

----

----

|                                    |   | 2009           |    |   | 2008                |   |   | 2007           |   |
|-----------------------------------------|--------|----------------|---------|--------|---------------------|--------|--------|----------------|--------|
|                                    |   |           |    |   | 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   |   |           | 589,617 |   |                | $      | 5.96   |           |   |   | 713,624 |   |   | $ | 6.07 |   |   |   | 815,244 |   |   | $ | 4.80 |   |
| Granted                                 |   |           | 106,750 |   |                |   | 4.08   |           |   |   | 97,375 |   |   |   | 6.29 |   |   |   | 80,900 |   |   |   | 9.47 |   |
| Exercised                               |   |           | 184,452 |   |                |   | 3.38   |           |   |   | 137,682 |   |   |   | 2.89 |   |   |   | 178,320 |   |   |   | 1.68 |   |
| Lapsed      or canceled                 |   |           | 72,836  |   |                |   | 6.82   |           |   |   | 83,700 |   |   |   | 12.35 |   |   |   | 4,200 |   |   |   | 11.23 |   |
|                                    |   |           |    |   |                |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Outstanding      at end of year         |   |           | 439,079 |   |                | $      | 6.44   |           |   |   | 589,617 |   |   | $ | 5.96 |   |   |   | 713,624 |   |   | $ | 6.07 |   |
|                                    |   |           |    |   |                |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Options      exercisable at end of year |   |           | 256,404 |   |                | $      | 7.43   |           |   |   | 426,892 |   |   | $ | 5.28 |   |   |   | 605,454 |   |   | $ | 5.61 |   |

| 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 |   |
|                     |   |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $1.00-3.45               |   |   |                     | 15,000  |   |   |   | 0.08 |   |   | $ | 3.45 |   |   |   | 15,000 |   |   |   | 0.08 |   |   | $ | 3.45 |   |
| 3.46-6.94                |   |   |                     | 281,145 |   |   |   | 1.99 |   |   |   | 5.57 |   |   |   | 100,970 |   |   |   | 1.68 |   |   |   | 6.55 |   |
| 6.95-7.54                |   |   |                     | 77,834  |   |   |   | 1.12 |   |   |   | 7.53 |   |   |   | 75,334 |   |   |   | 1.09 |   |   |   | 7.53 |   |
| $7.55-9.58               |   |   |                     | 65,100  |   |   |   | 0.58 |   |   |   | 9.58 |   |   |   | 65,100 |   |   |   | 0.58 |   |   |   | 9.58 |   |
|                     |   |   |                     |    | 439,079 |   |   |   | 1.56 |   |   | $ | 6.44 |   |   |   | 256,404 |   |   |   | 1.13 |   |   | $ | 7.43 |   |

|                                  |   | 2009            |    |   | 2008            |   |    | 2007           |   |
|---------------------------------------|--------|-----------------|---------|--------|-----------------|--------|---------|----------------|--------|
|                                  |   |            |    |   |            |   |    |           |   |
| Expected      life of options granted |   | 2.60      Years |    |   | 2.62      Years |   |    | 2.6      Years |   |
| Risk-free      interest rate          |   |            | 1.09    | %      |            |   | 3.04    | %              |   |   | 4.56 | % |
| Expected      volatility of stock     |   |            | 47      | %      |            |   | 35      | %              |   |   | 33 | % |
| Annual      expected dividend yield   |   |            | 1       | %      |            |   | 1       | %              |   |   | 1 | % |
| Fair      Value of Granted Options    |   | $               | 185,025 |   |            | $      | 174,028 |           |   | $ | 188,073 |   |
| Nonvested      Options                |   |            | 182,675 |   |            |   | 162,725 |           |   |   | 108,170 |   |

----

----

|                           |   |                        |   |   |        |   |   |                   |   |   |                   |   |   | 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, 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,     |   |
|-------------------------------------|--------|--------------------------------------------|--------|
|                                |   | 2009                                       |   |   | 2008 |   |   | 2007 |   |
|                                |   | Net                                        |   |   |   |   |   | Per Share |   |   | Net |   |   |   |   |   | Per Share |   |   | Net |   |   |   |   |   | Per Share |   |
|                                |   | Income                                     |   |   | Shares |   |   | Amount |   |   | Income |   |   | Shares |   |   | Amount |   |   | Income |   |   | Shares |   |   | Amount |   |
|                                |   | (In      Thousands, Except Per Share Data) |   |
| Earnings      per share             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic                               |   | $                                          | 9,635  |   |   |   | 10,391 |   |   | $ | 0.93 |   |   | $ | 4,744 |   |   |   | 10,299 |   |   | $ | 0.46 |   |   | $ | 3,702 |   |   |   | 11,620 |   |   | $ | 0.32 |   |
| Effect      of dilutive securities: |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock      options and warrants     |   |                                       | -      |   |   |   | 42 |   |   |   | - |   |   |   | - |   |   |   | 125 |   |   |   | - |   |   |   | - |   |   |   | 246 |   |   |   | - |   |
| Diluted                             |   |                                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per share     |   | $                                          | 9,635  |   |   |   | 10,433 |   |   | $ | 0.92 |   |   | $ | 4,744 |   |   |   | 10,424 |   |   | $ | 0.46 |   |   | $ | 3,702 |   |   |   | 11,866 |   |   | $ | 0.31 |   |

----

|                                             |   | Year Ended December 31, |   |
|--------------------------------------------------|--------|-------------------------|--------|
|                                             |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                             |   | (In      Thousands)     |   |
|                                             |   |                    |   |   |   |   |   |   |   |
| Advertising      and promotional expense         |   | $                       | 5,552  |   |   | $ | 3,760 |   |   | $ | 3,921 |   |
| Investor      fees                               |   |                    | 1,567  |   |   |   | 889 |   |   |   | 891 |   |
| Legal      fees                                  |   |                    | 63     |   |   |   | 403 |   |   |   | 99 |   |
| Other      settlement fees                       |   |                    | 163    |   |   |   | 146 |   |   |   | 251 |   |
| Management      fees                             |   |                    | 7,152  |   |   |   | 2,380 |   |   |   | 1,560 |   |
| Provision      for losses on mortgage loans sold |   |                    | 5,050  |   |   |   | 2,095 |   |   |   | 1,750 |   |
| Buy      down expense                            |   |                    | 20     |   |   |   | 332 |   |   |   | (119 | ) |
| Business      and franchise tax                  |   |                    | 447    |   |   |   | 406 |   |   |   | 458 |   |
| Accounting      and auditing service             |   |                    | 563    |   |   |   | 623 |   |   |   | 570 |   |
| Consulting      fees                             |   |                    | 346    |   |   |   | 334 |   |   |   | 405 |   |
| Early      payoff and default penalties          |   |                    | 61     |   |   |   | 119 |   |   |   | 331 |   |
| Office      supplies-stationary print            |   |                    | 204    |   |   |   | 175 |   |   |   | 150 |   |
| Telephone                                        |   |                    | 276    |   |   |   | 282 |   |   |   | 331 |   |
| Postage                                          |   |                    | 147    |   |   |   | 157 |   |   |   | 223 |   |
| Credit      reports                              |   |                    | 516    |   |   |   | 238 |   |   |   | 299 |   |
| Other      office expense                        |   |                    | 60     |   |   |   | 95 |   |   |   | 152 |   |
| Other      operating expenses                    |   |                    | 142    |   |   |   | 139 |   |   |   | 179 |   |
| Data      processing                             |   |                    | 497    |   |   |   | 472 |   |   |   | 374 |   |
| Regulatory      examinations                     |   |                    | 166    |   |   |   | 155 |   |   |   | 159 |   |
| FDIC      insurance                              |   |                    | 1,203  |   |   |   | 350 |   |   |   | 51 |   |
| OREO      expenses                               |   |                    | 1,497  |   |   |   | 22 |   |   |   | - |   |
| Other                                            |   |                    | 2,660  |   |   |   | 2,166 |   |   |   | 5,806 |   |
|                                             |   | $                       | 28,352 |   |   | $ | 15,738 |   |   | $ | 17,841 |   |

----

----

|                                              |   | Fair Value Measurementat December 31, 2009 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 (1) |   | $                                                                                                 | 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 (2)                           |   | $                                                                                                 | 7,032   |   |   | $ | - |   |   | $ | - |   |   | $ | 7,032 |   |
| Other      real estate owned (3)                  |   |                                                                                              | 5,111   |   |   |   | - |   |   |   | 5,111 |   |   |   | - |   |
| Total      Financial Assets-Non-Recurring         |   | $                                                                                                 | 12,143  |   |   | $ | -  |   |   | $ | 5,111 |   |   | $ | 7,032 |   |

|   | (1) | Excludes      restricted stock.                                                                                           |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------|
|        | (2) | Represents      the carrying value of loans for which adjustments are based on the      appraised value of thecollateral. |

|  | (3) | Represents      appraised value and realtor comparables less estimated selling      expenses. |
|--|-----|-----------------------------------------------------------------------------------------------|

|                                              |   | Fair Value Measurementat December 31, 2008 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 (1) |   | $                                                                                                 | 85,119  |   |   | $ | 85,119 |   |   | $ | - |   |   | $ | - |   |
| Residential      loans held for sale              |   |                                                                                              | 84,312  |   |   |   | - |   |   |   | 84,312 |   |   |   | - |   |
| Derivative      assets                            |   |                                                                                              | 363     |   |   |   |   |   |   |   |   |   |   |   | 363 |   |
| Total      Financial Assets-Recurring             |   | $                                                                                                 | 119,819 |   |   | $ | 85,119 |   |   | $ | 84,312 |   |   | $ | 363 |   |
|                                              |   |                                                                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Liabilities-Recurring              |   |                                                                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Derivative      liabilities                       |   | $                                                                                                 | 272     |   |   | $ | - |   |   | $ | - |   |   | $ | 272 |   |
| Total      Financial Liabilities-Recurring        |   | $                                                                                                 | 272     |   |   | $ | - |   |   | $ | - |   |   | $ | 272 |   |
|                                              |   |                                                                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Assets-Non-Recurring               |   |                                                                                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Impaired loans (2)                                |   | $                                                                                                 | 2,875   |   |   | $ | - |   |   | $ | - |   |   | $ | 2,875 |   |
| Other real estate owned      (3)                  |   |                                                                                              | 4,455   |   |   |   | - |   |   |   | 4,455 |   |   |   | - |   |
| Total      Financial Assets-Non-Recurring         |   | $                                                                                                 | 7,330   |   |   | $ | - |   |   | $ | 4,455 |   |   | $ | 2,875 |   |

|  | (1) | Excludes      restricted stock. |
|--|-----|---------------------------------|

|  | (2) | Represents      the carrying value of loans for which adjustments are based on the      appraised value of the collateral. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------|

|  | (3) | Represents      appraised value and realtor comparables less estimated selling      expenses. |
|--|-----|-----------------------------------------------------------------------------------------------|

----

|                                                                  |   | Net Derivatives |   |
|-----------------------------------------------------------------------|--------|----------------------|--------|
|                                                                  |   | (In Thousands)  |   |
| Balance      September 30, 2009                                       |   | $                    | (86    | ) |
| Realized      and unrealized gains (losses) included in earnings      |   |                 | 225    |   |
| Unrealized      gains (losses) included in other comprehensive income |   |                 | -      |   |
| Purchases,      settlements, paydowns, and maturities                 |   |                 | -      |   |
| Transfer      into Level 3                                            |   |                 | -      |   |
| Balance      December 31, 2009                                        |   | $                    | 139    |   |

|                                                                  |   | Net Derivatives |   |
|-----------------------------------------------------------------------|--------|----------------------|--------|
|                                                                  |   | (In Thousands)  |   |
| Balance      January 1, 2009                                          |   | $                    | 91     |   |
| Realized      and unrealized gains included in earnings               |   |                 | 48     |   |
| Unrealized      gains (losses) included in other comprehensive income |   |                 | -      |   |
| Purchases,      settlements, paydowns, and maturities                 |   |                 | -      |   |
| Transfer      into Level 3                                            |   |                 | -      |   |
| Balance      December 31, 2009                                        |   | $                    | 139    |   |

|                                                                  |   | Net Derivatives |   |
|-----------------------------------------------------------------------|--------|----------------------|--------|
|                                                                  |   | (In Thousands)  |   |
| Balance      January 1, 2008                                          |   | $                    | (140   | ) |
| Realized      and unrealized gains included in earnings               |   |                 | 231    |   |
| Unrealized      gains (losses) included in other comprehensive income |   |                 | -      |   |
| Purchases,      settlements, paydowns, and maturities                 |   |                 | -      |   |
| Transfer      into Level 3                                            |   |                 | -      |   |
| Balance      December 31, 2008                                        |   | $                    | 91     |   |

----

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

|                                          |   | December 31, 2008 |   |
|-----------------------------------------------|--------|-----------------------------|--------|
| (In Thousands)                           |   | AggregateFair Value         |   |   | Difference |   |   | ContractualPrincipal |   |
| Residential      mortgage loans held for sale |   | $                           | 84,312 |   |   | $ | 2,109 |   |   | $ | 82,203 |   |

----

|                                 |   | December 31,        |    |
|--------------------------------------|--------|---------------------|---------|
|                                 |   | 2009                |    |   | 2008 |   |
|                                 |   | CarryingAmount      |    |   | FairValue |   |   | CarryingAmount |   |   | FairValue |   |
|                                 |   | (In      Thousands) |    |
| Financial      assets:               |   |                |    |   |   |   |   |   |   |   |   |   |
| Cash      and short-term investments |   | $                   | 31,221  |   |   | $ | 31,221 |   |   | $ | 22,482 |   |   | $ | 22,482 |   |
| Securities      available for sale   |   |                | 43,095  |   |   |   | 43,095 |   |   |   | 85,119 |   |   |   | 85,119 |   |
| Restricted      stock                |   |                | 4,743   |   |   |   | 4,743 |   |   |   | 5,896 |   |   |   | 5,896 |   |
| Loans,      net of allowance         |   |                | 553,669 |   |   |   | 552,097 |   |   |   | 562,779 |   |   |   | 562,430 |   |
| Derivatives                          |   |                | 492     |   |   |   | 492 |   |   |   | 363 |   |   |   | 363 |   |
| Total      financial assets          |   | $                   | 633,220 |   |   | $ | 631,648 |   |   | $ | 676,639 |   |   | $ | 676,290 |   |
|                                 |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      liabilities:          |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                             |   | $                   | 466,645 |   |   | $ | 466,668 |   |   | $ | 485,401 |   |   | $ | 486,989 |   |
| Short-term      borrowings           |   |                | 64,249  |   |   |   | 64,258 |   |   |   | 103,575 |   |   |   | 104,083 |   |
| Long-term      borrowings            |   |                | 46,330  |   |   |   | 46,351 |   |   |   | 41,107 |   |   |   | 42,458 |   |
| Subordinated      debentures         |   |                | 6,186   |   |   |   | 6,248 |   |   |   | 6,186 |   |   |   | 6,321 |   |
| Derivatives                          |   |                | 353     |   |   |   | 353 |   |   |   | 272 |   |   |   | 272 |   |
| Total      financial liabilities     |   | $                   | 583,763 |   |   | $ | 583,878 |   |   | $ | 636,541 |   |   | $ | 640,123 |   |

----

----

| 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 |   |

| 2007                                |   | Commercial |    |   | Mortgage |   |   |                |   |   |         |   |   | Consolidated |    |
|-------------------------------------|--------|------------|---------|--------|----------|--------|--------|---------------------|--------|--------|--------------|--------|--------|--------------|---------|
|                                |   | Banking    |    |   | Banking  |   |   | Other               |   |   | Eliminations |   |   | Totals       |    |
|                                |   |       |    |   |     |   |   | (In      Thousands) |   |   |         |   |   |         |    |
| Revenues:                           |   |       |    |   |     |   |   |                |   |   |         |   |   |         |    |
| Interest      income                |   | $          | 45,176  |   |     | $      | 3,594  |                |   | $      | 665          |   |   | $            | (4,009  | ) |   | $ | 45,426 |   |
| Gain      on sale of loans          |   |       | -       |   |     |   | 20,244 |                |   |   | -            |   |   |         | (3      | ) |   |   | 20,241 |   |
| Other                               |   |       | 1,452   |   |     |   | 7,256  |                |   |   | 1,081        |   |   |         | (2,323  | ) |   |   | 7,466 |   |
| Total      operating income         |   |       | 46,628  |   |     |   | 31,094 |                |   |   | 1,746        |   |   |         | (6,335  | ) |   |   | 73,133 |   |
|                                |   |       |    |   |     |   |   |                |   |   |         |   |   |         |    |   |   |   |   |   |
| Expenses:                           |   |       |    |   |     |   |   |                |   |   |         |   |   |         |    |   |   |   |   |   |
| Interest      expense               |   |       | 23,881  |   |     |   | 4,166  |                |   |   | 1,270        |   |   |         | (4,013  | ) |   |   | 25,304 |   |
| Salaries      and employee benefits |   |       | 6,822   |   |     |   | 12,756 |                |   |   | -            |   |   |         | -       |   |   |   | 19,578 |   |
| Other                               |   |       | 6,546   |   |     |   | 16,989 |                |   |   | 1,746        |   |   |         | (2,322  | ) |   |   | 22,959 |   |
| Total      operating expenses       |   |       | 37,249  |   |     |   | 33,911 |                |   |   | 3,016        |   |   |         | (6,335  | ) |   |   | 67,841 |   |
|                                |   |       |    |   |     |   |   |                |   |   |         |   |   |         |    |   |   |   |   |   |
| Income      before income taxes     |   | $          | 9,379   |   |     | $      | (2,817 | )                   |   | $      | (1,270       | )      |   | $            | -       |   |   | $ | 5,292 |   |
|                                |   |       |    |   |     |   |   |                |   |   |         |   |   |         |    |   |   |   |   |   |
| Total      assets                   |   | $          | 599,835 |   |     | $      | 46,184 |                |   | $      | 9,115        |   |   | $            | (32,758 | ) |   | $ | 622,376 |   |
|                                |   |       |    |   |     |   |   |                |   |   |         |   |   |         |    |   |   |   |   |   |
| Capital      expenditures           |   | $          | 554     |   |     | $      | 111    |                |   | $      | 305          |   |   | $            | -       |   |   | $ | 970 |   |

----

|                                            |   | December 31,        |   |
|-------------------------------------------------|--------|---------------------|--------|
|                                            |   | 2009                |   |   | 2008 |   |
|                                            |   | (In      Thousands) |   |
| Assets                                          |   |                |   |   |   |   |
| Cash                                            |   | $                   | 189    |   |   | $ | 10 |   |
| Other      investments                          |   |                | 6,540  |   |   |   | 4,028 |   |
| Investment      in subsidiaries                 |   |                | 66,760 |   |   |   | 59,604 |   |
| Other      assets                               |   |                | 757    |   |   |   | 804 |   |
| Total      assets                               |   | $                   | 74,246 |   |   | $ | 64,446 |   |
|                                            |   |                |   |   |   |   |   |   |
| Liabilities                                     |   |                |   |   |   |   |   |   |
| Subordinated      debentures                    |   | $                   | 6,186  |   |   | $ | 6,186 |   |
| Other      liabilities                          |   |                | 282    |   |   |   | 315 |   |
| Total      liabilities                          |   |                | 6,468  |   |   |   | 6,501 |   |
|                                            |   |                |   |   |   |   |   |   |
| Shareholders'      Equity                       |   |                |   |   |   |   |   |   |
| Common      stock                               |   |                | 8,799  |   |   |   | 8,551 |   |
| Capital      surplus                            |   |                | 18,552 |   |   |   | 17,410 |   |
| Retained      earnings                          |   |                | 40,377 |   |   |   | 31,157 |   |
| Accumulated      other comprehensive income     |   |                | 50     |   |   |   | 827 |   |
| Total      shareholders' equity                 |   |                | 67,778 |   |   |   | 57,945 |   |
| Total      liabilities and shareholders' equity |   | $                   | 74,246 |   |   | $ | 64,446 |   |

----

|                                                                        |   | Year Ended December 31, |   |
|-----------------------------------------------------------------------------|--------|-------------------------|--------|
|                                                                        |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                                                                        |   | (In      Thousands)     |   |
| Income                                                                      |   |                    |   |   |   |   |   |   |   |
| Dividends      from subsidiaries                                            |   | $                       | 2,467  |   |   | $ | 3,203 |   |   | $ | 1,260 |   |
| Interest                                                                    |   |                    | 44     |   |   |   | 72 |   |   |   | 665 |   |
| Other                                                                       |   |                    | 24     |   |   |   | 81 |   |   |   | 46 |   |
|                                                                        |   |                    | 2,535  |   |   |   | 3,356 |   |   |   | 1,971 |   |
| Expenses                                                                    |   |                    |   |   |   |   |   |   |   |   |   |   |
| Interest      expense on subordinated debentures                            |   |                    | 238    |   |   |   | 418 |   |   |   | 807 |   |
| Other      expenses                                                         |   |                    | 1,185  |   |   |   | 1,122 |   |   |   | 1,188 |   |
| Total      expenses                                                         |   |                    | 1,423  |   |   |   | 1,540 |   |   |   | 1,995 |   |
| Income      before income taxes and undistributed income of    subsidiaries |   |                    | 1,112  |   |   |   | 1,816 |   |   |   | (24 | ) |
| Income      tax (benefit)                                                   |   |                    | (466   | ) |   |   | (526 | ) |   |   | (487 | ) |
|                                                                        |   |                    |   |   |   |   |   |   |   |   |   |   |
| Income      before undistributed income of subsidiaries                     |   |                    | 1,578  |   |   |   | 2,342 |   |   |   | 463 |   |
| Undistributed      income of subsidiaries                                   |   |                    | 8,057  |   |   |   | 2,402 |   |   |   | 3,239 |   |
| Net      income                                                             |   | $                       | 9,635  |   |   | $ | 4,744 |   |   | $ | 3,702 |   |

----

|                                                                                                  |   | Year Ended December 31, |         |
|-------------------------------------------------------------------------------------------------------|--------|-------------------------|--------------|
|                                                                                                  |   | 2009                    |         |   | 2008 |   |   | 2007 |   |
|                                                                                                  |   | (In      Thousands)     |         |
| Cash      Flows from Operating Activities                                                             |   |                    |         |   |   |   |   |   |   |
| Net      income                                                                                       |   | $                       | 9,635        |   |   | $ | 4,744 |   |   | $ | 3,702 |   |
| Adjustments      to reconcile net income to net cash provided by (used in) operating      activities: |   |                    |         |   |   |   |   |   |   |   |   |   |
| Undistributed      income of subsidiaries                                                             |   |                    | (8,057       | ) |   |   | (2,402 | ) |   |   | (3,239 | ) |
| (Increase)      decrease in other assets                                                              |   |                    | 172          |   |   |   | (79 | ) |   |   | 147 |   |
| Increase      (decrease) in other liabilities                                                         |   |                    | (33          | ) |   |   | (150 | ) |   |   | 205 |   |
| Stock      based compensation                                                                         |   |                    | 162          |   |   |   | 136 |   |   |   | 99 |   |
| Net      cash provided by operating activities                                                        |   |                    | 1,879        |   |   |   | 2,249 |   |   |   | 914 |   |
|                                                                                                  |   |                    |         |   |   |   |   |   |   |   |   |   |
| Cash      Flows from Investing Activities                                                             |   |                    |         |   |   |   |   |   |   |   |   |   |
| Increase      in investment in subsidiaries                                                           |   |                    | -            |   |   |   | (8,212 | ) |   |   | - |   |
| (Increase)      decrease in other investments                                                         |   |                    | (2,512       | ) |   |   | 11,464 |   |   |   | 12,059 |   |
| Net      cash (used in) provided by investing activities                                              |   |                    | (2,512       | ) |   |   | 3,252 |   |   |   | 12,059 |   |
|                                                                                                  |   |                    |         |   |   |   |   |   |   |   |   |   |
| Cash      Flows from Financing Activities                                                             |   |                    |         |   |   |   |   |   |   |   |   |   |
| Repurchase      of common stock                                                                       |   |                    | 1,400        |   |   |   | (5,930 | ) |   |   | (9,502 | ) |
| Net      proceeds from issuance of common stock                                                       |   |                    | (173         | ) |   |   | 870 |   |   |   | 1,105 |   |
| Repayment of      subordinated debentures                                                        |   |                    | -            |   |   |   | - |   |   |   | (4,125 | ) |
| Dividends      paid                                                                                   |   |                    | (415         | ) |   |   | (433 | ) |   |   | (497 | ) |
| Net      cash provided by (used in) financing activities                                              |   |                    | 812          |   |   |   | (5,493 | ) |   |   | (13,019 | ) |
|                                                                                                  |   |                    |         |   |   |   |   |   |   |   |   |   |
| Increase      in cash and cash equivalents                                                            |   |                    | 179          |   |   |   | 8 |   |   |   | (46 | ) |
|                                                                                                  |   |                    |         |   |   |   |   |   |   |   |   |   |
| Cash      and Cash Equivalents                                                                        |   |                    |         |   |   |   |   |   |   |   |   |   |
| Beginning                                                                                             |   |                    | 10           |   |   |   | 2 |   |   |   | 48 |   |
|                                                                                                  |   |                    |    |   |   |   |    |   |   |   |   |   |
| Ending                                                                                                |   | $                       | 189          |   |   | $ | 10 |   |   | $ | 2 |   |

----

----

----

| 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)                                                                           |

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|                           |   | Access      National Corporation |
|--------------------------------|--------|----------------------------------|
|                           |   | (Registrant)                     |
|                           |   |                             |   |
| Date: March      29,      2010 |   | By:                              | /s/ Michael W. Clarke |
|                           |   |                             |  Michael      W. Clarke |
|                           |   |                             |  President      and Chief Executive Officer |
|                           |   |                             |   |
| Date:      March 29,      2010 |   | By:                              | /s/ Charles Wimer |
|                           |   |                             |  Charles      Wimer |
|                           |   |                             |  Executive      Vice President and Chief FinancialOfficer |

----

| Signature                               |   | Title                                                                                                                           |   | Date                |
|-----------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|
|                                    |   |                                                                                                                            |   |                |
| /s/ Michael W. Clarke                   |   |                                                                                                                            |   |                |
| Michael      W. Clarke                  |   | Chairman,      President, Chief Executive Officer & Director(Principal      Executive Officer)                              |   | March      29, 2010 |
|                                    |   |                                                                                                                            |   |                |
| /s/Martin S. Friedman                   |   |                                                                                                                            |   | March      29,2010  |
| Martin      S. Friedman                 |   | Director                                                                                                                        |   |                |
|                                    |   |                                                                                                                            |   |                |
| /s/ John W.      Edgemond  IV |   |                                                                                                                            |   |                |
| John      W. Edgemond IV                |   | Director                                                                                                                        |   | March      29, 2010 |
|                                    |   |                                                                                                                            |   |                |
| /s/  James L.    Jadlos       |   |                                                                                                                            |   |                |
| James      L. Jadlos                    |   | Director                                                                                                                        |   | March      29, 2010 |
|                                    |   |                                                                                                                            |   |                |
|                                    |   |                                                                                                                            |   |                |
| /s/ Thomas M. Kody                      |   |                                                                                                                            |   |                |
| Thomas      M. Kody                     |   | Director                                                                                                                        |   | March      29, 2010 |
|                                    |   |                                                                                                                            |   |                |
|                                    |   |                                                                                                                            |   |                |
| /s/ Robert C. Shoemaker                 |   |                                                                                                                            |   |                |
| Robert      C. Shoemaker                |   | Director                                                                                                                        |   | March      29, 2010 |
|                                    |   |                                                                                                                            |   |                |
| /s/ Charles Wimer                       |   |                                                                                                                            |   |                |
| Charles      Wimer                      |   | Executive      Vice President and Chief FinancialOfficer(Principal      Financial Officer and PrincipalAccounting      Officer) |   | March      29, 2010 |

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