##### Table of Contents





UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the Quarterly Period Ended June 30, 2009



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

For the Transition Period from  to

Commission
file number 000-53655

TOUCHMARK BANCSHARES, INC.

(Exact name of registrant as specified in its charter)



|                                              |  |                                    
|--------------------------------------------- |  | -----------------------------------
|Georgia                                       |  | 20-8746061                         
|(State or other jurisdictionof incorporation) |  | (I.R.S. EmployerIdentification No.)

3740 Davinci Court, Suite 150

Norcross, Georgia 30092

(Address of principal executive offices)

(770) 407-6700

(Registrants telephone number)





Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days.    x  YES     ̈  NO

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      ̈  YES     ̈  NO

Indicate by check mark whether the
registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and smaller reporting
company in Rule 12b-2 of the Exchange Act.



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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act).     ̈  YES    x  NO

Indicate the number of shares outstanding of each of the registrants classes of common equity, as of the latest practicable date: 3,470,391 shares of common stock, par value $.01 per share, outstanding as of August 10, 2009.









---

##### Table of Contents

INDEX



|                              |  |                |  |                                                                                                                                   |  |     
|----------------------------- |  | -------------- |  | --------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                              |  |                |  |                                                                                                                                   |  | Page
|Part I. Financial Information |  |               
|                              |  |                | 
|                              |  | Item 1.        |  | Financial Statements (unaudited)                                                                                                  |  |     
|                              |  |                | 
|                              |  |                |  | Condensed Consolidated Balance Sheets as of June 30, 2009 and December 31, 2008                                                   |  | 2   
|                              |  |                | 
|                              |  |                |  | Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 
30, 2009 and 2008 |  | 3   
|                              |  |                | 
|                              |  |                |  | Condensed Consolidated Statements of Cash Flows For The Six Months Ended June 30, 2009 and
2008                                   |  | 4   
|                              |  |                | 
|                              |  |                |  | Notes to Condensed Consolidated Financial Statements                                                                              |  | 5   
|                              |  |                | 
|                              |  | Item 2.        |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                             |  | 15  
|                              |  |                | 
|                              |  | Item 3.        |  | Quantitative and Qualitative Disclosures About Market Risk                                                                        |  | 23  
|                              |  |                | 
|                              |  | Item 4.        |  | Controls and Procedures                                                                                                           |  | 24  
|                              | 
|Part II. Other Information    |  |               
|                              |  |                | 
|                              |  | Item 1.        |  | Legal Proceedings                                                                                                                 |  | 24  
|                              |  |                | 
|                              |  | Item 4.        |  | Submission of Matters to a Vote of Security Holders                                                                               |  | 24  
|                              |  |                | 
|                              |  | Item 6.        |  | Exhibits                                                                                                                          |  | 26  
|                              |  |                | 
|                              |  | Signatures     |  |                                                                                                                                   |  | 27  
|                              |  |                | 
|                              |  | Certifications |  |                                                                                                                                   |  |     



---

##### Table of Contents

PART I  FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

TOUCHMARK BANCSHARES, INC.

AND SUBSIDIARY

Condensed Consolidated Balance Sheets

June 30, 2009 and December 31, 2008

(Unaudited)



|                                                                                              |  |              |            |   |                  |   |            |  
|--------------------------------------------------------------------------------------------- |  | ------------ | ---------- | - | ---------------- | - | ---------- | -
|                                                                                              |  | June 30,2009 |            |   | December 31,2008 |  
|ASSETS                                                                                        |  |              |            |   |                  |   |            |  
|Cash and due from banks                                                                       |  | $            | 2,541,363  |   |                  | $ | 1,029,163  |  
|Federal funds sold                                                                            |  |              | 250,000    |   |                  |   | 1,297,000  |  
|Interest-bearing accounts with other banks                                                    |  |              | 4,168,132  |   |                  |   | 4,073,041  |  
|Investment securities:                                                                        |  |              |            |   |                  |   |            |  
|Securities available for sale                                                                 |  |              | 23,817,270 |   |                  |   | 24,978,686 |  
|Securities held to maturity, fair value approximates $9,791,622, and $2,485,527, respectively |  |              | 9,372,472  |   |                  |   | 2,472,490  |  
|Restricted stock                                                                              |  |              | 1,399,050  |   |                  |   | 1,329,550  |  
|Loans, less allowance for loan losses of $1,105,340, and $401,890, respectively               |  |              | 46,981,242 |   |                  |   | 31,553,475 |  
|Accrued interest receivable                                                                   |  |              | 425,873    |   |                  |   | 430,972    |  
|Premises and equipment                                                                        |  |              | 5,478,661  |   |                  |   | 3,873,011  |  
|Other assets                                                                                  |  |              | 191,093    |   |                  |   | 165,162    |  
|                                                                                              |  |              |            |   |                  |   |            |  
|Total assets                                                                                  |  | $            | 94,625,156 |   |                  | $ | 71,202,550 |  
|                                                                                              |  |              |            |   |                  |   |            |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                          |  |              |            |   |                  |   |            |  
|Liabilities:                                                                                  |  |              |            |   |                  |   |            |  
|Deposits:                                                                                     |  |              |            |   |                  |   |            |  
|Non-interest bearing demand                                                                   |  | $            | 3,960,644  |   |                  | $ | 1,792,137  |  
|Interest-bearing                                                                              |  |              | 48,884,655 |   |                  |   | 25,984,513 |  
|                                                                                              |  |              |            |   |                  |   |            |  
|Total deposits                                                                                |  |              | 52,845,299 |   |                  |   | 27,776,650 |  
|Accrued interest payable                                                                      |  |              | 46,106     |   |                  |   | 28,998     |  
|Federal Home Loan Bank advances                                                               |  |              | 11,400,000 |   |                  |   | 11,400,000 |  
|Other liabilities                                                                             |  |              | 259,761    |   |                  |   | 513,033    |  
|                                                                                              |  |              |            |   |                  |   |            |  
|Total liabilities                                                                             |  |              | 64,551,166 |   |                  |   | 39,718,681 |  
|                                                                                              |  |              |            |   |                  |   |            |  
|Shareholders Equity                                                                          |  |              |            |   |                  |   |            |  
|Preferred stock, no par value, 10,000,000 shares authorized, none issued                      |  |              |           |   |                  |   |           |  
|Common stock, $.01 par value, 50,000,000 shares authorized, 3,470,391 issued and outstanding  |  |              | 34,704     |   |                  |   | 34,704     |  
|Paid in capital                                                                               |  |              | 35,771,624 |   |                  |   | 35,683,412 |  
|Accumulated deficit                                                                           |  |              | (5,852,488 | ) |                  |   | (4,551,428 | )
|Accumulated other comprehensive income                                                        |  |              | 120,150    |   |                  |   | 317,181    |  
|                                                                                              |  |              |            |   |                  |   |            |  
|Total shareholders equity                                                                    |  |              | 30,073,990 |   |                  |   | 31,483,869 |  
|                                                                                              |  |              |            |   |                  |   |            |  
|Total liabilities and shareholders equity                                                    |  | $            | 94,625,156 |   |                  | $ | 71,202,550 |  
|                                                                                              |  |              |            |   |                  |   |            |  



2



---

##### Table of Contents

TOUCHMARK BANCSHARES, INC.

AND SUBSIDIARY

Condensed
Consolidated Statements of Operations and Comprehensive Loss

Three and Six Months Ended June 30, 2009 and 2008

(Unaudited)



|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|--------------------------------------------------------- |  | ------------------------------ | ---------- | - | ------------------------------ | - | ---------- | ---------------------------- |  | - | ---------------------------- | - |  | - | ---------- | -
|                                                          |  | Three MonthsEndedJune 30, 2009 |            |   | Three MonthsEndedJune 30, 2008 |   |            | Six MonthsEndedJune 30, 2009 |  |   | Six MonthsEndedJune 30, 2008 |  
|Interest income:                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Loans, including fees                                     |  | $                              | 593,876    |   |                                | $ | 73,452     |                              |  | $ | 1,123,941                    |   |  | $ | 78,056     |  
|Investment income                                         |  |                                | 439,336    |   |                                |   | 311,023    |                              |  |   | 852,090                      |   |  |   | 618,024    |  
|Federal funds sold                                        |  |                                | 43         |   |                                |   | 22,745     |                              |  |   | 1,023                        |   |  |   | 112,673    |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|                                                          |  |                                | 1,033,255  |   |                                |   | 407,220    |                              |  |   | 1,977,054                    |   |  |   | 808,753    |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Interest expense:                                         |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Deposits                                                  |  |                                | 304,237    |   |                                |   | 17,200     |                              |  |   | 614,712                      |   |  |   | 18,546     |  
|Federal Home Loan Bank advances                           |  |                                | 69,939     |   |                                |   | 22,483     |                              |  |   | 139,801                      |   |  |   | 24,929     |  
|Other borrowings                                          |  |                                | 243        |   |                                |   |           |                              |  |   | 492                          |   |  |   |           |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|                                                          |  |                                | 374,419    |   |                                |   | 39,683     |                              |  |   | 755,005                      |   |  |   | 43,475     |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net interest income                                       |  |                                | 658,836    |   |                                |   | 367,537    |                              |  |   | 1,222,049                    |   |  |   | 765,278    |  
|Provision for loan losses                                 |  |                                | 600,185    |   |                                |   | 108,395    |                              |  |   | 703,450                      |   |  |   | 125,300    |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net interest income after provision for loan losses       |  |                                | 58,651     |   |                                |   | 259,142    |                              |  |   | 518,599                      |   |  |   | 639,978    |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Noninterest income:                                       |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Service charges on deposit accounts and other fees        |  |                                | 7,278      |   |                                |   | 59         |                              |  |   | 11,137                       |   |  |   | 59         |  
|Gain on sale of securities available for sale             |  |                                | 331,773    |   |                                |   |           |                              |  |   | 461,417                      |   |  |   |           |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|                                                          |  |                                | 339,051    |   |                                |   | 59         |                              |  |   | 472,554                      |   |  |   | 59         |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Noninterest expense:                                      |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Salaries and employee benefits                            |  |                                | 677,310    |   |                                |   | 534,050    |                              |  |   | 1,366,582                    |   |  |   | 2,213,862  |  
|Occupancy and equipment                                   |  |                                | 156,253    |   |                                |   | 60,948     |                              |  |   | 307,806                      |   |  |   | 112,106    |  
|Other operating expense                                   |  |                                | 325,894    |   |                                |   | 252,987    |                              |  |   | 617,825                      |   |  |   | 417,674    |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|                                                          |  |                                | 1,159,457  |   |                                |   | 847,985    |                              |  |   | 2,292,213                    |   |  |   | 2,743,642  |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Net loss                                                  |  | $                              | (761,755   | ) |                                | $ | (588,784   | )                            |  | $ | (1,301,060                   | ) |  | $ | (2,103,605 | )
|Other comprehensive loss:                                 |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Unrealized holding losses arising during the period       |  |                                | (285,223   | ) |                                |   | (727,652   | )                            |  |   | 167,341                      |   |  |   | (532,197   | )
|Reclassification adjustment for gain realized in net loss |  |                                | (331,773   | ) |                                |   |           |                              |  |   | (461,417                     | ) |  |   |           |  
|Tax effect                                                |  |                                | 203,608    |   |                                |   | 240,125    |                              |  |   | 97,045                       |   |  |   | 175,625    |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Other comprehensive loss:                                 |  |                                | (413,388   | ) |                                |   | (487,527   | )                            |  |   | (197,031                     | ) |  |   | (356,572   | )
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Comprehensive loss                                        |  | $                              | (1,175,143 | ) |                                | $ | (1,076,311 | )                            |  | $ | (1,498,091                   | ) |  | $ | (2,460,177 | )
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Basic loss per share                                      |  | $                              | (0.22      | ) |                                | $ | (0.17      | )                            |  | $ | (0.37                        | ) |  | $ | (0.73      | )
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  
|Dividends per share                                       |  | $                              |           |   |                                | $ |           |                              |  | $ |                             |   |  | $ |           |  
|                                                          |  |                                |            |   |                                |   |            |                              |  |   |                              |   |  |   |            |  



3



---

##### Table of Contents

Condensed Consolidated Statement of Cash Flows

Six Months Ended June 30, 2009 and 2008

(Unaudited)



|                                                                           |  |                              |             |   |                              |   |             |  
|-------------------------------------------------------------------------- |  | ---------------------------- | ----------- | - | ---------------------------- | - | ----------- | -
|                                                                           |  | Six MonthsEndedJune 30, 2009 |             |   | Six MonthsEndedJune 30, 2008 |  
|Cash flow from operating activities:                                       |  |                              |             |   |                              |   |             |  
|Net loss                                                                   |  | $                            | (1,301,060  | ) |                              | $ | (2,103,605  | )
|Adjustments to reconcile net loss to net cash used by operating activities |  |                              |             |   |                              |   |             |  
|Depreciation                                                               |  |                              | 114,270     |   |                              |   | 54,417      |  
|Amortization of premium                                                    |  |                              | 9,889       |   |                              |   | (310        | )
|Provision for loan losses                                                  |  |                              | 703,450     |   |                              |   | 125,300     |  
|Gain on sale of securities available for sale                              |  |                              | (461,417    | ) |                              |   |            |  
|Stock compensation expense                                                 |  |                              | 88,212      |   |                              |   | 1,398,183   |  
|Decrease (increase) in interest receivable                                 |  |                              | 5,099       |   |                              |   | (333,950    | )
|Increase in interest payable                                               |  |                              | 17,108      |   |                              |   | 8,389       |  
|Decrease in deferred stock issuance costs                                  |  |                              |            |   |                              |   | 186,204     |  
|Increase in other assets                                                   |  |                              | (25,930     | ) |                              |   | (81,239     | )
|Decrease in other liabilities                                              |  |                              | (156,228    | ) |                              |   | (130,935    | )
|                                                                           |  |                              |             |   |                              |   |             |  
|Net cash used by operating activities                                      |  |                              | (1,006,607  | ) |                              |   | (877,546    | )
|                                                                           |  |                              |             |   |                              |   |             |  
|Cash flow from investing activities:                                       |  |                              |             |   |                              |   |             |  
|Sales (purchase) of federal funds sold                                     |  |                              | 1,047,000   |   |                              |   | (3,221,000  | )
|Increase in interest bearing deposits                                      |  |                              | (95,091     | ) |                              |   | (3,381,341  | )
|Purchase of securities held to maturity                                    |  |                              | (7,351,444  | ) |                              |   |            |  
|Purchase of securities available for sale                                  |  |                              | (15,778,215 | ) |                              |   | (23,486,485 | )
|Proceeds from maturities of securities held to maturity                    |  |                              | 500,000     |   |                              |   |            |  
|Proceeds from paydowns of securities available for sale                    |  |                              | 2,922,430   |   |                              |   | 260,468     |  
|Proceeds from sales of securities available for sale                       |  |                              | 14,126,115  |   |                              |   |            |  
|Purchase of restricted stock                                               |  |                              | (69,500     | ) |                              |   | (1,103,950  | )
|Net increase in loans                                                      |  |                              | (16,131,217 | ) |                              |   | (9,988,416  | )
|Purchase of premises and equipment                                         |  |                              | (1,719,920  | ) |                              |   | (629,570    | )
|                                                                           |  |                              |             |   |                              |   |             |  
|Net cash used by investing activities                                      |  |                              | (22,549,842 | ) |                              |   | (41,550,294 | )
|                                                                           |  |                              |             |   |                              |   |             |  
|Cash flow from financing activities:                                       |  |                              |             |   |                              |   |             |  
|Net increase in deposits                                                   |  |                              | 25,068,649  |   |                              |   | 6,551,921   |  
|Organizer repayments                                                       |  |                              |            |   |                              |   | (980,000    | )
|Repayment of line of credit                                                |  |                              |            |   |                              |   | (575,000    | )
|Repayment of note payable                                                  |  |                              |            |   |                              |   | (2,450,000  | )
|Proceeds from Federal Home Loan Bank advances                              |  |                              |            |   |                              |   | 5,900,000   |  
|Stock issuance costs                                                       |  |                              |            |   |                              |   | (512,367    | )
|Proceeds from sale of common stock                                         |  |                              |            |   |                              |   | 34,703,910  |  
|                                                                           |  |                              |             |   |                              |   |             |  
|Net cash provided by financing activities                                  |  |                              | 25,068,649  |   |                              |   | 42,638,464  |  
|                                                                           |  |                              |             |   |                              |   |             |  
|Net change in cash                                                         |  |                              | 1,512,200   |   |                              |   | 210,624     |  
|Cash at the beginning of the period                                        |  |                              | 1,029,163   |   |                              |   |            |  
|                                                                           |  |                              |             |   |                              |   |             |  
|Cash at the end of the period                                              |  | $                            | 2,541,363   |   |                              | $ | 210,624     |  
|                                                                           |  |                              |             |   |                              |   |             |  
|Supplemental disclosures of cash flow information -                        |  |                              |             |   |                              |   |             |  
|Interest paid                                                              |  | $                            | 737,895     |   |                              | $ | 35,086      |  
|                                                                           |  |                              |             |   |                              |   |             |  



4



---

##### Table of Contents

TOUCHMARK BANCSHARES, INC.

AND SUBSIDIARY

Notes to Condensed
Consolidated Financial Statements

June 30, 2009

(unaudited)



|1. | BASIS OF PRESENTATION
|-- | ---------------------

The consolidated financial
information included for Touchmark Bancshares, Inc. herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement
of results for the interim periods. These statements should be read in conjunction with the financial statements and related notes included in the Companys Annual Report on Form 10-K for the year ended December 31, 2008. The following
unaudited condensed financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and note disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or omitted pursuant to those rules and regulations, although the company believes that the disclosures made are adequate to make the information not misleading.

The results of operations for the three and six month periods ended June 30, 2009 are not necessarily indicative of the results to be expected for
the full year.



|2. | ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|-- | -----------------------------------------------------------

Touchmark Bancshares, Inc. (the Company), a Georgia corporation, was established on April 3, 2007 for the purpose of organizing and managing Touchmark National Bank (the Bank). Concurrent with the formation of
Touchmark Bancshares, Inc. (formerly known as Touchstone Bancshares, Inc.), Touchmark Bancshares, Inc. acquired certain assets and assumed certain liabilities of Formosa Rose, LLC. The Company is a one-bank holding company with respect to its
subsidiary, Touchmark National Bank. The Bank is a national bank, which began operations on January 28, 2008, headquartered in Gwinnett County, Georgia with the purpose of being a community bank in Gwinnett County, Georgia and surrounding
areas.

To capitalize the Bank, the Company offered a minimum of 3,125,000 shares and a maximum of 4,156,250 shares of common stock of the
Company at $10 per share. The Company was required to sell the minimum number of shares in order to meet regulatory conditions for final approval of its charter. The organizers, directors and executive officers of the Company purchased 1,238,433
shares of common stock, at $10 per share, in the offering. The Company completed the stock offering in March 2008. The Company issued 3,470,391 shares for a total of $34,703,910. Offering expenses of $512,367 were netted against these gross
proceeds. Additionally, the Company initially capitalized the Bank with $26,000,000 of the proceeds from the stock offering.

Basis of
Accounting:The accounting and reporting policies of the Company conform to accounting principles generally accepted in the United States of America. In preparing the financial statements, management is required to make estimates and assumptions
that affect the reported amounts of assets, liabilities, shareholders equity and net income (loss). Actual results may differ significantly from those estimates. The Company uses the accrual basis of accounting by recognizing revenues when
they are earned and expenses in the period incurred, without regard to the time of receipt or payment of cash.

Allowance for Loan
Losses: Arriving at an appropriate level of allowance for loan losses involves a high degree of judgment. The Companys allowance for loan losses provides for probable losses based upon evaluations of known and inherent risks in the loan
portfolio. Due to our limited operating history, the loans in our loan portfolio and our lending relationships are of very recent origin. In general, loans do not begin to show signs of credit deterioration or default until they have been
outstanding for some period of time, a process known as seasoning. As a result, a portfolio of older loans will usually behave more predictably than a newer portfolio. Because our loan portfolio is new, the current level of delinquencies and
defaults may not be representative of the level that will prevail over time.



5



---

##### Table of Contents

The process of reviewing the adequacy of the allowance for loan losses requires management to make
numerous judgments and assumptions about future events and subjective judgments, including the likelihood of loan repayment, risk evaluation, extrapolation of historical losses of similar banks, and similar judgments and assumptions. If these
assumptions prove to be incorrect, charge-offs in future periods could exceed the allowance for loan losses. The increase made during the second quarter was an outcome of our allowance review process.

Premises and Equipment:Leasehold improvements, furniture and equipment are stated at cost, net of accumulated depreciation. Land is carried at
cost. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Maintenance and repairs are charged to operations, while major improvements are capitalized. Upon retirement, sale or other
disposition of premises and equipment, the cost and accumulated depreciation are eliminated from the accounts and gain or loss is included in operations. The Company had no capitalized lease obligations at June 30, 2009 or December 31,
2008.

Stock Based Compensation: The Company has adopted the fair value recognition provisions of FASB Statement No. 123(R),
Share-Based Payment. Upon issuance of the Director and Organizer warrants, compensation cost was recognized in the consolidated financial statements of the Company for all share-based payments granted, based on the grant date fair value as
estimated in accordance with the provisions of Statement 123(R). Statement 123(R) requires recognition of expense equal to the fair value of the warrant over the vesting period of the warrant.

The fair value of each warrant grant is estimated on the date of grant using the Black-Scholes option-pricing model with the assumptions listed in the
table below. Expected volatility for the period has been determined by a combination of a calculated value based on expected volatility of similar entities, and on the historical volatility of the Companys stock. The expected term of
warrants granted is based on the short-cut method and represents the period of time that the warrants granted are expected to be outstanding. Expected dividends are based on dividend trends and the market price of the Companys stock at
grant. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of grant.



|                                                |  |                           |           |  
|----------------------------------------------- |  | ------------------------- | --------- | -
|                                                |  | Period EndedJune 30, 2008 |          
|Risk-free interest rate                         |  |                           | 2.74-3.10 | %
|Expected life (years)                           |  |                           | 5.00-6.50 |  
|Expected volatility                             |  |                           | 28.25     | %
|Expected dividends                              |  |                           | 0.00      | %
|Weighted average fair value of warrants granted |  | $                         | 3.04      |  

The Company recorded compensation expense related to the warrants of $8,900 and $8,900 for the
three months ended June 30, 2009 and 2008, respectively. The Company recorded compensation expense related to the warrants of $17,800 and $1,346,758 for the six months ended June 30, 2009 and 2008, respectively. Warrant expense recognized
in the period ended June 30, 2008 includes warrants that fully vested at the time Touchmark National Bank received its charter and opened for business.

At June 30, 2009, there was $56,367 of unrecognized compensation cost related to warrants, which is expected to be recognized over a weighted-average period of 1.5 years. The weighted average remaining
contractual life of the warrants outstanding as of June 30, 2009 was approximately 8.6 years. The Company had 452,500 warrants exercisable as of June 30, 2009.

During 2008 the Company issued 109,322 options to purchase common stock to employees of the Company or the Bank and the Company issued 10,000 options to purchase common stock to a new director. Upon issuance of
options, compensation cost was recognized in the consolidated financial statements of the Company for all options granted, based on the grant date fair value as estimated in accordance with the provisions of Statement 123(R). Statement 123(R)
requires recognition of expense equal to the fair value of the option over the vesting period of the option.

The fair value of each option
grant is estimated on the date of grant using the Black-Scholes option-pricing model with the assumptions listed in the table below. Expected volatility for the period has been determined by a combination of a calculated value based on expected
volatility of similar entities, and on the historical volatility of the Companys stock. The expected term of options granted is based on the short-cut method and represents the period of time that the options granted are expected to be
outstanding. Expected dividends are based on dividend



6



---

##### Table of Contents

trends and the market price of the Companys stock price at grant. The risk-free rate for periods within the contractual life of the option is
based on the U.S. Treasury yield curve in effect at the time of grant.



|                                               |  |                                              |             |  
|---------------------------------------------- |  | -------------------------------------------- | ----------- | -
|                                               |  | For Options IssuesYear EndedDecember 31,2008 |            
|Risk-free interest rate                        |  |                                              | 2.93-3.80   | %
|Expected life (years)                          |  |                                              | 6.50        |  
|Expected volatility                            |  |                                              | 29.65-38.41 | %
|Expected dividends                             |  |                                              | 0.00        | %
|Expected Forfeiture rate                       |  |                                              | 5.00        | %
|Weighted average fair value of options granted |  | $                                            | 3.73        |  

The Company recorded stock-based compensation expense related to the options of $35,205 and
$51,425 during the three months ended June 30, 2009 and 2008, respectively. The Company recorded stock-based compensation expense related to the options of $70,410 and $51,425 during the six months ended June 30, 2009 and 2008,
respectively.

At June 30, 2009, there was $233,077 of unrecognized compensation cost related to options outstanding, which is expected
to be recognized over a weighted-average period of 1.6 years. The weighted average remaining contractual life of the options outstanding as of June 30, 2009 was approximately 8.6 years. The Company had 35,941 options exercisable as of
June 30, 2009.

Income Taxes:Deferred income tax assets and liabilities are determined using the liability (or balance sheet)
method. Under this method, the net deferred tax asset or liability is determined based on the tax effects of the differences between the book and tax bases of the various balance sheet assets and liabilities, and gives current recognition to changes
in tax rates and laws.

A valuation allowance for deferred tax assets is required when it is more likely than not that some portion or all
of the deferred tax asset will not be realized. In assessing the realization of the deferred tax assets, management considers the scheduled reversals of deferred tax liabilities, projected future taxable income (in the near-term based on current
projections), and tax planning strategies.

The following summarizes the components of deferred taxes at June 30, 2009 and
December 31, 2008.



|                                          |  |               |            |   |                   |   |            |  
|----------------------------------------- |  | ------------- | ---------- | - | ----------------- | - | ---------- | -
|                                          |  | June 30, 2009 |            |   | December 31, 2008 |  
|Deferred income tax assets (liabilities): |  |               |            |   |                   |   |            |  
|Allowance for loan losses                 |  | $             | 382,980    |   |                   | $ | 120,362    |  
|Pre-opening expenses                     |  |               | 468,233    |   |                   |   | 485,467    |  
|Net operating loss carry-forward          |  |               | 909,312    |   |                   |   | 677,691    |  
|Depreciation                              |  |               | (166,557   | ) |                   |   | (183,825   | )
|Stock options                             |  |               | 488,413    |   |                   |   | 488,413    |  
|Securities available for sale             |  |               | (59,179    | ) |                   |   | (156,224   | )
|Other                                     |  |               | 68,368     |   |                   |   | 53,818     |  
|                                          |  |               |            |   |                   |   |            |  
|                                          |  |               | 2,091,570  |   |                   |   | 1,485,702  |  
|Less valuation allowance                  |  |               | (2,032,391 | ) |                   |   | (1,641,926 | )
|                                          |  |               |            |   |                   |   |            |  
|Deferred tax asset, net                   |  | $             | (59,179    | ) |                   | $ | (156,224   | )
|                                          |  |               |            |   |                   |   |            |  

Statement of Cash Flows:The statement of cash flows was prepared using the indirect method.
Under this method, net loss was reconciled to net cash flows used by operating activities by adjusting for the effects of operating activities.



7



---

##### Table of Contents

Cash and Cash Equivalents:For purposes of presentation in the statement of cash flows, cash and
cash equivalents are defined as those amounts included in the balance sheet caption cash and due from banks. Cash flows from deposits, federal funds purchased and sold, and originations, renewals and extensions of loans are reported net.



|3. | SECURITIES
|-- | ----------

The amortized cost, gross unrealized
gains and losses, and estimated fair value of securities at June 30, 2009, are summarized as follows:



|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|----------------------------- |  | ------------- | ---------- | -------------------- | - | --------------------- |  | - | ------------------ | - |  | - | ----------
|                              |  | AmortizedCost |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFairValue
|Available for Sale Securities |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|Corporate bonds               |  | $             | 2,478,024  |                      | $ |                      |  | $ | (150,382           | ) |  | $ | 2,327,642 
|Mortgage-backed securities    |  |               | 21,159,917 |                      |   | 347,664               |  |   | (17,953            | ) |  |   | 21,489,628
|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|                              |  | $             | 23,637,941 |                      | $ | 347,664               |  | $ | (168,335           | ) |  | $ | 23,817,270
|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|Held to Maturity Securities   |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|Corporate bonds               |  | $             | 9,372,472  |                      | $ | 453,093               |  | $ | (33,943            | ) |  | $ | 9,791,622 
|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           

The amortized cost, gross unrealized gains and losses, and estimated fair value of securities at
December 31, 2008, are summarized as follows:



|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|----------------------------- |  | ------------- | ---------- | -------------------- | - | --------------------- |  | - | ------------------ | - |  | - | ----------
|                              |  | AmortizedCost |            | GrossUnrealizedGains |   | GrossUnrealizedLosses |  |   | EstimatedFairValue
|Available for Sale Securities |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|U.S. government agencies      |  | $             | 8,939,435  |                      | $ | 194,805               |  | $ |                   |   |  | $ | 9,134,240 
|Corporate bonds               |  |               | 2,477,319  |                      |   | 144,531               |  |   |                   |   |  |   | 2,621,850 
|Mortgage-backed securities    |  |               | 13,088,527 |                      |   | 142,723               |  |   | (8,654             | ) |  |   | 13,222,596
|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|                              |  | $             | 24,505,281 |                      | $ | 482,059               |  | $ | (8,654             | ) |  | $ | 24,978,686
|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|Held to Maturity Securities   |  |               |            |                      |   |                       |  |   |                    |   |  |   |           
|Corporate bonds               |  | $             | 2,472,490  |                      | $ | 24,115                |  | $ | (11,078            | ) |  | $ | 2,485,527 
|                              |  |               |            |                      |   |                       |  |   |                    |   |  |   |           

The amortized cost and estimated fair value of investment securities available for sale and held
to maturity at June 30, 2009, by contractual maturity are shown below. Expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.



|                                             |  |                              |            |                            |   |               |  |                    |           |  |   |          
|-------------------------------------------- |  | ---------------------------- | ---------- | -------------------------- | - | ------------- |  | ------------------ | --------- |  | - | ---------
|                                             |  | Securities AvailableFor Sale |            | Securities HeldTo Maturity
|                                             |  | AmortizedCost                |            | EstimatedFairValue         |   | AmortizedCost |  | EstimatedFairValue
|Due in one year or less                      |  | $                            |           |                            | $ |              |  | $                  | 3,342,452 |  | $ | 3,401,137
|Due after one year but less than five years  |  |                              |           |                            |   |              |  |                    | 6,030,020 |  |   | 6,390,485
|Due after five years but less than ten years |  |                              | 3,961,117  |                            |   | 3,853,439     |  |                    |          |  |   |         
|Due after ten years                          |  |                              | 19,676,824 |                            |   | 19,963,831    |  |                    |          |  |   |         
|                                             |  |                              |            |                            |   |               |  |                    |           |  |   |          
|                                             |  | $                            | 23,637,941 |                            | $ | 23,817,270    |  | $                  | 9,372,472 |  | $ | 9,791,622
|                                             |  |                              |            |                            |   |               |  |                    |           |  |   |          

For the purpose of the maturity table, mortgage-backed securities, which are not due at a single
maturity date, have been allocated over maturity groupings based on the weighted-average contractual maturities of underlying collateral. The mortgage-backed securities may mature earlier than their weighted-average contractual maturities because of
principal prepayments.



8



---

##### Table of Contents

Information pertaining to securities with gross unrealized losses at June 30, 2009 aggregated by
investment category and length of time that individual securities have been in a continuous loss position, follows:



|                           |  |                        |         |                        |                    |   |                       |  |   |                    |   |  |   |          
|-------------------------- |  | ---------------------- | ------- | ---------------------- | ------------------ | - | --------------------- |  | - | ------------------ | - |  | - | ---------
|                           |  | Less thanTwelve Months |         | More thanTwelve Months
|                           |  | GrossUnrealizedLosses  |         |                        | EstimatedFairValue |   | GrossUnrealizedLosses |  |   | EstimatedFairValue
|Mortgage-backed securities |  | $                      | (17,953 | )                      |                    | $ | 3,559,747             |  | $ |                   |   |  | $ |         
|Corporate bonds            |  |                        |        |                        |                    |   |                      |  |   | (150,382           | ) |  |   | 1,877,600
|                           |  |                        |         |                        |                    |   |                       |  |   |                    |   |  |   |          
|                           |  | $                      | (17,953 | )                      |                    | $ | 3,559,747             |  | $ | (150,382           | ) |  | $ | 1,877,600
|                           |  |                        |         |                        |                    |   |                       |  |   |                    |   |  |   |          

Information pertaining to securities with gross unrealized losses at December 31, 2008
aggregated by investment category and length of time that individual securities have been in a continuous loss position, follows:



|                                  |  |                        |         |                        |                    |   |                       |  |                    |   |  |   |  
|--------------------------------- |  | ---------------------- | ------- | ---------------------- | ------------------ | - | --------------------- |  | ------------------ | - |  | - | -
|                                  |  | Less thanTwelve Months |         | More thanTwelve Months
|                                  |  | GrossUnrealizedLosses  |         |                        | EstimatedFairValue |   | GrossUnrealizedLosses |  | EstimatedFairValue
|U.S. Government agency securities |  | $                      |        |                        |                    | $ |                      |  | $                  |  |  | $ | 
|Mortgage-backed securities        |  |                        | (8,654  | )                      |                    |   | 1,008,814             |  |                    |  |  |   | 
|Corporate bonds                   |  |                        | (11,078 | )                      |                    |   | 541,392               |  |                    |  |  |   | 
|                                  |  |                        |         |                        |                    |   |                       |  |                    |   |  |   |  
|                                  |  | $                      | (19,732 | )                      |                    | $ | 1,550,206             |  | $                  |  |  | $ | 
|                                  |  |                        |         |                        |                    |   |                       |  |                    |   |  |   |  

Management evaluates securities for other-than-temporary impairment at least on a quarterly basis,
and more frequently when economic or market concerns warrant such evaluation. Consideration is given to (1) the length of time and the extent to which the fair value has been less than cost, (2) the financial condition and near-term
prospects of the issuer, and (3) the intent and ability of the Company to retain its investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value.

At June 30, 2009, the Company held four debt securities with unrealized losses depreciated 3.1% from the Companys amortized cost basis. Three
of these securities are primarily guaranteed by either U.S. Government corporations or U.S. Government agencies. One security is a corporate bond for a larger regional U.S. bank. These unrealized losses relate to current interest rates for similar
types of securities and are determined to be temporary. In analyzing an issuers financial condition, management considers whether the securities are issued by the federal government or its agencies, whether downgrades by bond rating agencies
have occurred, and the results of reviews of the issuers financial condition. As management has the ability to hold debt securities until maturity, or for the foreseeable future if classified as available for sale, no declines are deemed to be
other-than-temporary. Management systematically evaluates investment securities for other-than-temporary declines in fair value on a quarterly basis. This analysis requires management to consider various factors, which include (1) duration
and magnitude of the decline in value, (2) the financial condition of the issuer or issuers, (3) structure of the security and (4) Touchmarks intent to sell the security or whether its more likely than not that Touchmark would
be required to sell the security before its anticipated recovery in market value. At June 30, 2009, management performed its quarterly analysis of all securities with an unrealized loss and concluded no material individual securities were
other-than-temporarily impaired.

Touchmarks other investment securities on the Consolidated Balance Sheets consist solely of
restricted equity securities of the Federal Home Loan Bank (FHLB) of Atlanta and the Federal Reserve Bank of Atlanta. These securities are carried at cost since they do not have readily determinable fair values due to their restricted
nature and Touchmark does not exercise significant influence.



9



---

##### Table of Contents

|4. | FAIR VALUE MEASUREMENTS
|-- | -----------------------

On January 1, 2008,
the Company adopted FASB No. 157, Fair Value Measurements. FASB No. 157 defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. FASB No. 157 applies
to reported balances that are required or permitted to be measured at fair value under existing accounting pronouncements; accordingly, the standard does not require any new fair value measurements of reported balances.

FASB No. 157 emphasizes that fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement
should be determined based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, FASB No. 157 establishes a fair value
hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting
entitys own assumptions about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy).

Level
1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level 2 inputs are inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly. Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as inputs that are observable for the asset or liability (other than quoted prices), such as interest
rates, foreign exchange rates and yield curves that are observable at commonly quoted intervals. Level 3 inputs are unobservable inputs for the asset or liability, which are typically based on an entitys own assumptions, as there is little, if
any, related market activity. In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the level in the fair value hierarchy within which the entire fair value
measurement falls is based on the lowest level input that is significant to the fair value measurement in its entirety. The Companys assessment of the significance of a particular input to the fair value measurement in its entirety requires
judgment, and considers factors specific to the asset or liability.

The tables below present the Companys assets and liabilities
measured at fair value on a recurring basis as of June 30, 2009 and December 31, 2008, aggregated by the level in the fair value hierarchy within which those measurements fall.

As of June 30, 2009:



|                                         |  |                                                             |   |                                             |   |                                        |  |       |   |  |   |           
|---------------------------------------- |  | ----------------------------------------------------------- | - | ------------------------------------------- | - | -------------------------------------- |  | ----- | - |  | - | ----------
|                                         |  | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |  | Total
|Assets                                   |  |                                                             |   |                                             |   |                                        |  |       |   |  |   |           
|Investment securities available-for-sale |  | $                                                           |  |                                             | $ | 23,817,270                             |  | $     |  |  | $ | 23,817,270
|Total assets at fair value               |  | $                                                           |  |                                             | $ | 23,817,270                             |  | $     |  |  | $ | 23,817,270

As of December 31, 2008:



|                                         |  |                                                             |   |                                             |   |                                        |  |       |   |  |   |           
|---------------------------------------- |  | ----------------------------------------------------------- | - | ------------------------------------------- | - | -------------------------------------- |  | ----- | - |  | - | ----------
|                                         |  | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   | Significant OtherObservable Inputs(Level 2) |   | SignificantUnobservableInputs(Level 3) |  | Total
|Assets                                   |  |                                                             |   |                                             |   |                                        |  |       |   |  |   |           
|Investment securities available-for-sale |  | $                                                           |  |                                             | $ | 24,978,686                             |  | $     |  |  | $ | 24,978,686
|Total assets at fair value               |  | $                                                           |  |                                             | $ | 24,978,686                             |  | $     |  |  | $ | 24,978,686



10



---

##### Table of Contents

Securities classified as available-for-sale are reported at fair value utilizing Level 2 inputs. For
these securities, the Company obtains fair value measurements from an independent pricing service. The fair value measurements consider observable data that may include dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live
trading levels, trade execution data, market consensus prepayment speeds, credit information and the bonds terms and conditions, among other things. The investments in the Companys portfolio are generally not quoted on an exchange but
are actively traded in the secondary institutional markets.

The following tables present the assets that are measured at fair value on a
non-recurring basis by level within the fair value hierarchy as reported on the consolidated statements of financial position at June 30, 2009 and December 31, 2008.



|                    |  |                                                               |   |                                           |   |                                      |  |       |           |  |   |          
|------------------- |  | ------------------------------------------------------------- | - | ----------------------------------------- | - | ------------------------------------ |  | ----- | --------- |  | - | ---------
|As of June 30, 2009 |  | Quoted Prices inActive Markets forIdentical SecuritiesLevel 1 |   | Significant OtherObservable InputsLevel
2 |   | SignificantUnobservableInputsLevel 3 |  | Total
|Impaired loans      |  | $                                                             |  |                                           | $ |                                     |  | $     | 3,461,924 |  | $ | 3,461,924

We have allocated $492,010 in specific reserves related to 2 impaired loans as of June 30,
2009. $448,260 of the specific reserve total applies to a single loan that is fully reserved. The remaining $43,750 of specific reserve relates to an elevated provision against a second loan that has been placed on non-accrual and is in process of
further evaluation. This loan is supported by several collateralized sources of repayment and may be subject to further action after all information sources have been evaluated and a current appraisal is received.



|                        |  |                                                               |   |                                           |   |                                      |  |       |   |  |   |  
|----------------------- |  | ------------------------------------------------------------- | - | ----------------------------------------- | - | ------------------------------------ |  | ----- | - |  | - | -
|As of December 31, 2008 |  | Quoted Prices inActive Markets forIdentical SecuritiesLevel 1 |   | Significant OtherObservable InputsLevel
2 |   | SignificantUnobservableInputsLevel 3 |  | Total
|Impaired loans          |  | $                                                             |  |                                           | $ |                                     |  | $     |  |  | $ | 

Impaired loans are evaluated and valued at the time the loan is identified as impaired, at the
lower of cost or fair value. Fair value is measured based on the value of the collateral securing these loans and is classified at a Level 3 in the fair value hierarchy. Collateral may include real estate, or business assets including equipment,
inventory and accounts receivable. The value of real estate collateral is determined based on an appraisal by qualified licensed appraisers hired by the Company. The value of business equipment is based on an appraisal by qualified licensed
appraisers hired by the Company if significant, or the equipments net book value on the business financial statements. Inventory and accounts receivable collateral are valued based on independent field examiner review or aging reports.
Appraised and reported values may be discounted based on managements historical knowledge, changes in market conditions from the time of the valuation, and managements expertise and knowledge of the client and clients business.
Impaired loans are evaluated on at least a quarterly basis for additional impairment and adjusted accordingly.

Fair Value of Financial
Instruments

The following methods and assumptions that were used by the Company in estimating fair values of financial instruments are
disclosed herein:

Cash, federal funds sold, and interest bearing deposits with other banks. The carrying amounts of cash and
short-term instruments approximate their fair value due to the relatively short period to maturity of instruments.

Investment securities
available-for-sale and held-to-maturity. Fair values for securities, excluding restricted equity securities, are based predominately on quoted market prices. If quoted market prices are not available, fair values are based on quoted market
prices of similar instruments.

Restricted stock. The carrying values of restricted equity securities approximate fair values.



11



---

##### Table of Contents

Loans receivable. For variable-rate loans that reprice frequently and have no significant change
in credit risk, fair values are based on carrying values. Fair values for fixed rate loans are estimated using discounted cash flow analyses, using interest rates currently being offered for loans with similar terms to borrowers of similar credit
quality. Fair values for impaired loans are estimated using discounted cash flow analyses or underlying collateral values, where applicable.

Deposit liabilities. The fair values disclosed for demand deposits are, by definition, equal to the amount payable on demand at the reporting date (that is, their carrying amounts). The carrying amounts of variable-rate, fixed-term
money market accounts and certificates of deposit approximate their fair values at the reporting date. Fair values for fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies interest rates currently
being offered on certificates to a schedule of aggregated expected monthly maturities on time deposits.

Federal Home Loan Bank
(FHLB) advances. Fair values of FHLB advances are estimated using discounted cash flow analyses based on the Banks current incremental borrowing rates for similar types of borrowing arrangements.

Accrued interest. The carrying amounts of accrued interest approximate their fair values.

Off-balance-sheet instruments. Fair values for off-balance-sheet lending commitments are based on fees currently charged to enter into similar
agreements, taking into account the remaining terms of the agreements and the counter parties credit standings.

The Companys
carrying amounts and fair values of financial instruments were as follows:



|                                           |  |                |        |           |   |       
|------------------------------------------ |  | -------------- | ------ | --------- | - | ------
|                                           |  | June 30, 2009 
|                                           |  | In Thousands  
|                                           |  | CarryingAmount |        | FairValue
|Financial assets:                          |  |                |        |           |   |       
|Cash and due from banks                    |  | $              | 2,541  |           | $ | 2,541 
|Federal funds sold                         |  |                | 250    |           |   | 250   
|Interest-bearing accounts with other banks |  |                | 4,168  |           |   | 4,168 
|Securities available for sale              |  |                | 23,817 |           |   | 23,817
|Securities held to maturity                |  |                | 9,372  |           |   | 9,792 
|Restricted stock                           |  |                | 1,399  |           |   | 1,399 
|Loans receivable                           |  |                | 46,981 |           |   | 47,781
|Accrued interest receivable                |  |                | 426    |           |   | 426   
|Financial liabilities:                     |  |                |        |           |   |       
|Deposit liabilities                        |  |                | 52,845 |           |   | 52,042
|FHLB advances                              |  |                | 11,400 |           |   | 11,600
|Accrued interest payable                   |  |                | 46     |           |   | 46    
|Unrecognized financial instruments:        |  |                |        |           |   |       
|Commitments to extend credit               |  |                | 11,179 |           |   | 11,179



|5. | EARNINGS (LOSS) PER SHARE
|-- | -------------------------

Basic loss per share is
computed by dividing net loss by the weighted average number of shares of common stock outstanding. Diluted loss per share is computed by dividing net loss by the sum of the weighted average number of shares of common stock outstanding and potential
common shares. Potential common shares consist of stock options and warrants. Weighted average shares outstanding for the three months ended June 30, 2009 and 2008 were 3,470,391. Basic loss per share for the three months ended June 30,
2009 and 2008 was $0.22 and $0.17, respectively. Weighted average shares outstanding for the six months ended June 30, 2009 and 2008 were 3,470,391 and 2,872,292, respectively. Basic loss per share for the six months ended June 30, 2009
and 2008 was $0.37 and $0.73, respectively. Diluted loss per share is not presented, as the current net loss would result in an anti-dilutive calculation.



12



---

##### Table of Contents

|6. | SUBSEQUENT EVENTS
|-- | -----------------

Subsequent to June 30,
2009, the Company sold certain held to maturity securities to mitigate exposure risks and to prudently take advantage of extraordinary gains in the portfolio. As a result of selling said securities, accounting rules mandate that all of the
companys held-to-maturity securities be re-characterized as available-for-sale securities for future reporting periods.

Subsequent
events have been evaluated through August 13, 2009, which is the date of the financial statements were available to be issued.



|7. | RECENT ACCOUNTING PRONOUNCEMENTS
|-- | --------------------------------

In April 2009,
the FASB issued FSP FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies. FSP FAS 141(R)-1 amends and clarifies SFAS 141(R) to address application issues on initial
recognition and measurement, subsequent measurement and accounting, and disclosure of assets and liabilities arising from contingencies in a business combination. The FSP is effective for assets and liabilities arising from contingencies in business
combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. The Company does not expect the adoption of FSP FAS 141(R)-1 to have a material impact on its
consolidated financial statements.

In April 2009, the FASB issued FSP FAS 157-4, Determining Fair Value When the Volume and Level of
Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly. FSP FAS 157-4 provides additional guidance for estimating fair value in accordance with SFAS 157 when the volume and level of
activity for the asset or liability have significantly decreased. The FSP also includes guidance on identifying circumstances that indicate a transaction is not orderly. FSP FAS 157-4 is effective for interim and annual periods ending after
June 15, 2009, and shall be applied prospectively. Earlier adoption is permitted for periods ending after March 15, 2009. The adoption of FSP FAS 157-4 did not have a material impact on the consolidated financial statements.

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments. FSP FAS 107-1 and APB
28-1 amends SFAS No. 107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial
statements. In addition, the FSP amends APB Opinion No. 28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. The FSP is effective for interim periods ending after
June 15, 2009, with earlier adoption permitted for periods ending after March 15, 2009. The adoption of FSP FAS 107-1 and APB 28-1 did not have a material impact on the consolidated financial statements.

In April 2009, the FASB issued FSP FAS 115-1 and FAS 124-2, Recognition and Presentation of Other-Than-Temporary Impairments. FSP FAS 115-1 and FAS
124-2 amends other-than-temporary impairment guidance for debt securities to make guidance more operational and to improve the presentation and disclosure of other-than-temporary impairments on debt and equity securities. The FSP does not amend
existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. FSP FAS 115-1 and FAS 124-2 is effective for interim and annual periods ending after June 15, 2009, with earlier adoption permitted
for periods ending after March 15, 2009. The adoption of FSP FAS 115-1 and FAS 124-2 did not have a material impact on the consolidated financial statements.

In April 2009, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 111 (SAB 111). SAB 111 amends and replaces SAB Topic 5.M. in the SAB Series entitled Other Than Temporary Impairment
of Certain Investments in Debt and Equity Securities. SAB 111 maintains the SEC Staffs previous views related to equity securities and amends Topic 5.M. to exclude debt securities from its scope. The Company does not expect the
implementation of SAB 111 to have a material impact on its consolidated financial statements.

On June 29, 2009, the FASB issued
Statement of Financial Accounting Standards (SFAS) No. 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles - a replacement of FASB Statement No. 162
(SFAS 168). SFAS 168 establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with US GAAP. SFAS 168 will be effective for financial statements issued for interim and annual periods ending after September 15, 2009, for most



13



---

##### Table of Contents

entities. On the effective date, all non-SEC accounting and reporting standards will be superseded. The Company will adopt SFAS 168 for the quarterly period
ended September 30, 2009, as required, and adoption is not expected to have a material impact on its financial statements taken as a whole.

On June 12, 2009, the FASB issued SFAS No. 166, Accounting for Transfers of Financial Assets (SFAS 166), and SFAS No. 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167),
which change the way entities account for securitizations and special-purpose entities.

SFAS 166 is a revision to FASB SFAS No. 140,
Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and will require more information about transfers of financial assets, including securitization transactions, and where companies have continuing
exposure to the risks related to transferred financial assets. SFAS 166 also eliminates the concept of a qualifying special-purpose entity, changes the requirements for derecognizing financial assets and requires additional disclosures.

SFAS 167 is a revision to FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities, and changes how a company
determines when an entity that is insufficiently capitalized or is not controlled through voting (or similar rights) should be consolidated. The determination of whether a company is required to consolidate an entity is based on, among other things,
an entitys purpose and design and a companys ability to direct the activities of the entity that most significantly impact the entitys economic performance.

Both SFAS 166 and SFAS 167 will be effective as of the beginning of each reporting entitys first annual reporting period that begins after
November 15, 2009, for interim periods within that first annual reporting period and for interim and annual reporting periods thereafter. Earlier application is prohibited. The recognition and measurement provisions of SFAS 166 shall be applied
to transfers that occur on or after the effective date. The Company will adopt both SFAS 166 and SFAS 167 on January 1, 2010, as required. Management has not determined the impact adoption may have on the Companys consolidated financial
statements.

On May 28, 2009, the FASB issued SFAS No. 165, Subsequent Events (SFAS 165). Under SFAS 165,
companies are required to evaluate events and transactions that occur after the balance sheet date but before the date the financial statements are issued, or available to be issued in the case of non-public entities. SFAS 165 requires entities to
recognize in the financial statements the effect of all events or transactions that provide additional evidence of conditions that existed at the balance sheet date, including the estimates inherent in the financial preparation process. Entities
shall not recognize the impact of events or transactions that provide evidence about conditions that did not exist at the balance sheet date but arose after that date. SFAS 165 also requires entities to disclose the date through which subsequent
events have been evaluated. SFAS 165 was effective for interim and annual reporting periods ending after June 15, 2009. The Company adopted the provisions of SFAS 165 for the quarter ended June 30, 2009, as required, and adoption did not
have a material impact on its financial statements taken as a whole.

On February 27, 2009, the Board of Directors of the Federal
Deposit Insurance Corporation (FDIC) voted to amend the restoration plan for the Deposit Insurance Fund (DIF). The Board also took action to ensure the continued strength of the insurance fund by imposing a special assessment on insured institutions
of 20 basis points, implementing changes to the risk-based assessment system, and setting rates beginning the second quarter of 2009. Under the restoration plan approved last October, the Board set a rate schedule to raise the DIF reserve ratio to
1.15 percent within five years. The February 27, 2009 action extends the restoration plan horizon to seven years in recognition of the current significant strains on banks and the financial system and the likelihood of a severe recession. The
amended restoration plan was accompanied by a final rule that sets assessment rates and makes adjustments that improve how the assessment system differentiates for risk. Currently, most banks are in the best risk category and pay anywhere from 12
cents per $100 of deposits to 14 cents per $100 for insurance. Under the final rule, banks in this category will pay initial base rates ranging from 12 cents per $100 to 16 cents per $100 on an annual basis, beginning on April 1, 2009.

On May 22, 2009, the FDIC Board of Directors (Board) adopted the final rule on special assessments. The special assessment will be
calculated at 5 basis points times each insured depositor institutions assets minus Tier 1 capital as reported in the report of condition of June 30, 2009. The amount of the special assessment for any institution will not exceed 10 basis
points times the institutions assessment base for the second quarter 2009 risk-based assessment. The special assessment will be collected on September 30, 2009, at the same time the regular quarterly risk-based



14



---

##### Table of Contents

assessment for the second quarter 2009 are collected. The Board may, by vote, impose an additional special assessment in 2009 of up to 5 basis points on
assets minus Tier 1 capital on all insured depository institutions if the Board believes that the reserve ratio of the DIF is estimated to fall to a level that would adversely affect public confidence or to a level which shall be close to or below
zero. Any such additional special assessment will not exceed 10 basis points times the institutions assessment base for the corresponding quarter. The latest possible date for imposing an additional special assessment under the final rule
would be December 1, 2009, with collection on March 30, 2010. The Company is currently evaluating the effects of these insurance increases to its financial position and results of operation. Though official notification of the special
assessment amount had not been received as of August 12th, the amount is
estimated at $14,432.00.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The following discussion reviews our results of operations and assesses our financial condition. You should read the following discussion and analysis in conjunction with the accompanying condensed consolidated
financial statements. The commentary should be read in conjunction with the discussion of forward-looking statements, the consolidated financial statements, and the related notes and the other statistical information included in this report.

DISCUSSION OF FORWARD-LOOKING STATEMENTS

This report
contains forward-looking statements relating to, without limitation, future economic performance, plans and objectives of management for future operations, and projections of revenues and other financial items that are based on the
beliefs of our management, as well as assumptions made by and information currently available to management. The words expect, estimate, anticipate, and believe, as well as similar expressions, are
intended to identify forward-looking statements. Our actual results may differ materially from the results discussed in the forward-looking statements, and our operating performance each quarter is subject to various risks and uncertainties that are
discussed in detail in our filings with the Securities and Exchange Commission (the SEC), including, without limitation:



| |  |  | significant increases in competitive pressure in the banking and financial services industries;
| | - |  | -----------------------------------------------------------------------------------------------



| |  |  | changes in the interest rate environment which could reduce anticipated or actual margins;
| | - |  | ------------------------------------------------------------------------------------------



| |  |  | changes in political conditions or the legislative or regulatory environment;
| | - |  | -----------------------------------------------------------------------------



| |  |  | general economic conditions, either nationally or regionally and especially in our primary service area, becoming less favorable than expected, resulting in, among
other things, a deterioration in credit quality;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | changes occurring in business conditions and inflation;
| | - |  | -------------------------------------------------------



| |  |  | changes in technology;
| | - |  | ----------------------



| |  |  | the level of our allowance for loan losses and the lack of seasoning of our loan portfolio;
| | - |  | -------------------------------------------------------------------------------------------



| |  |  | the rate of delinquencies and amounts of charge-offs;
| | - |  | -----------------------------------------------------



| |  |  | the rates of loan growth;
| | - |  | -------------------------



| |  |  | adverse changes in asset quality and resulting credit risk-related losses and expenses;
| | - |  | ---------------------------------------------------------------------------------------



| |  |  | changes in monetary and tax policies;
| | - |  | -------------------------------------



| |  |  | loss of consumer confidence and economic disruptions resulting from terrorist activities;
| | - |  | -----------------------------------------------------------------------------------------



| |  |  | changes in the securities markets; and
| | - |  | --------------------------------------



| |  |  | other risks and uncertainties detailed from time to time in our filings with the SEC.
| | - |  | -------------------------------------------------------------------------------------



15



---

##### Table of Contents

Industry Overview

The first six months of 2009 continue to reflect the tumultuous economic conditions which have negatively impacted liquidity and credit quality. Concerns regarding increased credit losses from the weakening economy have negatively affected
capital and earnings of most financial institutions. Financial institutions have experienced significant declines in the value of collateral for real estate loans, heightened credit losses, which have resulted in record levels of non-performing
assets, charge-offs and foreclosures. In addition, certain financial institutions failed or merged with other institutions during 2008 and during the first six months of 2009, and two of the government sponsored housing enterprises were placed into
conservatorship with the U.S. government. The State of Georgia and the Atlanta metropolitan area in particular have gained the unfortunate distinction of experiencing among the highest incidences of bank closures nationwide since the onset of the
2007 financial crisis.

Liquidity in the debt markets remains low in spite of efforts by the U.S. Department of the Treasury (Treasury) and the
Federal Reserve Bank (Federal Reserve) to inject capital into financial institutions. The federal funds rate set by the Federal Reserve has remained at 0.25% since December 2008, following a decline from 4.25% to 0.25% during 2008
through a series of seven rate reductions.

Treasury, the FDIC and other governmental agencies continue to enact rules and regulations to implement the
EESA, the Troubled Asset Relief Program (TARP), the Financial Stability Plan, the American Recovery and Reinvestment Act (ARRA) and related economic recovery programs, many of which contain limitations on the ability of
financial institutions to take certain actions or to engage in certain activities if the financial institution is a participant in the TARP Capital Purchase Program or related programs. Future regulations, or enforcement of the terms of programs
already in place, may require financial institutions to raise additional capital and result in the conversion of preferred equity issued under TARP or other programs to common equity. There can be no assurance as to the actual impact of the EESA,
the FDIC programs or any other governmental program on the financial markets.

Difficult economic conditions are expected to prevail through the second
half of 2009. Reduced levels of commercial activity will continue to challenge prospects for robust balance sheet growth and earning asset yields at a time when the market for profitable commercial banking relationships is intensely competitive. As
a result, financial institutions in general will continue to experience pressure on earning asset yields, funding costs, operating expenses, liquidity and capital.

Company Overview

The following describes our results of operations for the three and six months ended June 30,
2009 and also analyzes our financial condition as of June 30, 2009. Touchmark National Bank, our banking subsidiary (the Bank), opened for business on January 28, 2008. Touchmark Bancshares, Inc. (the Company) was
established on April 3, 2007. Until January 28, 2008, our principal activities related to our organization, the conducting of our initial public offering and the pursuit of regulatory approvals from the Office of the Comptroller of the
Currency (the OCC) for our application to charter the bank, the pursuit of approvals from the Federal Reserve to become a bank holding company, and the pursuit of approvals from the Federal Deposit Insurance Corporation (the
FDIC) for our application for insurance of the deposits of the Bank. We received approval from the FDIC, Federal Reserve, and the OCC in January 2008 and commenced business on January 28, 2008. We completed our stock offering in
March 2008, with the issuance of 3,470,391 shares for gross proceeds of $34,703,910, pursuant to an initial closing in January 2008 and a final closing in March 2008. Offering expenses of $512,367 were netted against the gross proceeds. We
capitalized the Bank with $26,000,000 of the proceeds from the stock offering. During the first quarter of 2009, the Company injected an additional $500,000 into the Bank to replace depleted reserves and comfortably maintain the Banks lending
limit, which in general amounts to 15% of capital and unimpaired surplus. We currently operate full service branches in Norcross, Duluth and Doraville, Georgia.

On June 22, 2009, we acquired the former main office of Alpha Bank & Trust, located at 3651 Old Milton Parkway, Alpharetta, Georgia, for $1.6 million from the FDIC in its capacity as receiver of Alpha Bank & Trust, pursuant to that
certain Real Estate Purchase and Sale Contract (the Purchase Contract), effective as of May 23, 2009, by and between Gwinnett Clinic, Ltd. and the FDIC as receiver. The Purchase Contract was assigned to us, for $1.00 in consideration, by
Gwinnett Clinic, Ltd., a business interest owned by one of our directors, Dr. J.J. Shah. In addition, WB Realty Services, LLC, a business interest owned by one of our directors, J. William Butler, represented Gwinnett Clinic as broker in the
transaction and was paid a commission equal to 1.5% of the purchase price by the FDIC. We also purchased all personal property located on the property for $75,000 on a as is, where is basis. Additional information regarding this
transaction, including copies of the transaction documents, can be found on our Current Report on Form 8-K filed with the SEC on June 26, 2009.

On June
15, 2009, we filed an application with the OCC to establish a branch office at 3651 Old Milton Parkway, Alpharetta, Georgia. We received approval from the OCC on August 3, 2009. We plan to open the new branch office in Alpharetta within the next 30
days and to close our existing branch office location in Norcross. Our executive offices will also be relocated from Norcross to the Alpharetta office.

Like most community banks, we expect to derive most of our income from interest we receive on our loans and investments. As we grow, our primary source of funds for making these loans and investments is our deposits, on the majority of
which we pay interest. Consequently, one of the key measures of our success is our level of net interest income, or the difference between the income on our interest-earning assets, such as loans and investments, and the expense on our
interest-bearing



16



---

##### Table of Contents

liabilities, such as deposits and borrowings. Another key measure is the spread between the yield we earn on these interest-earning assets, and the rate we
pay on our interest-bearing liabilities. As we increase the size of our balance sheet, our net interest income will increase until revenue exceeds cash and non-cash expenses. At that point the bank will operate profitably.

There are risks inherent in all loans, so we maintain an allowance for loan losses to absorb probable losses on existing loans that may become uncollectible. We
establish and maintain this allowance by charging a provision for loan losses against our earnings. In the following section we have included a detailed discussion of this process.

Results of Operations for the Three Months Ended June 30, 2009 and 2008

We incurred a net loss of $761,755 and
$588,784 for the three months ended June 30, 2009 and 2008, respectively. For the three months ended June 30, 2009, we realized $1,033,255 in interest income, consisting primarily of $593,876 from loan revenue and $439,379 from investment
revenue. Additionally, $331,773 of non-interest income was recognized from the gain on sale of investment securities. During the second quarter of 2009, $82,968 in interest income was reversed as a result of loans placed on non-accrual. For the
three months ended June 30, 2008, we realized $407,220 in interest income, consisting primarily of $333,768 from investment activities and $73,452 from loan activities. The provision for loan loss was $600,185 for the quarter ended
June 30, 2009, and $108,395 for the quarter ended June 30, 2008. The Company increased its allowance levels during the second quarter in conjunction with certain past due loans in the portfolio. The allowance for loan losses is increased
by provisions for loan losses and by recoveries of loans previously charged-off and reduced by loans charged-off. To date, the Company has not experienced any charge-offs.

Over time, we anticipate that loan revenue will comprise an increasing share of total revenue. Since we commenced business in January 2008, the agency and investment grade debt markets have provided opportunities for
superior risk-adjusted returns. As such, we have invested in these markets along with our primary mission of investing in commercial-grade loans. Our ability to develop an income stream and recognize securities gains in recent periods has served as
a welcome buffer against expense as we endeavor as a de novo financial institution to build our balance sheet to a level of profitability. We anticipate the growth in loans in future quarters will drive the growth in assets and the growth in
interest income. The primary sources of funding for our loan portfolio are deposits and Federal Home Loan Bank advances. We incurred interest expense of $304,237 related to deposit accounts, $69,939 related to Federal Home Loan Bank advances, and
$243 related to other borrowings during the three months ended June 30, 2009. For the three months ended June 30, 2008, we incurred interest expense of $17,200 related to deposit accounts and $22,483 of interest expense related to Federal
Home Loan Bank advances.

We incurred non-interest expenses of $1,159,457 and $847,985 during the three months ended June 30, 2009 and 2008,
respectively. Included in non-interest expense for the three months ended June 30, 2009 is $677,310 in salaries and employee benefits, $156,253 of occupancy and equipment expenses, and $325,894 in other operating expense. The primary components
in the other operating expense category for the three months ended June 30, 2009 were $53,432 in legal fees, $53,379 in data processing and IT related services, and $47,400 in advertising and marketing expense.

The non-interest expense incurred in the three months ended June 30, 2008 was $847,985. Included in non-interest expense was $534,050 in salaries and employee
benefits, $60,948 of occupancy and equipment expenses, and $252,987 in other operating expenses. Included in other operating expenses for the quarter ended June 30, 2008 was $31,185 in expense related to advertising and marketing, $33,492 in
legal fees, and $30,547 in data processing and IT related services.

The following tables calculate the net yield on earning assets for the three months
ended June 30, 2009 and 2008, respectively. Net yield on earning assets, commonly referred to as margin, is calculated by dividing annualized net interest income by average earning assets. Net yield on earning assets amounted to
3.26% for the three months ended June 30, 2009, which represents a decrease of 104 basis points from the second quarter 2008. The decline is due primarily to the increase in the Banks leverage over the comparative periods. In the second
quarter 2008, most of the Companys assets were funded from initial capital, which carries no explicit funding expense. Subsequent assets have been funded primarily with interest-bearing liabilities. To a lesser degree, the comparative decline
is also related to the reversal of $82,968 of accrued interest income associated with loans placed on non-accrual during the second quarter of 2009.



17



---

##### Table of Contents

For the three months ended June 30, 2009

(Dollars In Thousands)



|                                 |  |           |        |             |   |            |  |      |  
|-------------------------------- |  | --------- | ------ | ----------- | - | ---------- |  | ---- | -
|                                 |  | Avg. Bal. |        | Int Inc/Exp |   | Yield/Cost | 
|Federal Funds Sold               |  | $         | 85     |             | $ |           |  | 0.00 | %
|Securities                       |  |           | 32,641 |             |   | 423        |  | 5.18 | %
|Loans                            |  |           | 43,219 |             |   | 594        |  | 5.50 | %
|Other                            |  |           | 4,997  |             |   | 17         |  | 1.36 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  |           | 80,942 |             |   | 1,034      |  | 5.11 | %
|                                 |  |           |        |             |   |            |  |      |  
|Interest Bearing Demand Deposits |  |           | 23,656 |             |   | 148        |  | 2.50 | %
|Time Deposits                    |  |           | 21,187 |             |   | 156        |  | 2.95 | %
|Other Borrowings                 |  |           | 11,486 |             |   | 70         |  | 2.44 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  | $         | 56,329 |             | $ | 374        |  | 2.66 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net Interest Income/spread       |  |           |        |             | $ | 660        |  | 2.45 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net yield on earning assets      |  |           |        |             |   |            |  | 3.26 | %

For the three months ended June 30, 2008

(Dollars In Thousands)



|                                 |  |           |        |             |   |            |  |      |  
|-------------------------------- |  | --------- | ------ | ----------- | - | ---------- |  | ---- | -
|                                 |  | Avg. Bal. |        | Int Inc/Exp |   | Yield/Cost | 
|Federal Funds Sold               |  | $         | 3,977  |             | $ | 23         |  | 2.31 | %
|Securities                       |  |           | 23,080 |             |   | 298        |  | 5.16 | %
|Loans                            |  |           | 4,680  |             |   | 73         |  | 6.24 | %
|Other                            |  |           | 2,475  |             |   | 13         |  | 2.10 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  |           | 34,212 |             |   | 407        |  | 4.76 | %
|                                 |  |           |        |             |   |            |  |      |  
|Interest Bearing Demand Deposits |  |           | 1,216  |             |   | 8          |  | 2.63 | %
|Time Deposits                    |  |           | 1,076  |             |   | 9          |  | 3.35 | %
|Other Borrowings                 |  |           | 3,136  |             |   | 22         |  | 2.81 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  | $         | 5,428  |             | $ | 39         |  | 2.87 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net Interest Income/spread       |  |           |        |             | $ | 368        |  | 1.88 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net yield on earning assets      |  |           |        |             |   |            |  | 4.30 | %

Results of Operations for the Six Months Ended June 30, 2009 and 2008

We incurred a net loss of $1,301,060 and $2,103,605 for the six months ended June 30, 2009 and 2008, respectively. For the six months ended June 30, 2009, we
realized $1,977,054 in interest income, consisting primarily of $1,123,941 from loan revenue and $853,113 from investment revenue. Additionally, $461,417 of non-interest income was recognized from the gain on sale of investment securities. Interest
income was negatively impacted during the second quarter due to loans placed on non-accrual, which resulted in an interest income reversal of $82,968. For the six months ended June 30, 2008, we realized $808,753 in interest income consisting
primarily of $730,697 from investment activities and $78,056 from loan activities. Over time, we anticipate that loan revenue will comprise an increasing share of total revenue. Since we commenced business in January 2008, the agency and investment
grade debt markets have provided opportunities for superior risk-adjusted returns. As such, we have invested in these markets along with our primary mission of investing in commercial-grade loans. Our ability to develop an income stream and
recognize securities gains in recent periods has served as a welcome buffer against expense as we endeavor as a de novo financial institution to build our balance sheet to a level of profitability.



18



---

##### Table of Contents

We anticipate the growth in loans in future quarters will drive the growth in assets and the growth in interest income. Our provision for loan loss amounted
to $703,450 for the six months ended June 30, 2009, and $125,300 for the six months ended June 30, 2008. The company increased its allowance levels during the second quarter in conjunction with certain past due loans in the portfolio. The
allowance for loan losses is increased by provisions for loan losses and by recoveries of loans previously charged-off and reduced by loans charged-off. To date, the Company has not experienced any charge-offs.

The primary sources of funding for our loan portfolio are deposits and Federal Home Loan Bank advances. We incurred interest expense of $614,712 related to deposit
accounts, $139,801 related to Federal Home Loan Bank advances, and $492 related to other borrowings during the six months ended June 30, 2009. For the six months ended June 30, 2008, we incurred interest expense of $18,546 related to
deposit accounts and $24,929 of interest expense related to Federal Home Loan Bank advances.

We incurred non-interest expenses of $2,292,213 and
$2,743,642 during the six months ended June 30, 2009 and 2008, respectively. Included in non-interest expense for the six months ended June 30, 2009 is $1,366,582 in salaries and employee benefits, $307,806 of occupancy and equipment
expenses, and $617,825 in other operating expense. The primary components in the other operating expense category for the six months ended June 30, 2009 were $79,351 in legal fees, $108,309 in data processing and IT related services, and
$83,179 in advertising and marketing expense.

The non-interest expense incurred in the six months ended June 30, 2008 was $2,743,642. Included in
non-interest expense was $2,213,862 in salaries and employee benefits, $112,106 of occupancy and equipment expenses, and $417,674 in other operating expenses. Included in salaries and employee benefits expense for the six months ended June 30,
2008 was $1,300,233 of expense related to the issuance of warrants to organizers and directors of the Company. Additionally, the primary components of other operating expenses included $57,440 in expense related to advertising and marketing, $40,741
in data processing and IT related services, $37,625 related to the issuance of warrants to an organizational consultant for the Bank, and $33,492 in legal fees.

The following tables calculate the net yield on earning assets for the six months ended June 30, 2009 and 2008, respectively. Net yield on earning assets amounted to 3.10% for the six months ended June 30, 2009, which represents a
decrease of 259 basis points from the first six months 2008. The decline is due primarily to the increase in the Banks leverage over the comparative periods and interest income recognized at the end of our capital accumulation phase. In the
six months ended June 30, 2008, the companys assets were funded primarily from initial capital, which carries no explicit funding expense. Subsequent assets have been funded primarily with interest-bearing liabilities. To a lesser degree,
the comparative decline is also related to the reversal of $82,968 of accrued revenue associated with loans placed on non-accrual during the second quarter 2009.



19



---

##### Table of Contents

For the six months ended June 30, 2009

(Dollars In Thousands)



|                                 |  |           |        |             |   |            |  |      |  
|-------------------------------- |  | --------- | ------ | ----------- | - | ---------- |  | ---- | -
|                                 |  | Avg. Bal. |        | Int Inc/Exp |   | Yield/Cost | 
|Federal Funds Sold               |  | $         | 757    |             | $ | 1          |  | 0.26 | %
|Securities                       |  |           | 30,539 |             |   | 793        |  | 5.19 | %
|Loans                            |  |           | 39,350 |             |   | 1,124      |  | 5.71 | %
|Other                            |  |           | 8,269  |             |   | 59         |  | 1.43 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  |           | 78,915 |             |   | 1,977      |  | 5.01 | %
|                                 |  |           |        |             |   |            |  |      |  
|Interest Bearing Demand Deposits |  |           | 21,755 |             |   | 306        |  | 2.81 | %
|Time Deposits                    |  |           | 19,730 |             |   | 308        |  | 3.12 | %
|Other Borrowings                 |  |           | 11,481 |             |   | 140        |  | 2.44 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  | $         | 52,966 |             |   | 754        |  | 2.85 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net Interest Income/spread       |  |           |        |             | $ | 1,223      |  | 2.16 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net yield on earning assets      |  |           |        |             |   |            |  | 3.10 | %
|                                 |  |           |        |             |   |            |  |      |  

For the six months ended June 30, 2008

(Dollars In Thousands)

|                                 |  |           |        |             |   |            |  |      |  
|-------------------------------- |  | --------- | ------ | ----------- | - | ---------- |  | ---- | -
|                                 |  | Avg. Bal. |        | Int Inc/Exp |   | Yield/Cost | 
|Federal Funds Sold               |  | $         | 7,798  |             | $ | 112        |  | 2.87 | %
|Securities                       |  |           | 15,275 |             |   | 604        |  | 7.91 | %
|Loans                            |  |           | 2,508  |             |   | 78         |  | 6.22 | %
|Other                            |  |           | 1,323  |             |   | 14         |  | 2.12 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  |           | 26,904 |             |   | 808        |  | 6.01 | %
|                                 |  |           |        |             |   |            |  |      |  
|Interest Bearing Demand Deposits |  |           | 649    |             |   | 8          |  | 2.47 | %
|Time Deposits                    |  |           | 590    |             |   | 10         |  | 3.39 | %
|Other Borrowings                 |  |           | 1,721  |             |   | 25         |  | 2.91 | %
|                                 |  |           |        |             |   |            |  |      |  
|Total                            |  | $         | 2,960  |             |   | 43         |  | 2.91 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net Interest Income/spread       |  |           |        |             | $ | 765        |  | 3.10 | %
|                                 |  |           |        |             |   |            |  |      |  
|Net yield on earning assets      |  |           |        |             |   |            |  | 5.69 | %
|                                 |  |           |        |             |   |            |  |      |  

Assets and Liabilities

General

At June 30, 2009, we had total assets of $94,625,156, consisting principally of $33,189,742 in securities, $46,981,242 in net
loans, $4,168,132 in interest-bearing accounts with other banks, and $5,478,661 in premises and equipment. Total assets increased by $23,422,606 since December 31, 2008 when we had total assets of $71,202,550. Assets as of December 31,
2008 consisted of cash and deposits due from banks of $1,029,163, federal funds sold of $1,297,000, interest-bearing accounts with other banks of $4,073,041, securities available for sale of $24,978,686, securities held to maturity $2,472,490,
premises and equipment of $3,873,011, net loans of $31,553,475 and accrued interest receivable $430,972, restricted stock of $1,329,550, and other assets of $165,162.



20



---

##### Table of Contents

During the six month period, cash and equivalents increased and have remained relatively high as result of lower than
anticipated loan demand. Investment securities balances designated as Available For Sale (AFS) declined by $1,161,416, due primarily to principal and prepayments on our portfolio of mortgage backed securities. Investment securities designated as
Held To Maturity (HTM) increased by $6,899,982 during the period, as we identified several attractive opportunities to invest in high-grade corporate debt obligations. Loan balances increased during the period by $16,131,217, or 50%, as we continued
to prudently build a portfolio of commercial loans and lending facilities.

Liabilities at June 30, 2009 amounted to $64,551,166, consisting
principally of $52,845,299 in deposits and $11,400,000 in Federal Home Loan Bank advances. During the six month period, total deposits increased by $25,068,649, or 90%, as business and marketing efforts increased the number and size of the
Banks depositing clients. Non-interest bearing balances increased by $2,168,507 or 121%. Liabilities increased $24,832,485 from December 31, 2008 to June 30, 2009. Our liabilities at December 31, 2008 were $39,718,681 and
consisted of deposits of $27,776,650, Federal Home Loan Bank advances of $11,400,000 and other liabilities of $542,031, including interest payable.

At
June 30, 2009, shareholders equity was $30,073,990. During the first quarter of 2009, $500,000 was injected into the Bank from the Company to replenish capital reserves as result of ongoing losses incurred during our start-up period. The
injection was made to comfortably maintain the Banks legal lending limit, which in general amounts to 15% of capital and unimpaired surplus. Shareholders equity at December 31, 2008 was $31,483,869.

Investments

At June 30, 2009, the carrying value of our
securities and restricted stock amounted to $34,588,792. This included $21,489,628 in mortgage backed securities, $11,700,114 in corporate bonds and $1,399,050 in restricted equity securities. The restricted equity securities are comprised of stock
in the Federal Reserve Bank of Atlanta and in the Federal Home Loan Bank of Atlanta. The carrying value of securities and restricted stock increased by $5,808,066 from December 31, 2008 to June 30, 2009. As of December 31, 2008, the
carrying value of our securities and restricted stock was $28,780,726.

Loans

Since loans typically provide higher interest yields than other types of interest earning assets, we intend over time to invest a substantial portion of our earning assets in our loan portfolio. At June 30, 2009,
our loan portfolio consisted of $12,802,711 of construction and land development loans, $27,823,040 in other real estate loans, $1,377,387 in consumer loans, $5,942,567 in commercial and industrial loans, and $140,877 in other loans. The interest on
loans is discontinued when, in managements opinion, the borrower may be unable to meet payments as they become due. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only
to the extent cash payments are received. Loans are returned to accrual status when all the principal and interest amounts contractually due are reasonably assured of repayment within a reasonable time frame. The Bank had two non-accrual loans as of
June 30, 2009 amounting to $3,953,934. Placing theses loans on non-accrual status resulted in an interest income reversal of $82,968 during the second quarter. The Bank has not experienced any charge-off since commencing operations.

Total loans increased during the six months ended June 30, 2009 by $16,131,217 to $48,086,582 at June 30, 2009 from $31,955,365 at December 31, 2008.

Provision and Allowance for Loan Losses

We have
established an allowance for loan losses through a provision for loan losses charged to expense on our consolidated statement of operations. The allowance for loan losses was $1,105,340 as of June 30, 2009, an increase of $703,450 from
December 31, 2008 when the allowance for loan losses was $401,890. The allowance for loan losses represents an amount which we believe will be adequate to absorb probable losses on existing loans that may become uncollectible. Our judgment as
to the adequacy of the allowance for loan losses is based on a number of assumptions regarding current portfolio and economic conditions, which we believe to be reasonable, but which may or may not prove to be accurate. Over time, we will
periodically determine the amount of the allowance based on our consideration of several factors, including an ongoing review of the quality, mix and size of our overall loan portfolio, our historical loan loss experience, evaluation of economic
conditions and other qualitative factors, specific problem loans and commitments that may affect the borrowers ability to pay.

Periodically, we will
adjust the amount of the allowance based on changing circumstances. We will charge recognized losses to the allowance and add subsequent recoveries back to the allowance for loan losses. There can be no assurance that charge-offs of loans in future
periods will not exceed the allowance for loan losses as estimated at any point in time or that provisions for loan losses will not be significant to a particular accounting period.



21



---

##### Table of Contents

The Company allocated $492,010 in specific reserves relating to impaired loans as of June 30, 2009. The allowance
for loan losses is increased by provisions for loan losses and by recoveries of loans previously charged-off and reduced by loans charged-off. To date, the company has not experienced any charge-offs.

Premises and Equipment

Premises and Equipment totaled $5,478,661 as
of June 30, 2009 which was an increase of $1,605,650 from December 31, 2008. The increase resulted from the purchase of a new branch office location and associated furniture, fixtures and equipment for $1,675,000 that was completed during
the second quarter. Additional information regarding this acquisition is set forth under the caption Company Overview at the beginning of this Item and in our Current Report on Form 8-K filed with the SEC on June 26, 2009.

Deposits

Our primary source of funds for loans and securities are
our customer deposits and Federal Home Loan Bank advances. At June 30, 2009, we had $52,845,299 in deposits, which consisted primarily of $3,960,644 in non-interest bearing demand deposit accounts, $25,319,001 in time deposits, and $23,565,654
of other interest bearing accounts. Deposits increased $25,068,649 from December 31, 2008 when deposits were $27,776,650 consisting primarily of $1,792,137 in non-interest bearing demand deposit accounts, $10,634,756 in time deposits, and
$15,349,757 of other interest bearing accounts.

Liquidity

Liquidity represents the ability of a company to convert assets into cash or cash equivalents without significant loss, and the ability to raise additional funds by increasing liabilities. For an operating bank, liquidity represents the
ability to provide steady sources of funds for loan commitments and investment activities, as well as to maintain sufficient funds to cover deposit withdrawals and payment of debt and operating obligations. Liquidity management involves monitoring
our sources and uses of funds in order to meet our day-to-day cash flow requirements, while maximizing profits. Liquidity management is made more complicated because different balance sheet components are subject to varying degrees of management
control. For example, the timing of maturities of our investment portfolio is fairly predictable and subject to a high degree of control at the time investment decisions are made. However, net deposit inflows and outflows are far less predictable
and are not subject to the same degree of control.

Our primary sources of liquidity are deposits, borrowings, scheduled repayments on our loans, and
interest on and maturities of our securities. We plan to meet our future cash needs through the liquidation of temporary investments and the generation of deposits. Occasionally, we might sell securities in connection with the management of our
interest sensitivity gap or to manage cash availability. We may also utilize our cash and due from banks, security repurchase agreements, and federal funds sold to meet liquidity requirements as needed. In addition, we have the ability, on a
short-term basis, to purchase federal funds from other financial institutions. As of June 30, 2009, our primary source of liquidity included our securities portfolio, lines of credit available with correspondent banks totaling $14,900,000, and
lines of credit with the Federal Home Loan Bank of Atlanta and with the Federal Reserve Bank of Atlanta. We believe our liquidity levels are adequate to meet our operating needs.

Off-Balance Sheet Risk

Through the operations of the Bank, we have made contractual commitments to extend credit in
the ordinary course of our business activities. These commitments are legally binding agreements to lend money to our customers at predetermined interest rates for a specified period of time. At June 30, 2009, we had issued commitments to
extend credit of approximately $11,179,000 through various types of lending arrangements. We evaluate each customers credit worthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by us upon extension of
credit, is based on our credit evaluation of the borrower. Collateral varies but may include accounts receivable, inventory, property, plant and equipment, and commercial and residential real estate. We manage the credit risk on these commitments by
subjecting them to normal underwriting and risk management processes.

Capital Resources

Total shareholders equity decreased $1,409,879 from $31,483,869 at December 31, 2008 to $30,073,990 at June 30, 2009. During the first quarter of 2009,
the Company injected an additional $500,000 into the Bank to replace depleted reserves and comfortably maintain the Banks lending limit, which in general amounts to 15% of capital and unimpaired surplus.



22



---

##### Table of Contents

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking
agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Banks financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Banks assets, liabilities, and certain off-balance-sheet items as
calculated under regulatory accounting practices. The Banks capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Regardless, the Bank is
well capitalized under these minimum capital requirements as set per bank regulatory agencies.

Under the capital adequacy guidelines,
regulatory capital is classified into two tiers. These guidelines require an institution to maintain a certain level of Tier 1 and Tier 2 capital to risk-weighted assets. Tier 1 capital consists of common shareholders equity, excluding the
unrealized gain or loss on securities available for sale, minus certain intangible assets. In determining the amount of risk-weighted assets, all assets, including certain off-balance sheet assets, are multiplied by a risk-weight factor of 0% to
100% based on the risks believed to be inherent in the type of asset. Tier 2 capital consists of Tier 1 capital plus the general reserve for loan losses, subject to certain limitations. We are also required to maintain capital at a minimum level
based on total average assets, which is known as the Tier 1 leverage ratio.

At the bank level, we are subject to various regulatory capital requirements
administered by the federal banking agencies. To be considered adequately capitalized under these capital guidelines, we must maintain a minimum total risk-based capital of 8%, with at least 4% being Tier 1 capital. In addition, we must
maintain a minimum Tier 1 leverage ratio of at least 4%. To be considered well-capitalized, we must maintain total risk-based capital of at least 10%, Tier 1 capital of at least 6%, and a leverage ratio of at least 5%. For the first
years of operation, during the Banks de novo period, the Bank will be required to maintain a leverage ratio of at least 8%. The Bank exceeded its minimum regulatory capital ratios as of June 30, 2009, as well as the ratios to
be considered well capitalized.

The following table sets forth the Banks various capital ratios at June 30, 2009.



|                          |  |       |  
|------------------------- |  | ----- | -
|                          |  | Bank  |  
|Total risk-based capital  |  | 35.81 | %
|Tier 1 risk-based capital |  | 34.56 | %
|Leverage capital          |  | 28.20 | %

We believe that our capital is sufficient to fund the activities of the Bank in its initial stages of operation
and that the rate of asset growth will not negatively impact the capital base. As of June 30, 2009 there were no significant firm commitments outstanding for capital expenditures.

Critical Accounting Policies

We have adopted various accounting policies, which govern the application of accounting
principles generally accepted in the United States of America in the preparation of our financial statements.

Certain accounting policies involve
significant judgments and assumptions by us that may have a material impact on the carrying value of certain assets and liabilities. We consider such accounting policies to be critical accounting policies. The judgments and assumptions we use are
based on historical experience and other factors, which we believe are reasonable under the circumstances. Because of the nature of the judgments and assumptions we make, actual results could differ from these judgments and estimates that could have
a material impact on the carrying values of our assets and liabilities and our results of operations.

Allowance for Loan Losses. We believe that
the determination of the allowance for loan losses is the critical accounting policy that requires the most significant judgments and estimates used in preparation of our consolidated financial statements. Refer to section Provision and
Allowance for Loan Losses in this Report on Form 10-Q for a more detailed description of the methodology related to the allowance for loan losses.



|Item 3. | Quantitative and Qualitative Disclosure About Market Risk
|------- | ---------------------------------------------------------

Not applicable.



23



---

##### Table of Contents

|Item 4. | Controls and Procedures
|------- | -----------------------

Management has developed and
implemented a policy and procedures for reviewing disclosure controls and procedures and internal controls over financial reporting on a quarterly basis. Management, including the Chief Executive Officer and the Chief Financial Officer, has
evaluated the effectiveness of the design and operation of disclosure controls and procedures as of June 30, 2009 and, based on such evaluation, has concluded that these controls and procedures are effective. Disclosure controls and procedures
are the Companys controls and other procedures that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 (the Exchange
Act) is recorded, processed, summarized and reported, within the time periods specified in the SECs rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by the Company in the reports that it files under the Exchange Act is accumulated and communicated to management including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely
decisions regarding required disclosure.

There were no changes in the Companys internal control over financial reporting during the Companys
last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the Companys internal control over financial reporting.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation.

Part II  Other Information



|Item 1. | Legal Proceedings
|------- | -----------------

There are no pending legal proceedings to
which we are a party or of which any of our property is the subject.



|Item 1A. | Risk Factors
|-------- | ------------

Not applicable.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

None.



|Item 3. | Default Upon Senior Securities
|------- | ------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

The
annual meeting of shareholders was held on May 20, 2009. The following is a summary of the proposals that were submitted to the shareholders for approval and a tabulation of the votes with respect to each proposal.

Proposal 1: To elect six Class 1 directors to hold office until the 2012 Annual Meeting of Shareholders and until their successors are reelected and qualified.



24



---

##### Table of Contents

|                       |  |           |  |        
|---------------------- |  | --------- |  | -------
|Nominee                |  | Votes For |  | Witheld
|Thomas E. Persons, Sr. |  | 2,074,554 |  | 8,000  
|J. Egerton Burroughs   |  | 2,074,554 |  | 8,000  
|Howard R. Greenfield   |  | 2,074,554 |  | 8,000  
|Mukund C. Raja         |  | 2,074,554 |  | 8,000  
|Hasmukh P. Rama        |  | 2,074,554 |  | 8,000  
|William R. Short       |  | 2,074,554 |  | 8,000  

Proposal 2: To ratify the appointment of Mauldin & Jenkins, LLC as our independent registered public
accounting firm for the fiscal year 2009.



|          |  |               |  |          
|--------- |  | ------------- |  | ---------
|Votes For |  | Votes Against |  | Abstained
|2,075,554 |  | 5,000         |  | 2,000    



|Item 5. | Other Information
|------- | -----------------

None.



25



---

##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|     |  |                                                                                                                                                               
|---- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|31.1 |  | Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.                                           
|     | 
|31.2 |  | Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.                                           
|     | 
|32.1 |  | Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.
|     | 
|32.2 |  | Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.



26



---

##### Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|                      |  |  |  |                            |  |                      |  |                                                                                     
|--------------------- |  |  |  | -------------------------- |  | -------------------- |  | ------------------------------------------------------------------------------------
|                      |  |  |  | Touchmark Bancshares, Inc.
|                      |  |  | 
|Date: August 13, 2009 |  |  |  | By:                        |  | /s/ William R. Short
|                      |  |  |  |                            |  |                      |  | William R. Short President and Chief Executive
Officer (Principal Executive Officer)



|                      |  |  |  |     |  |                        |  |                                                                                                          
|--------------------- |  |  |  | --- |  | ---------------------- |  | ---------------------------------------------------------------------------------------------------------
|                      |  |  | 
|Date: August 13, 2009 |  |  |  | By: |  | /s/ Robert D. Koncerak
|                      |  |  |  |     |  |                        |  | Robert D. Koncerak Chief Financial Officer
(Principal Financial Officer and Principal Accounting Officer)



27



---

##### Table of Contents

EXHIBIT INDEX



|               |  |                                                                                                                                                               
|-------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit Number |  | Description                                                                                                                                                   
|               | 
|31.1           |  | Certification of the Chief Executive Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.                                           
|               | 
|31.2           |  | Certification of the Chief Financial Officer, pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.                                           
|               | 
|32.1           |  | Certification of Chief Executive Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.
|               | 
|32.2           |  | Certification of Chief Financial Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934.



28