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| For the fiscal year ended December 31, 2009. |   | Commission File Number 0-32637. |
|----------------------------------------------|--------|---------------------------------|

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| IOWA                                                           | 42-1039071                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |

| 405 FIFTH STREET, AMES, IOWA             | 50010      |
|------------------------------------------|------------|
| (Address of principal executive offices) | (Zip Code) |

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TE

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

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SIN

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|   | - | financing guaranteed under Small Business Administration programs |
|--------|---|-------------------------------------------------------------------|

|   | - | operating and working capital loans |
|--------|---|-------------------------------------|

|   | - | loans to finance equipment and other capital purchases |
|--------|---|--------------------------------------------------------|

|   | - | commercial real estate loans |
|--------|---|------------------------------|

|   | - | business lines of credit |
|--------|---|--------------------------|

|   | - | term loans |
|--------|---|------------|

|   | - | loans to professionals |
|--------|---|------------------------|

|   | - | letters of credit |
|--------|---|-------------------|

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|   | - | automobiles and trucks |
|--------|---|------------------------|

|   | - | boats and recreational vehicles |
|--------|---|---------------------------------|

|   | - | personal loans and lines of credit |
|--------|---|------------------------------------|

|   | - | home equity lines of credit |
|--------|---|-----------------------------|

|   | - | home improvement and rehabilitation loans |
|--------|---|-------------------------------------------|

|   | - | consumer real estate loans |
|--------|---|----------------------------|

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|   | · | Capital Purchase Program (“CPP”).  Pursuant to this program, the US Treasury, on behalf of the US government, will purchase up to $250 billion of preferred stock, along with warrants to purchase common stock, from certain financial institutions, including bank holding companies, savings and loan holding companies and banks or savings associations not controlled by a holding company.  On publically traded financial institutions the investment will have a dividend rate of 5% per year, until the fifth anniversary of the US Treasury’s investment and a dividend of 9% thereafter.   The Company did not participate in the CCP program. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Temporary Liquidity Guarantee Program (“TLGP”).  This program contains both a debt guarantee component, whereby the FDIC will guarantee until June 30, 2012, the senior unsecured debt issued by eligible financial institutions between October 14, 2008 and June 30, 2009, and an account transaction guarantee component, whereby the FDIC will insure 100% of non-interest bearing deposit transaction accounts held at eligible financial institutions, such as payment processing accounts, payroll accounts and working capital accounts, through June 30, 2010.  The Banks have opted out of the debt guarantee component and opted into the transaction guarantee component of this program. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Temporary increase in deposit insurance coverage.  Pursuant to the EESA, the FDIC temporarily raised the basic limit on federal deposit insurance coverage from $100,000 to $250,000 per depositor, effective October 3, 2008.  On January 1, 2014, the standard coverage limit will return to $100,000 for all deposit categories except Certain Retirement Accounts (includes IRAs), which will continue to be insured up to $250,000 per owner. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Name                 |   | Age    |   | Position with the Company or Bank and Principal Occupation and Employment During the Past Five Years                                                                                                                                                                                                                              |
|----------------------|--------|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Kathy L. Baker       |   | 63     |   | Named President and Director of United Bank on  January 1, 2008.  Previously served as a Vice President in the lending department of United Bank.                                                                                                                                                             |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Scott T. Bauer  |   | 47     |   | Named President of First National in 2007.  Previously served as Executive Vice President and Senior Vice President of First National.  Also serves as Director of First National.                                                                                                                            |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Kevin G. Deardorff   |   | 55     |   | Vice President & Technology Director of the Company.                                                                                                                                                                                                                                                                          |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Daniel L. Krieger    |   | 73     |   | Chairman of the Company since 2003 and President of Company from 1997 to 2007. Also serves as a Director of the Company, Chairman of the Board and Trust Officer of First National and Chairman of the Board of Boone Bank.  Previously served as President of First National and Chairman of the Board of United Bank. |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Stephen C. McGill    |   | 55     |   | President of State Bank since 2003.  Previously served as Senior Vice President of State Bank.  Director of State Bank.                                                                                                                                                                                       |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| John P. Nelson       |   | 43     |   | Vice President, Secretary and Treasurer of Company. Also serves as Director of Randall-Story Bank.                                                                                                                                                                                                                                |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Thomas H. Pohlman    |   | 59     |   | Named President of the Company in 2007.  Previously served as Chief Operating Officer of the Company in 2006 and President of First National from 1999 to 2007. Director of the Company and First National, State Bank  and United Bank.                                                                      |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Jeffrey K. Putzier   |   | 48     |   | President of Boone Bank since 1999.   Director of Boone Bank.                                                                                                                                                                                                                                                      |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Richard J. Schreier  |   | 42     |   | Named President of Randall-Story in May, 2008.  Also serves as a director at Randall-Story.   Previously served as Senior Vice President of lending at Randall-Story and State Bank.                                                                                                                     |
|                 |   |   |   |                                                                                                                                                                                                                                                                                                                              |
| Terrill L. Wycoff    |   | 66     |   | Executive Vice President of First National since 2000.Director of First National.                                                                                                                                                                                                                                                 |

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CT

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|   | · | changes in regulations; |
|--------|--------|-------------------------|

|   | · | changes in technology and product delivery systems; and |
|--------|--------|---------------------------------------------------------|

|   | · | the accelerating pace of consolidation among financial services providers. |
|--------|--------|----------------------------------------------------------------------------|

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|   | · | the payment of dividends to the Company’s shareholders; |
|--------|--------|---------------------------------------------------------------|

|   | · | the payment of dividends to the Company from the Banks; |
|--------|--------|---------------------------------------------------------|

|   | · | possible mergers with or acquisitions of or by other institutions; |
|--------|--------|--------------------------------------------------------------------|

|   | · | investment policies; |
|--------|--------|----------------------|

|   | · | loans and interest rates on loans; |
|--------|--------|------------------------------------|

|   | · | interest rates paid on deposits; |
|--------|--------|----------------------------------|

|   | · | expansion of branch offices; and/or |
|--------|--------|-------------------------------------|

|   | · | the possibility to provide or expand securities or trust services. |
|--------|--------|--------------------------------------------------------------------|

ESOL

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EEDIN

SER

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ARK

|    |   | 2009              |   |   |   |   |    |   | 2008              |   |   |   |   |
|---------|--------|-------------------|--------|--------|--------|--------|---------|--------|-------------------|--------|--------|--------|--------|
| Quarter |   | Market Price High |   |   | Low    |   | Quarter |   | Market Price High |   |   | Low    |   |
| 1st     |   | $                 | 28.79  |   |   | $      | 14.87   |   | 1st               |   | $      | 20.95  |   |   | $ | 18.26 |   |
| 2nd     |   | $                 | 27.00  |   |   | $      | 16.68   |   | 2nd               |   | $      | 22.94  |   |   | $ | 15.12 |   |
| 3rd     |   | $                 | 27.00  |   |   | $      | 22.21   |   | 3rd               |   | $      | 42.11  |   |   | $ | 15.60 |   |
| 4th     |   | $                 | 25.00  |   |   | $      | 18.50   |   | 4th               |   | $      | 26.98  |   |   | $ | 20.58 |   |

|    |   | 2009                              |   |   | 2008                              |   |
|---------|--------|-----------------------------------|--------|--------|-----------------------------------|--------|
| Quarter |   | Cash dividends declared per share |   |   | Cash dividends declared per share |   |
| 1st     |   | $                                 | 0.10   |   |                              | $      | 0.28 |   |
| 2nd     |   | $                                 | 0.10   |   |                              | $      | 0.28 |   |
| 3rd     |   | $                                 | 0.10   |   |                              | $      | 0.28 |   |
| 4th     |   | $                                 | 0.10   |   |                              | $      | 0.28 |   |

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ECT

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|                                                         |   | Year Ended December 31, |      |
|--------------------------------------------------------------|--------|-------------------------|-----------|
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |
| (dollars in thousands, except per share amounts)             |   | 2009                    |      |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |
| STATEMENT OF INCOME DATA                                     |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                              |   | $                       | 38,891    |   |   | $ | 45,514 |   |   | $ | 47,562 |   |   | $ | 44,296 |   |   | $ | 41,306 |   |
| Interest expense                                             |   |                    | 10,226    |   |   |   | 16,402 |   |   |   | 23,537 |   |   |   | 21,306 |   |   |   | 15,933 |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                          |   |                    | 28,665    |   |   |   | 29,112 |   |   |   | 24,025 |   |   |   | 22,990 |   |   |   | 25,373 |   |
| Provision (credit) for loan losses                           |   |                    | 1,558     |   |   |   | 1,313 |   |   |   | (94 | ) |   |   | (183 | ) |   |   | 331 |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income after provision (credit) for loan losses |   |                    | 27,107    |   |   |   | 27,799 |   |   |   | 24,119 |   |   |   | 23,173 |   |   |   | 25,042 |   |
| Noninterest income (loss)                                    |   |                    | 6,924     |   |   |   | (3,008 | ) |   |   | 7,208 |   |   |   | 6,674 |   |   |   | 5,613 |   |
| Noninterest expense                                          |   |                    | 22,732    |   |   |   | 17,594 |   |   |   | 16,776 |   |   |   | 15,504 |   |   |   | 15,210 |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before provision for income tax                       |   |                    | 11,299    |   |   |   | 7,197 |   |   |   | 14,551 |   |   |   | 14,343 |   |   |   | 15,445 |   |
| Provision for income tax                                     |   |                    | 2,293     |   |   |   | 845 |   |   |   | 3,542 |   |   |   | 3,399 |   |   |   | 3,836 |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net Income                                                   |   | $                       | 9,006     |   |   | $ | 6,352 |   |   | $ | 11,009 |   |   | $ | 10,944 |   |   | $ | 11,609 |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| DIVIDENDS AND EARNINGS PER SHARE DATA                        |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends declared                                      |   | $                       | 3,773     |   |   | $ | 10,564 |   |   | $ | 10,183 |   |   | $ | 9,801 |   |   | $ | 9,417 |   |
| Cash dividends declared per share                            |   | $                       | 0.40      |   |   | $ | 1.12 |   |   | $ | 1.08 |   |   | $ | 1.04 |   |   | $ | 1.00 |   |
| Basic and diluted earnings per share                         |   | $                       | 0.95      |   |   | $ | 0.67 |   |   | $ | 1.17 |   |   | $ | 1.16 |   |   | $ | 1.23 |   |
| Weighted average shares outstanding                          |   |                    | 9,432,915 |   |   |   | 9,431,393 |   |   |   | 9,427,503 |   |   |   | 9,422,402 |   |   |   | 9,415,599 |   |
|                                                         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| BALANCE SHEET DATA                                           |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                                 |   | $                       | 915,570   |   |   | $ | 858,141 |   |   | $ | 861,591 |   |   | $ | 838,853 |   |   | $ | 819,384 |   |
| Net loans                                                    |   |                    | 415,434   |   |   |   | 452,880 |   |   |   | 463,651 |   |   |   | 429,123 |   |   |   | 440,318 |   |
| Deposits                                                     |   |                    | 722,164   |   |   |   | 664,795 |   |   |   | 690,119 |   |   |   | 680,356 |   |   |   | 668,342 |   |
| Stockholders' equity                                         |   |                    | 112,340   |   |   |   | 103,837 |   |   |   | 110,021 |   |   |   | 112,923 |   |   |   | 109,227 |   |
| Equity to assets ratio                                       |   |                    | 12.27     | % |   |   | 12.10 | % |   |   | 12.77 | % |   |   | 13.46 | % |   |   | 13.33 | % |

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|                                                                                          |   | Year Ended December 31, |    |
|-----------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                          |   | 2009                    |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| FIVE YEAR FINANCIAL PERFORMANCE                                                               |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                    |   | $                       | 9,006   |   |   | $ | 6,352 |   |   | $ | 11,009 |   |   | $ | 10,944 |   |   | $ | 11,609 |   |
| Average assets                                                                                |   |                    | 880,057 |   |   |   | 857,705 |   |   |   | 843,788 |   |   |   | 818,450 |   |   |   | 831,198 |   |
| Average stockholders' equity                                                                  |   |                    | 108,412 |   |   |   | 107,794 |   |   |   | 111,371 |   |   |   | 109,508 |   |   |   | 109,802 |   |
|                                                                                          |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on assets (net income divided by average assets)                                       |   |                    | 1.02    | % |   |   | 0.74 | % |   |   | 1.30 | % |   |   | 1.34 | % |   |   | 1.40 | % |
| Return on equity  (net income divided by average equity)                            |   |                    | 8.31    | % |   |   | 5.89 | % |   |   | 9.89 | % |   |   | 9.99 | % |   |   | 10.57 | % |
| Net interest margin (net interest income divided by average earning assets)                   |   |                    | 3.78    | % |   |   | 3.94 | % |   |   | 3.39 | % |   |   | 3.29 | % |   |   | 3.56 | % |
| Efficiency ratio (noninterest expense divided by noninterest income plus net interest income) |   |                    | 63.87   | % |   |   | 67.40 | % |   |   | 53.71 | % |   |   | 52.27 | % |   |   | 49.09 | % |
| Dividend payout ratio (dividends per share divided by net income per share)                   |   |                    | 42.11   | % |   |   | 167.16 | % |   |   | 92.31 | % |   |   | 89.66 | % |   |   | 81.30 | % |
| Dividend yield (dividends per share divided by closing year-end market price)                 |   |                    | 1.89    | % |   |   | 4.22 | % |   |   | 5.54 | % |   |   | 4.95 | % |   |   | 3.89 | % |
| Equity to assets ratio (average equity divided by average assets)                             |   |                    | 12.32   | % |   |   | 12.57 | % |   |   | 13.20 | % |   |   | 13.38 | % |   |   | 13.21 | % |

AGEM

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|   | · | Challenges |
|--------|--------|------------|

|   | · | Key Performance Indicators |
|--------|--------|----------------------------|

|   | · | Industry Results |
|--------|--------|------------------|

|   | · | Critical Accounting Policies |
|--------|--------|------------------------------|

|   | · | Income Statement Review |
|--------|--------|-------------------------|

|   | · | Balance Sheet Review |
|--------|--------|----------------------|

|   | · | Asset Quality Review and Credit Risk Management |
|--------|--------|-------------------------------------------------|

|   | · | Liquidity and Capital Resources |
|--------|--------|---------------------------------|

|   | · | Interest Rate Risk |
|--------|--------|--------------------|

|   | · | Inflation |
|--------|--------|-----------|

|   | · | Forward-Looking Statements |
|--------|--------|----------------------------|

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|   | · | On July 16, 2008, the Company’s lead bank, First National, entered into an informal Memorandum of Understanding with the Office of the Comptroller of the Currency (the “OCC”) regarding First National’s commercial real estate loan portfolio, including actions to be taken with respect to commercial real estate risk management procedures, credit underwriting and administration, appraisal and evaluation processes, problem loan management, credit risk ratings recognition and loan review procedures.  Since entering into the Memorandum, management has actively pursued the corrective actions required by the Memorandum in an effort to address the deficiencies noted in administration of its commercial real estate loan portfolio.   On January 14, 2010, the OCC terminated the Memorandum of Understanding. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | In March of 2009, the OCC imposed individual minimum capital ratios requiring First National to maintain, on an ongoing basis, Tier One Leverage Capital of 9% of Adjusted Total Assets and Total Risk Based Capital of 11% of Risk Weighted Assets.  As of December 31, 2009, First National exceeded these capital ratios.  Failure to maintain the individual minimum capital ratios could result in additional regulatory action against First National. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company and the Banks have invested in various corporate bonds issued by various companies whose financial condition may further deteriorate, thus requiring additional impairment charges.  Management believes that impairments in the investment portfolio at December 31, 2009 are temporary; however, it is reasonably possible that additional impairment charges may be necessary on investment securities in future periods if financial and economic conditions do not improve or deteriorate further. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Interest rates are likely to increase as the economy continues its gradual recovery and an increasing interest rate environment may present a challenge to the Company.  Increases in interest rates may negatively impact the Company’s net interest margin if interest expense increases more quickly than interest income.  The Company’s earning assets (primarily its loan and investment portfolio) have longer maturities than its interest bearing liabilities (primarily deposits and other borrowings); therefore, in a rising interest rate environment, interest expense may increase more quickly than interest income as the interest bearing liabilities reprice more quickly than earning assets.  In response to this challenge, the Banks model quarterly the changes in income that would result from various changes in interest rates.  Management believes Bank earning assets have the appropriate maturity and repricing characteristics to optimize earnings and the Banks’ interest rate risk positions. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company’s market in central Iowa has numerous banks, credit unions, and investment and insurance companies competing for similar business opportunities.  This competitive environment will continue to put downward pressure on the Banks’ net interest margins and thus affect profitability.  Strategic planning efforts at the Company and Banks continue to focus on capitalizing on the Banks’ strengths in local markets while working to identify opportunities for improvement to gain competitive advantages. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | In 2009, the Company did not recognize net gains in the Company’s equity securities as typically occurred in the past years.  The Company’s equity securities portfolio (excluding the Banks) has been reduced to $4.3 million as of December 31, 2009 in response to the volatility in the stock market. This reduction will likely result in limited securities gains in 2010 when compared to past years.  The Company invests a portion of its’ capital that may be utilized for future expansion in a portfolio of primarily financial and utility stocks.  The Company focuses on stocks that have historically paid dividends in an effort to lessen the negative effects of a bear market.  The strategy, however, did not prove successful in 2009 as problems due to the national recession caused a significant decline in the market value of the Company’s equity securities.  Unrealized losses in the Company’s equity portfolio totaled $1.3 million and $1.0 million (at the holding company level on an unconsolidated basis) as of December 31, 2009 and 2008, respectively.  The Company recognized losses in its equity portfolio of $47,000 during 2009, compared to realized gains of $3.2 million during 2008 (at the holding company level on an unconsolidated basis).  Additionally, the Company recognized no impairment losses in the equity portfolio in 2009 and $8.5 million in 2008.  The losses in 2008 were in connection with the impairment of Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC) preferred stock.  The Company has significantly reduced its exposure to equity securities, although it is possible that the Company may incur impairment losses in 2010 which would have a negative impact on the Company’s earnings for the year. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Loans amounted to $415.4 million and $452.9 million as of December 31, 2009 and 2008, respectively.  The loan portfolio decreased 8.3% during the year ended December 31, 2009.  The decline in the loan portfolio is primarily due to declines in the commercial operating and commercial real estate loan portfolios.  A continued decline in the loan portfolio would have a negative impact on the Company’s earnings for the year. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The economic conditions for commercial real estate developers in the Des Moines metropolitan area deteriorated in 2009 and 2008 and significantly contributed to the Company’s increased level of non-performing loans, other real estate owned and related costs.  During the year ended December 31, 2009, the Company foreclosed on six real estate properties (other real estate owned) totaling $1.8 million in the Des Moines market.  Presently, the Company has $4.7 million in impaired loans with four Des Moines development companies with specific reserves totaling $371,000.  The Company has additional customer relationships with real estate developers in the Des Moines area that may become impaired in the future if economic conditions do not improve or become worse.  The Company has a limited number of such credits and is actively engaged with the customers to minimize credit risk. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Other real estate owned amounted to $10.5 million and $13.3 million as of December 31, 2009 and 2008, respectively.  Other real estate owned costs amounted to $4,198,000, $151,000 and $120,000 for the years ended December 31, 2009, 2008 and 2007, respectively.  Management obtains independent appraisals or performs evaluations to determine that these properties are carried at the lower of the new cost basis or fair value less cost to sell.  It is at least reasonably possible that changes in fair values will occur in the near term and that such changes could have a negative impact on the Company’s earnings. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The FDIC imposes an assessment against all depository institutions for deposit insurance.  Notably, the FDIC has the authority to increase insurance assessments and has increased deposit insurance assessments in 2009.  FDIC insurance assessments amounted to $1,675,000, $243,000 and $159,000 for the years ended December 31, 2009, 2008 and 2007, respectively.   In 2009, 140 banks failed compared to 25 bank failures in 2008 and 3 in 2007. In 2011, the FDIC has a scheduled assessment increase for all FDIC insured institutions.  An increase in FDIC deposit assessments will have a negative impact on the Company’s earnings. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company operates in a highly regulated environment and is subject to extensive regulation, supervision and examination.  Applicable laws and regulations may change, and there is no assurance that such changes will not adversely affect the Company’s business.  In this respect potentially landscape-changing legislative proposals have been introduced in Congress and by regulatory agencies with respect to their respective regulatory powers.  Such regulation and supervision govern the activities in which an institution may engage and are intended primarily for the protection of the Bank, its depositors and the FDIC.  Regulatory authorities have extensive discretion in connection with their supervisory and enforcement activities, including but not limited to the imposition of restrictions on the operation of an institution, the classification of assets by the institution and the adequacy of an institution’s allowance for loan losses.  Any change in such regulation and oversight, whether in the form of restrictions on activities, regulatory policy, regulations, or legislation, including but not limited to changes in the regulations governing banks, could have a material impact on the Company’s operations.  It is unknown at this time to what extent legislation will be passed into law or regulatory proposals will be adopted, or the effect that such passage or adoption will have on the banking industry or the Company. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                |   | Year Ended December 31, |   |
|---------------------|--------|-------------------------|--------|
|                |   | 2009                    |   |   | 2008 |   |   | 2007 |   |
|                |   | Company                 |   |   | Industry |   |   | Company |   |   | Industry |   |   | Company |   |   | Industry |   |
|                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on assets    |   |                    | 1.02   | % |   |   | 0.09 | % |   |   | 0.74 | % |   |   | 0.12 | % |   |   | 1.30 | % |   |   | 0.81 | % |
|                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on equity    |   |                    | 8.31   | % |   |   | 0.90 | % |   |   | 5.89 | % |   |   | 1.24 | % |   |   | 9.89 | % |   |   | 7.75 | % |
|                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin |   |                    | 3.78   | % |   |   | 3.47 | % |   |   | 3.94 | % |   |   | 3.18 | % |   |   | 3.39 | % |   |   | 3.29 | % |
|                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Efficiency ratio    |   |                    | 63.87  | % |   |   | 55.53 | % |   |   | 67.40 | % |   |   | 59.02 | % |   |   | 53.71 | % |   |   | 59.37 | % |
|                |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital ratio       |   |                    | 12.32  | % |   |   | 8.65 | % |   |   | 12.57 | % |   |   | 7.49 | % |   |   | 13.20 | % |   |   | 7.98 | % |

|   | · | Return on Assets |
|--------|--------|------------------|

|   | · | Return on Equity |
|--------|--------|------------------|

|   | · | Net Interest Margin |
|--------|--------|---------------------|

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|   | · | Efficiency Ratio |
|--------|--------|------------------|

|   | · | Capital Ratio |
|--------|--------|---------------|

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| ASSETS                                |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |
|---------------------------------------|--------|-----------------|---------|--------|------------------|--------|--------|-------------|--------|--------|-----------------|--------|--------|------------------|---------|--------|-------------|--------|--------|-----------------|--------|--------|------------------|--------|--------|-------------|---------|
|                                  |   | 2009            |    |   | 2008             |   |   | 2007        |   |
|                                  |   | Average balance |    |   | Revenue/ expense |   |   | Yield/ rate |   |   | Average balance |   |   | Revenue/ expense |    |   | Yield/ rate |   |   | Average balance |   |   | Revenue/ expense |   |   | Yield/ rate |    |
| (dollars in thousands)                |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |
| Interest-earning assets               |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |
| Loans  1                    |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |
| Commercial                            |   | $               | 68,677  |   |             | $      | 3,536  |        |   |   | 5.15            | %      |   | $                | 82,448  |   |        | $      | 4,915  |            |   |   | 5.96             | %      |   | $           | 78,241  |   |   | $ | 6,201 |   |   |   | 7.93 | % |
| Agricultural                          |   |            | 36,351  |   |             |   | 2,196  |        |   |   | 6.04            | %      |   |             | 32,230  |   |        |   | 2,227  |            |   |   | 6.91             | %      |   |        | 31,964  |   |   |   | 2,696 |   |   |   | 8.43 | % |
| Real estate                           |   |            | 304,362 |   |             |   | 18,074 |        |   |   | 5.94            | %      |   |             | 324,863 |   |        |   | 20,754 |            |   |   | 6.39             | %      |   |        | 321,225 |   |   |   | 21,209 |   |   |   | 6.60 | % |
| Consumer and other                    |   |            | 25,078  |   |             |   | 1,407  |        |   |   | 5.61            | %      |   |             | 24,241  |   |        |   | 1,562  |            |   |   | 6.44             | %      |   |        | 22,658  |   |   |   | 1,523 |   |   |   | 6.72 | % |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Total loans (including fees)          |   | $               | 434,468 |   |             | $      | 25,213 |        |   |   | 5.80            | %      |   | $                | 463,782 |   |        | $      | 29,458 |            |   |   | 6.35             | %      |   | $           | 454,088 |   |   | $ | 31,629 |   |   |   | 6.97 | % |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Investment securities                 |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Taxable                               |   |            | 203,735 |   |             |   | 7,967  |        |   |   | 3.91            | %      |   | $                | 196,619 |   |        | $      | 9,813  |            |   |   | 4.99             | %      |   | $           | 198,689 |   |   | $ | 9,393 |   |   |   | 4.73 | % |
| Tax-exempt  2               |   |            | 151,340 |   |             |   | 7,991  |        |   |   | 5.28            | %      |   |             | 140,425 |   |        |   | 8,894  |            |   |   | 6.33             | %      |   |        | 143,623 |   |   |   | 9,395 |   |   |   | 6.54 | % |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Total investment securities           |   | $               | 355,075 |   |             | $      | 15,958 |        |   |   | 4.49            | %      |   | $                | 337,044 |   |        | $      | 18,707 |            |   |   | 5.55             | %      |   | $           | 342,312 |   |   | $ | 18,788 |   |   |   | 5.49 | % |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits with banks  |   |            | 28,159  |   |             |   | 472    |        |   |   | 1.68            | %      |   | $                | 5,053   |   |        | $      | 193    |            |   |   | 3.82             | %      |   | $           | 864     |   |   | $ | 37 |   |   |   | 4.28 | % |
| Federal funds sold                    |   |            | 13,486  |   |             |   | 27     |        |   |   | 0.20            | %      |   |             | 8,918   |   |        |   | 171    |            |   |   | 1.92             | %      |   |        | 4,630   |   |   |   | 233 |   |   |   | 5.03 | % |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Total interest-earning assets         |   | $               | 831,189 |   |             | $      | 41,669 |        |   |   | 5.01            | %      |   | $                | 814,797 |   |        | $      | 48,529 |            |   |   | 5.96             | %      |   | $           | 801,894 |   |   | $ | 50,687 |   |   |   | 6.32 | % |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets            |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Cash and due from banks               |   | $               | 20,720  |   |             |   |   |        |   |   |            |   |   | $                | 19,581  |   |        |   |   |            |   |   |             |   |   | $           | 18,086  |   |   |   |   |   |   |   |   |   |
| Premises and equipment, net           |   |            | 12,216  |   |             |   |   |        |   |   |            |   |   |             | 13,007  |   |        |   |   |            |   |   |             |   |   |        | 13,618  |   |   |   |   |   |   |   |   |   |
| Other, less allowance for loan losses |   |            | 15,932  |   |             |   |   |        |   |   |            |   |   |             | 10,320  |   |        |   |   |            |   |   |             |   |   |        | 10,190  |   |   |   |   |   |   |   |   |   |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| Total noninterest-earning assets      |   | $               | 48,868  |   |             |   |   |        |   |   |            |   |   | $                | 42,908  |   |        |   |   |            |   |   |             |   |   | $           | 41,894  |   |   |   |   |   |   |   |   |   |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
|                                  |   |            |    |   |             |   |   |        |   |   |            |   |   |             |    |   |        |   |   |            |   |   |             |   |   |        |    |   |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                          |   | $               | 880,057 |   |             |   |   |        |   |   |            |   |   | $                | 857,705 |   |        |   |   |            |   |   |             |   |   | $           | 843,788 |   |   |   |   |   |   |   |   |   |

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|                                     |   | 2009            |    |   | 2008             |   |   | 2007        |   |
|------------------------------------------|--------|-----------------|---------|--------|------------------|--------|--------|-------------|--------|
|                                     |   | Average balance |    |   | Revenue/ expense |   |   | Yield/ rate |   |   | Average balance |   |   | Revenue/ expense |   |   | Yield/ rate |   |   | Average balance |   |   | Revenue/ expense |   |   | Yield/ rate |   |
| (dollars in thousands)                   |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities             |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                 |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings, NOW accounts, and money markets |   | $               | 355,504 |   |             | $      | 1,650  |        |   |   | 0.46 | % |   | $ | 317,346 |   |   | $ | 3,658 |   |   |   | 1.15 | % |   | $ | 309,787 |   |   | $ | 7,734 |   |   |   | 2.50 | % |
| Time deposits < $100,000              |   |            | 157,749 |   |             |   | 4,488  |        |   |   | 2.84 | % |   |   | 170,223 |   |   |   | 6,603 |   |   |   | 3.88 | % |   |   | 179,740 |   |   |   | 7,996 |   |   |   | 4.45 | % |
| Time deposits > $100,000              |   |            | 84,786  |   |             |   | 2,290  |        |   |   | 2.70 | % |   |   | 97,193 |   |   |   | 3,947 |   |   |   | 4.06 | % |   |   | 107,600 |   |   |   | 5,325 |   |   |   | 4.95 | % |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits                           |   | $               | 598,040 |   |             | $      | 8,428  |        |   |   | 1.41 | % |   | $ | 584,762 |   |   | $ | 14,208 |   |   |   | 2.43 | % |   | $ | 597,127 |   |   | $ | 21,055 |   |   |   | 3.53 | % |
| Other borrowed funds                     |   |            | 83,841  |   |             |   | 1,798  |        |   |   | 2.14 | % |   |   | 78,764 |   |   |   | 2,194 |   |   |   | 2.79 | % |   |   | 57,047 |   |   |   | 2,482 |   |   |   | 4.35 | % |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest-bearing liabilities       |   | $               | 681,881 |   |             | $      | 10,226 |        |   |   | 1.50 | % |   | $ | 663,526 |   |   | $ | 16,402 |   |   |   | 2.47 | % |   | $ | 654,174 |   |   | $ | 23,537 |   |   |   | 3.60 | % |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities          |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                          |   |            | 84,245  |   |             |   |   |        |   |   |   |   |   |   | 78,033 |   |   |   |   |   |   |   |   |   |   |   | 70,459 |   |   |   |   |   |   |   |   |   |
| Other liabilities                        |   |            | 5,519   |   |             |   |   |        |   |   |   |   |   |   | 8,352 |   |   |   |   |   |   |   |   |   |   |   | 7,784 |   |   |   |   |   |   |   |   |   |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                     |   |            | 108,412 |   |             |   |   |        |   |   |   |   |   |   | 107,794 |   |   |   |   |   |   |   |   |   |   |   | 111,371 |   |   |   |   |   |   |   |   |   |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND                    |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                     |   | $               | 880,057 |   |             |   |   |        |   |   |   |   |   | $ | 857,705 |   |   |   |   |   |   |   |   |   |   | $ | 843,788 |   |   |   |   |   |   |   |   |   |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                      |   |            |    |   |             | $      | 31,443 |        |   |   | 3.78 | % |   |   |   |   |   | $ | 32,127 |   |   |   | 3.94 | % |   |   |   |   |   | $ | 27,150 |   |   |   | 3.39 | % |
|                                     |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Spread Analysis                          |   |            |    |   |             |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income/average assets           |   |            |    |   |             | $      | 41,669 |        |   |   | 4.73 | % |   |   |   |   |   | $ | 48,529 |   |   |   | 5.66 | % |   |   |   |   |   | $ | 50,687 |   |   |   | 6.01 | % |
| Interest expense/average assets          |   |            |    |   |             |   | 10,226 |        |   |   | 1.16 | % |   |   |   |   |   |   | 16,402 |   |   |   | 1.91 | % |   |   |   |   |   |   | 23,537 |   |   |   | 2.79 | % |
| Net interest income/average assets       |   |            |    |   |             |   | 31,443 |        |   |   | 3.57 | % |   |   |   |   |   |   | 32,127 |   |   |   | 3.75 | % |   |   |   |   |   |   | 27,150 |   |   |   | 3.22 | % |

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|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |
|------------------------------------------|--------|-----------------------|--------|--------|-----------------------|--------|--------|--------------|--------|--------|--------|--------|--------|--------|--------|--------|--------------|--------|
|                                     |   | 2009 Compared to 2008 |   |   | 2008 Compared to 2007 |   |
| (dollars in thousands)                   |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |
|                                     |   | Volume                |   |   | Rate                  |   |   | Total 1 |   |   | Volume |   |   | Rate   |   |   | Total 1 |   |
| Interest income                          |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |
| Loans                                    |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |
| Commercial                               |   | $                     | (761   | )      |                  | $      | (618   | )            |   | $      | (1,379 | )      |   | $      | 320    |   |         | $      | (1,606 | ) |   | $ | (1,286 | ) |
| Agricultural                             |   |                  | 267    |   |                  |   | (298   | )            |   |   | (31    | )      |   |   | 22     |   |         |   | (491 | ) |   |   | (469 | ) |
| Real estate                              |   |                  | (1,266 | )      |                  |   | (1,414 | )            |   |   | (2,680 | )      |   |   | 235    |   |         |   | (690 | ) |   |   | (455 | ) |
| Consumer and other                       |   |                  | 52     |   |                  |   | (207   | )            |   |   | (155   | )      |   |   | 103    |   |         |   | (64 | ) |   |   | 39 |   |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Total loans (including fees)             |   |                  | (1,708 | )      |                  |   | (2,537 | )            |   |   | (4,245 | )      |   |   | 680    |   |         |   | (2,851 | ) |   |   | (2,171 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Investment securities                    |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Taxable                                  |   |                  | 344    |   |                  |   | (2,190 | )            |   |   | (1,846 | )      |   |   | (98    | )      |         |   | 518 |   |   |   | 420 |   |
| Tax-exempt                               |   |                  | 653    |   |                  |   | (1,556 | )            |   |   | (903   | )      |   |   | (205   | )      |         |   | (296 | ) |   |   | (501 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Total investment securities              |   |                  | 997    |   |                  |   | (3,746 | )            |   |   | (2,749 | )      |   |   | (303   | )      |         |   | 222 |   |   |   | (81 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Interest bearing deposits with banks     |   |                  | 441    |   |                  |   | (162   | )            |   |   | 279    |   |   |   | 160    |   |         |   | (4 | ) |   |   | 156 |   |
| Federal funds sold                       |   |                  | 59     |   |                  |   | (203   | )            |   |   | (144   | )      |   |   | 136    |   |         |   | (198 | ) |   |   | (62 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Total interest-earning assets            |   |                  | (211   | )      |                  |   | (6,649 | )            |   |   | (6,860 | )      |   |   | 673    |   |         |   | (2,831 | ) |   |   | (2,158 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Interest-bearing liabilities             |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Deposits                                 |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Savings, NOW accounts, and money markets |   |                  | 396    |   |                  |   | (2,404 | )            |   |   | (2,008 | )      |   |   | 185    |   |         |   | (4,261 | ) |   |   | (4,076 | ) |
| Time deposits < $100,000              |   |                  | (454   | )      |                  |   | (1,661 | )            |   |   | (2,115 | )      |   |   | (408   | )      |         |   | (985 | ) |   |   | (1,393 | ) |
| Time deposits > $100,000              |   |                  | (457   | )      |                  |   | (1,200 | )            |   |   | (1,657 | )      |   |   | (482   | )      |         |   | (896 | ) |   |   | (1,378 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Total deposits                           |   |                  | (515   | )      |                  |   | (5,265 | )            |   |   | (5,780 | )      |   |   | (705   | )      |         |   | (6,142 | ) |   |   | (6,847 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Other borrowed funds                     |   |                  | 136    |   |                  |   | (532   | )            |   |   | (396   | )      |   |   | 768    |   |         |   | (1,056 | ) |   |   | (288 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Total interest-bearing liabilities       |   |                  | (379   | )      |                  |   | (5,797 | )            |   |   | (6,176 | )      |   |   | 63     |   |         |   | (7,198 | ) |   |   | (7,135 | ) |
|                                     |   |                  |   |   |                  |   |   |         |   |   |   |   |   |   |   |   |         |   |   |   |   |   |   |   |
| Net interest income-earning assets       |   | $                     | 168    |   |                  | $      | (852   | )            |   | $      | (684   | )      |   | $      | 644    |   |         | $      | 4,333 |   |   | $ | 4,977 |   |

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|                             |   | 2009   |    |   | 2008   |   |    | 2007   |   |   | 2006    |   |   | 2005   |    |
|----------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| (dollars in thousands)           |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Real Estate                      |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Construction                     |   | $      | 22,864  |   |   | $      | 35,326  |   |   | $      | 46,568  |   |   | $      | 30,600  |   |   | $ | 23,973 |   |
| 1-4 family residential           |   |   | 91,673  |   |   |   | 95,988  |   |   |   | 104,762 |   |   |   | 103,620 |   |   |   | 102,043 |   |
| Commercial                       |   |   | 141,741 |   |   |   | 153,366 |   |   |   | 147,023 |   |   |   | 139,149 |   |   |   | 153,920 |   |
| Agricultural                     |   |   | 30,788  |   |   |   | 33,547  |   |   |   | 33,684  |   |   |   | 31,092  |   |   |   | 30,606 |   |
| Commercial                       |   |   | 69,031  |   |   |   | 76,653  |   |   |   | 78,616  |   |   |   | 73,760  |   |   |   | 71,430 |   |
| Agricultural                     |   |   | 42,356  |   |   |   | 40,324  |   |   |   | 36,133  |   |   |   | 33,434  |   |   |   | 32,216 |   |
| Consumer and other               |   |   | 24,693  |   |   |   | 24,528  |   |   |   | 22,782  |   |   |   | 24,276  |   |   |   | 33,340 |   |
|                             |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total loans                      |   |   | 423,146 |   |   |   | 459,732 |   |   |   | 469,568 |   |   |   | 435,931 |   |   |   | 447,528 |   |
| Deferred loan fees, net          |   |   | 60      |   |   |   | 72      |   |   |   | 137     |   |   |   | 276     |   |   |   | 445 |   |
|                             |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total loans net of deferred fees |   | $      | 423,086 |   |   | $      | 459,660 |   |   | $      | 469,431 |   |   | $      | 435,655 |   |   | $ | 447,083 |   |

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|                   |   | Within one year |    |   | After one year but within five years |   |    | After five years |   |   | Total  |   |
|------------------------|--------|-----------------|---------|--------|--------------------------------------|--------|---------|------------------|--------|--------|--------|--------|
| (dollars in thousands) |   |            |    |   |                                 |   |    |             |   |   |   |   |
|                   |   |            |    |   |                                 |   |    |             |   |   |   |   |
| Real Estate            |   |            |    |   |                                 |   |    |             |   |   |   |   |
| Construction           |   | $               | 16,156  |   |                                 | $      | 6,532   |             |   | $      | 176    |   |   | $ | 22,864 |   |
| 1-4 family residential |   |            | 24,089  |   |                                 |   | 58,055  |             |   |   | 9,529  |   |   |   | 91,673 |   |
| Commercial             |   |            | 31,818  |   |                                 |   | 94,833  |             |   |   | 15,090 |   |   |   | 141,741 |   |
| Agricultural           |   |            | 8,651   |   |                                 |   | 16,689  |             |   |   | 5,448  |   |   |   | 30,788 |   |
| Commercial             |   |            | 26,467  |   |                                 |   | 41,674  |             |   |   | 890    |   |   |   | 69,031 |   |
| Agricultural           |   |            | 28,055  |   |                                 |   | 13,419  |             |   |   | 882    |   |   |   | 42,356 |   |
| Consumer and other     |   |            | 3,447   |   |                                 |   | 16,400  |             |   |   | 4,846  |   |   |   | 24,693 |   |
|                   |   |            |    |   |                                 |   |    |             |   |   |   |   |   |   |   |   |
| Total loans            |   | $               | 138,683 |   |                                 | $      | 247,602 |             |   | $      | 36,861 |   |   | $ | 423,146 |   |

|                                 |   | After one year but within five years |    |   | After five years |   |
|--------------------------------------|--------|--------------------------------------|---------|--------|------------------|--------|
|                                 |   |                                 |    |   |             |   |
| Loan maturities after one year with: |   |                                 |    |   |             |   |
| Fixed rates                          |   | $                                    | 174,541 |   |             | $      | 29,472 |   |
| Variable rates                       |   |                                 | 73,061  |   |             |   | 7,389 |   |
|                                 |   |                                 |    |   |             |   |   |   |
|                                 |   | $                                    | 247,602 |   |             | $      | 36,861 |   |

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|                                       |   | 2009   |    |   | 2008   |   |    | 2007   |   |
|--------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|
| (dollars in thousands)                     |   |   |    |   |   |   |    |   |   |
|                                       |   |   |    |   |   |   |    |   |   |
| U.S. treasury securities                   |   | $      | 525     |   |   | $      | 546     |   |   | $ | 524 |   |
| U.S. government agencies                   |   |   | 106,640 |   |   |   | 49,695  |   |   |   | 95,597 |   |
| U.S. government mortgage-backed securities |   |   | 101,590 |   |   |   | 67,516  |   |   |   | 26,877 |   |
| State and political subdivisions           |   |   | 178,052 |   |   |   | 128,741 |   |   |   | 133,283 |   |
| Corporate bonds                            |   |   | 24,300  |   |   |   | 55,237  |   |   |   | 64,953 |   |
| Equity securities                          |   |   | 7,548   |   |   |   | 11,279  |   |   |   | 18,708 |   |
|                                       |   |   |    |   |   |   |    |   |   |   |   |   |
| Total                                      |   | $      | 418,655 |   |   | $      | 313,014 |   |   | $ | 339,942 |   |

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|                                       |   | Within one year |   |   | After one year but within five years |   |    | After five years but within ten years |   |   | After ten years |   |   | Total  |   |
|--------------------------------------------|--------|-----------------|--------|--------|--------------------------------------|--------|---------|---------------------------------------|--------|--------|-----------------|--------|--------|--------|--------|
| (dollars in thousands)                     |   |            |   |   |                                 |   |    |                                  |   |   |            |   |   |   |   |
|                                       |   |            |   |   |                                 |   |    |                                  |   |   |            |   |   |   |   |
| U.S. treasury securities                   |   | $               | -      |   |                                 | $      | 525     |                                  |   | $      | -               |   |   | $      | -      |   |   | $ | 525 |   |
| U.S. government agencies                   |   |            | 7,051  |   |                                 |   | 80,239  |                                  |   |   | 18,071          |   |   |   | 1,279  |   |   |   | 106,640 |   |
| U.S. government mortgage-backed securities |   |            | 5,906  |   |                                 |   | 91,609  |                                  |   |   | 3,398           |   |   |   | 677    |   |   |   | 101,590 |   |
| States and political subdivisions          |   |            | 14,653 |   |                                 |   | 91,701  |                                  |   |   | 61,744          |   |   |   | 9,954  |   |   |   | 178,052 |   |
| Corporate bonds                            |   |            | 4,050  |   |                                 |   | 14,651  |                                  |   |   | 5,599           |   |   |   | -      |   |   |   | 24,300 |   |
|                                       |   |            |   |   |                                 |   |    |                                  |   |   |            |   |   |   |   |   |   |   |   |   |
| Total                                      |   | $               | 31,660 |   |                                 | $      | 278,725 |                                  |   | $      | 88,812          |   |   | $      | 11,910 |   |   | $ | 411,107 |   |
|                                       |   |            |   |   |                                 |   |    |                                  |   |   |            |   |   |   |   |   |   |   |   |   |
| Weighted average yield                     |   |            |   |   |                                 |   |    |                                  |   |   |            |   |   |   |   |   |   |   |   |   |
| U.S. treasury                              |   |            | 0.00   | %      |                                 |   | 5.20    | %                                     |   |   | 0.00            | %      |   |   | 0.00   | % |   |   | 5.20 | % |
| U.S. government agencies                   |   |            | 2.96   | %      |                                 |   | 2.44    | %                                     |   |   | 3.25            | %      |   |   | 4.79   | % |   |   | 2.64 | % |
| U.S government mortgage-backed securitites |   |            | 3.64   | %      |                                 |   | 3.83    | %                                     |   |   | 4.23            | %      |   |   | 2.47   | % |   |   | 3.83 | % |
| States and political subdivisions*         |   |            | 4.45   | %      |                                 |   | 4.72    | %                                     |   |   | 5.76            | %      |   |   | 6.09   | % |   |   | 5.07 | % |
| Corporate bonds                            |   |            | 4.51   | %      |                                 |   | 3.53    | %                                     |   |   | 5.44            | %      |   |   | 0.00   | % |   |   | 4.45 | % |
|                                       |   |            |   |   |                                 |   |    |                                  |   |   |            |   |   |   |   |   |   |   |   |   |
| Total                                      |   |            | 3.97   | %      |                                 |   | 3.60    | %                                     |   |   | 5.16            | %      |   |   | 5.75   | % |   |   | 4.09 | % |

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|                                |   | 2009           |    |   | 2008         |   |   | 2007           |   |
|-------------------------------------|--------|----------------|---------|--------|--------------|--------|--------|----------------|--------|
|                                |   | Average Amount |    |   | Average Rate |   |   | Average Amount |   |   | Average Rate |   |   | Average Amount |   |   | Average Rate |   |
| (dollars in thousands)              |   |           |    |   |         |   |   |           |   |   |   |   |   |   |   |   |   |   |
|                                |   |           |    |   |         |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Noninterest bearing demand deposits |   | $              | 84,245  |   |         |   | 0.00   | %              |   | $ | 78,033 |   |   |   | 0.00 | % |   | $ | 70,459 |   |   |   | 0.00 | % |
| Interest bearing demand deposits    |   |           | 174,716 |   |         |   | 0.42   | %              |   |   | 155,689 |   |   |   | 0.96 | % |   |   | 152,898 |   |   |   | 2.29 | % |
| Money market deposits               |   |           | 147,782 |   |         |   | 0.54   | %              |   |   | 134,295 |   |   |   | 1.53 | % |   |   | 130,548 |   |   |   | 3.06 | % |
| Savings deposits                    |   |           | 33,007  |   |         |   | 0.34   | %              |   |   | 27,362 |   |   |   | 0.40 | % |   |   | 26,341 |   |   |   | 0.86 | % |
| Time certificates < $100,000     |   |           | 157,749 |   |         |   | 2.84   | %              |   |   | 170,223 |   |   |   | 3.88 | % |   |   | 179,740 |   |   |   | 4.45 | % |
| Time certificates > $100,000     |   |           | 84,786  |   |         |   | 2.70   | %              |   |   | 97,193 |   |   |   | 4.06 | % |   |   | 107,600 |   |   |   | 4.95 | % |
|                                |   |           |    |   |         |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   | $              | 682,285 |   |         |   |   |           |   | $ | 662,795 |   |   |   |   |   |   | $ | 667,586 |   |   |   |   |   |

|                      |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (dollars in thousands)    |   |   |   |   |   |   |   |   |   |
| 3 months or less          |   | $      | 17,814 |   |   | $      | 18,808 |   |   | $ | 31,926 |   |
| Over 3 through 12 months  |   |   | 45,007 |   |   |   | 38,589 |   |   |   | 50,646 |   |
| Over 12 through 36 months |   |   | 20,752 |   |   |   | 20,987 |   |   |   | 23,723 |   |
| Over 36 months            |   |   | 3,481  |   |   |   | 2,995  |   |   |   | 2,894 |   |
|                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                     |   | $      | 87,054 |   |   | $      | 81,379 |   |   | $ | 109,189 |   |

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|                                              |   | 2009    |   |   | 2008         |   |   | 2007    |   |
|---------------------------------------------------|--------|---------|--------|--------|--------------|--------|--------|---------|--------|
|                                              |   | Balance |   |   | Average Rate |   |   | Balance |   |   | Average Rate |   |   | Balance |   |   | Average Rate |   |
| (dollars in thousands)                            |   |    |   |   |         |   |   |    |   |   |   |   |   |   |   |   |   |   |
|                                              |   |    |   |   |         |   |   |    |   |   |   |   |   |   |   |   |   |   |
| Federal funds purchased and repurchase agreements |   | $       | 40,490 |   |         |   | 0.64   | %       |   | $ | 38,510 |   |   |   | 1.30 | % |   | $ | 30,033 |   |   |   | 3.39 | % |
|                                              |   |    |   |   |         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other short-term borrowings                       |   |    | 139    |   |         |   | 0.00   | %       |   |   | 1,064 |   |   |   | 0.00 | % |   |   | 737 |   |   |   | 4.94 | % |
|                                              |   |    |   |   |         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB term advances                                |   |    | 16,500 |   |         |   | 3.12   | %       |   |   | 23,500 |   |   |   | 2.90 | % |   |   | 4,000 |   |   |   | 4.67 | % |
|                                              |   |    |   |   |         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Term repurchase agreements                        |   |    | 20,000 |   |         |   | 3.77   | %       |   |   | 20,000 |   |   |   | 3.77 | % |   |   | 20,000 |   |   |   | 4.24 | % |
|                                              |   |    |   |   |         |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                             |   | $       | 77,129 |   |         |   | 1.98   | %       |   | $ | 83,074 |   |   |   | 2.33 | % |   | $ | 54,770 |   |   |   | 3.81 | % |

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|                                                |   | 2009            |   |   | 2008         |   |   | 2007            |   |
|-----------------------------------------------------|--------|-----------------|--------|--------|--------------|--------|--------|-----------------|--------|
|                                                |   | Average Balance |   |   | Average Rate |   |   | Average Balance |   |   | Average Rate |   |   | Average Balance |   |   | Average Rate |   |
| (dollars in thousands)                              |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |
| Federal funds purchased & repurchase agreements |   | $               | 42,795 |   |         |   | 0.92   | %               |   | $ | 40,340 |   |   |   | 2.11 | % |   | $ | 46,447 |   |   |   | 4.28 | % |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other short-term borrowings                         |   |            | 616    |   |         |   | 0.00   | %               |   |   | 689 |   |   |   | 1.89 | % |   |   | 967 |   |   |   | 5.86 | % |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB term advances                                  |   |            | 20,430 |   |         |   | 3.11   | %               |   |   | 17,735 |   |   |   | 3.34 | % |   |   | 2,414 |   |   |   | 4.97 | % |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Term repurchase agreements                          |   |            | 20,000 |   |         |   | 3.85   | %               |   |   | 20,000 |   |   |   | 3.69 | % |   |   | 7,219 |   |   |   | 4.42 | % |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                               |   | $               | 83,841 |   |         |   | 2.14   | %               |   | $ | 78,764 |   |   |   | 2.79 | % |   | $ | 57,047 |   |   |   | 4.35 | % |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Maximum Amount Outstanding during the Year          |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds purchased and repurchase agreements   |   | $               | 50,493 |   |         |   |   |            |   | $ | 48,699 |   |   |   |   |   |   | $ | 58,457 |   |   |   |   |   |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other short-term borrowings                         |   | $               | 3,053  |   |         |   |   |            |   | $ | 1,351 |   |   |   |   |   |   | $ | 1,684 |   |   |   |   |   |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| FHLB term advances                                  |   | $               | 23,500 |   |         |   |   |            |   | $ | 23,500 |   |   |   |   |   |   | $ | 4,000 |   |   |   |   |   |
|                                                |   |            |   |   |         |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Term repurchase agreements                          |   | $               | 20,000 |   |         |   |   |            |   | $ | 20,000 |   |   |   |   |   |   | $ | 24,000 |   |   |   |   |   |

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|                                                                       |   |   |    |   | Payments due by period |   |
|----------------------------------------------------------------------------|--------|--------|---------|--------|------------------------|--------|
|                                                                       |   |   |    |   | Less than              |   |   | 1-3 |   |   | 3-5 |   |   | More than |   |
| Contractual Obligations                                                    |   | Total  |    |   | 1 year                 |   |   | years |   |   | years |   |   | 5 years |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                   |   | $      | 722,164 |   |                   | $      | 644,547 |   |   | $ | 63,289 |   |   | $ | 14,328 |   |   | $ | - |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal funds purchased and securities sold under agreements to repurchase |   |   | 40,490  |   |                   |   | 40,490 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other short-term borrowings                                                |   |   | 139     |   |                   |   | 139 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term borrowings                                                       |   |   | 36,500  |   |                   |   | 1,500 |   |   |   | 9,500 |   |   |   | 1,000 |   |   |   | 24,500 |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating lease obligation                                                 |   |   | 41      |   |                   |   | 14 |   |   |   | 16 |   |   |   | 11 |   |   |   | - |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase obligations (1)                                                   |   |   | 3,088   |   |                   |   | 672 |   |   |   | 1,344 |   |   |   | 1,072 |   |   |   | - |   |
|                                                                       |   |   |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                                      |   | $      | 802,422 |   |                   | $      | 687,362 |   |   | $ | 74,149 |   |   | $ | 16,411 |   |   | $ | 24,500 |   |

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|                           |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (dollars in thousands)         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing assets:         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Nonaccrual loans               |   | $      | 10,187 |   |   | $      | 6,339  |   |   | $      | 3,249  |   |   | $      | 291    |   |   | $ | 606 |   |
| Loans 90 days or more past due |   |   | 121    |   |   |   | 469    |   |   |   | 1,300  |   |   |   | 758    |   |   |   | 83 |   |
|                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                    |   |   | 10,308 |   |   |   | 6,808  |   |   |   | 4,549  |   |   |   | 1,049  |   |   |   | 689 |   |
| Securities available-for-sale  |   |   | 660    |   |   |   | 358    |   |   |   | -      |   |   |   | -      |   |   |   | - |   |
| Other real estate owned        |   |   | 10,480 |   |   |   | 13,334 |   |   |   | 2,846  |   |   |   | 2,808  |   |   |   | 1,742 |   |
|                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing assets    |   | $      | 21,448 |   |   | $      | 20,500 |   |   | $      | 7,395  |   |   | $      | 3,857  |   |   | $ | 2,431 |   |

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|                                                                    |   | 2009   |    |   | 2008   |   |    | 2007   |   |   | 2006    |   |   | 2005   |    |
|-------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|---------|
| (dollars in thousands)                                                  |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |
| Balance at beginning of period                                          |   | $      | 6,779   |   |   | $      | 5,781   |   |   | $      | 6,533   |   |   | $      | 6,765   |   |   | $ | 6,476 |   |
| Charge-offs:                                                            |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Real Estate                                                             |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Construction                                                            |   |   | 105     |   |   |   | 76      |   |   |   | 402     |   |   |   | -       |   |   |   | - |   |
| 1-4 Family Residential                                                  |   |   | 155     |   |   |   | 89      |   |   |   | 1       |   |   |   | 6       |   |   |   | - |   |
| Commercial                                                              |   |   | 415     |   |   |   | 70      |   |   |   | 25      |   |   |   | -       |   |   |   | 28 |   |
| Agricultural                                                            |   |   | 15      |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Commercial                                                              |   |   | 54      |   |   |   | 77      |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Agricultural                                                            |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Consumer and other                                                      |   |   | 122     |   |   |   | 115     |   |   |   | 299     |   |   |   | 99      |   |   |   | 119 |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total Charge-offs                                                       |   |   | 866     |   |   |   | 427     |   |   |   | 727     |   |   |   | 105     |   |   |   | 147 |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Recoveries:                                                             |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Real Estate                                                             |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Construction                                                            |   |   | 6       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| 1-4 Family Residential                                                  |   |   | 27      |   |   |   | 3       |   |   |   | 1       |   |   |   | 1       |   |   |   | - |   |
| Commercial                                                              |   |   | 98      |   |   |   | 1       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Agricultural                                                            |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Commercial                                                              |   |   | 3       |   |   |   | 35      |   |   |   | 21      |   |   |   | 6       |   |   |   | 33 |   |
| Agricultural                                                            |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | -       |   |   |   | - |   |
| Consumer and other                                                      |   |   | 47      |   |   |   | 73      |   |   |   | 47      |   |   |   | 49      |   |   |   | 72 |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Total Recoveries                                                        |   |   | 181     |   |   |   | 112     |   |   |   | 69      |   |   |   | 56      |   |   |   | 105 |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Net charge-offs                                                         |   |   | 685     |   |   |   | 315     |   |   |   | 658     |   |   |   | 49      |   |   |   | 42 |   |
| Provisions charged (credited) to operations                             |   |   | 1,558   |   |   |   | 1,313   |   |   |   | (94     | )      |   |   | (183    | ) |   |   | 331 |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Balance at end of period                                                |   | $      | 7,652   |   |   | $      | 6,779   |   |   | $      | 5,781   |   |   | $      | 6,533   |   |   | $ | 6,765 |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Average Loans Outstanding                                               |   | $      | 434,468 |   |   | $      | 463,782 |   |   | $      | 454,088 |   |   | $      | 438,166 |   |   | $ | 435,997 |   |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Ratio of net charge-offs during the period to average loans outstanding |   |   | 0.16    | %      |   |   | 0.07    | %      |   |   | 0.14    | %      |   |   | 0.01    | % |   |   | 0.01 | % |
|                                                                    |   |   |    |   |   |   |    |   |   |   |    |   |   |   |    |   |   |   |   |   |
| Ratio of allowance for loan losses to total loans net of deferred fees  |   |   | 1.81    | %      |   |   | 1.47    | %      |   |   | 1.23    | %      |   |   | 1.50    | % |   |   | 1.51 | % |

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|                                    |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |   | 2005   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| (dollars in thousands)                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   | Amount |   |   |   | %      | *      |   | Amount |   |   |   | %      | *      |   | Amount |   |   |   | % | * |   | Amount |   |   |   | % | * |   | Amount |   |   |   | % | * |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of period applicable to: |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real Estate                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction                            |   | $      | 1,040  |   |   |   | 5.40   | %      |   | $      | 472    |   |   |   | 7.68   | % |   | $ | 733 |   |   |   | 9.92 | % |   | $ | 372 |   |   |   | 7.02 | % |   | $ | 258 |   |   |   | 5.36 | % |
| 1-4 family residential                  |   |   | 1,133  |   |   |   | 21.66  | %      |   |   | 1,001  |   |   |   | 20.88  | % |   |   | 1,061 |   |   |   | 22.31 | % |   |   | 1,231 |   |   |   | 23.77 | % |   |   | 1,127 |   |   |   | 22.80 | % |
| Commercial                              |   |   | 2,683  |   |   |   | 33.50  | %      |   |   | 3,566  |   |   |   | 33.36  | % |   |   | 1,964 |   |   |   | 31.31 | % |   |   | 2,396 |   |   |   | 31.92 | % |   |   | 2,534 |   |   |   | 34.39 | % |
| Agricultural                            |   |   | 523    |   |   |   | 7.28   | %      |   |   | 395    |   |   |   | 7.30   | % |   |   | 407 |   |   |   | 7.17 | % |   |   | 428 |   |   |   | 7.13 | % |   |   | 421 |   |   |   | 6.84 | % |
| Commercial                              |   |   | 1,199  |   |   |   | 16.31  | %      |   |   | 683    |   |   |   | 16.67  | % |   |   | 943 |   |   |   | 16.74 | % |   |   | 983 |   |   |   | 16.92 | % |   |   | 1,158 |   |   |   | 15.96 | % |
| Agricultural                            |   |   | 642    |   |   |   | 10.01  | %      |   |   | 469    |   |   |   | 8.77   | % |   |   | 466 |   |   |   | 7.69 | % |   |   | 499 |   |   |   | 7.67 | % |   |   | 511 |   |   |   | 7.20 | % |
| Consumer and other                      |   |   | 432    |   |   |   | 5.84   | %      |   |   | 193    |   |   |   | 5.34   | % |   |   | 207 |   |   |   | 4.85 | % |   |   | 276 |   |   |   | 5.57 | % |   |   | 390 |   |   |   | 7.45 | % |
| Unallocated                             |   |   | -      |   |   |   |   |   |   |   | -      |   |   |   |   |   |   |   | - |   |   |   |   |   |   |   | 348 |   |   |   |   |   |   |   | 366 |   |   |   |   |   |
|                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   | $      | 7,652  |   |   |   | 100    | %      |   | $      | 6,779  |   |   |   | 100    | % |   | $ | 5,781 |   |   |   | 100 | % |   | $ | 6,533 |   |   |   | 100 | % |   | $ | 6,765 |   |   |   | 100 | % |

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|   | · | Review of the Company’s Current Liquidity Sources |
|--------|--------|---------------------------------------------------------|

|   | · | Review of the Consolidated Statements of Cash Flows |
|--------|--------|-----------------------------------------------------|

|   | · | Review of Company Only Cash Flows |
|--------|--------|-----------------------------------|

|   | · | Review of Commitments for Capital Expenditures, Cash Flow Uncertainties and Known Trends in Liquidity and Cash Flow Needs |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | Capital Resources |
|--------|--------|-------------------|

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|   | · | Local, regional and national economic conditions and the impact they may have on us and our customers, and our assessment of that impact on our estimates including, but not limited to, the allowance for loan losses and fair value of other real estate owned.  Of particular relevance are the economic conditions in the concentrated geographic area in central Iowa in which the Banks conduct their operations. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Changes in the level of nonperforming assets and charge-offs. |
|--------|--------|---------------------------------------------------------------|

|   | · | Changes in the fair value of securities available-for-sale and management’s assessments of other-than-temporary impairment of such securities. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The effects of and changes in trade and monetary and fiscal policies and laws, including the changes in assessment rates established by the Federal Deposit Insurance Corporation for its Deposit Insurance Fund, interest rate policies of the Federal Open Market Committee of the Federal Reserve Board, the Federal Deposit Insurance Corporation’s Temporary Liquidity Guaranty Program and U.S. Treasury’s Capital Purchase Program and Troubled Asset Repurchase Program authorized by the Emergency Economic Stabilization Act of 2008. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes in sources and uses of funds, including loans, deposits and borrowings, including the ability of the Banks to maintain unsecured federal funds lines with correspondent banks. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes imposed by regulatory agencies to increase capital to a level greater than the level required for well-capitalized financial institutions. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inflation and interest rate, securities market and monetary fluctuations. |
|--------|--------|---------------------------------------------------------------------------|

|   | · | Political instability, acts of war or terrorism and natural disasters. |
|--------|--------|------------------------------------------------------------------------|

|   | · | The timely development and acceptance of new products and services and perceived overall value of these products and services by customers. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Revenues being lower than expected. |
|--------|--------|-------------------------------------|

|   | · | Changes in consumer spending, borrowings and savings habits. |
|--------|--------|--------------------------------------------------------------|

|   | · | Changes in the financial performance and/or condition of our borrowers. |
|--------|--------|-------------------------------------------------------------------------|

|   | · | Credit quality deterioration, which could cause an increase in the provision for loan losses. |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Technological changes. |
|--------|--------|------------------------|

|   | · | The ability to increase market share and control expenses. |
|--------|--------|------------------------------------------------------------|

|   | · | Changes in the competitive environment among financial or bank holding companies and other financial service providers. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | The effect of changes in laws and regulations with which the Company and the Banks must comply. |
|--------|--------|-------------------------------------------------------------------------------------------------|

|   | · | Changes in the securities markets. |
|--------|--------|------------------------------------|

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|   | · | The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The costs and effects of legal and regulatory developments, including the resolution of regulatory or other governmental inquiries and the results of regulatory examinations or reviews. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our success at managing the risks involved in the foregoing items. |
|--------|--------|--------------------------------------------------------------------|

NTITA

| (dollars in thousands) |   | $ Change |   |   | % Change |   |
|------------------------|--------|----------|--------|--------|----------|--------|
| +200 Basis Points      |   | $        | (2,770 | )      |     |   | -9.09 | % |
| +100 Basis Points      |   |     | (1,129 | )      |     |   | -3.70 | % |
| -100 Basis Points      |   |     | (1,529 | )      |     |   | -5.02 | % |
| -200 Basis Points      |   |     | (3,489 | )      |     |   | -11.45 | % |

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|                                                             |   | Less than three months |     |   | Three months to one year |   |     | One to five years |   |   | Over five years |   |   | Cumulative Total |    |
|------------------------------------------------------------------|--------|------------------------|----------|--------|--------------------------|--------|----------|-------------------|--------|--------|-----------------|--------|--------|------------------|---------|
| (dollars in thousands)                                           |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |
|                                                             |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |
| Interest - earning assets                                        |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |
| Interest-bearing deposits with banks                             |   | $                      | 7,693    |   |                     | $      | 4,537    |              |   | $      | 12,546          |   |   | $                | -       |   |   | $ | 24,776 |   |
| Federal funds sold                                               |   |                   | -        |   |                     |   | -        |              |   |   | -               |   |   |             | -       |   |   |   | - |   |
| Investments (1)                                                  |   |                   | 11,804   |   |                     |   | 19,855   |              |   |   | 278,725         |   |   |             | 108,270 |   |   |   | 418,654 |   |
| Loans                                                            |   |                   | 76,361   |   |                     |   | 62,322   |              |   |   | 247,602         |   |   |             | 36,861  |   |   |   | 423,146 |   |
| Loans held for sale                                              |   |                   | 1,023    |   |                     |   | -        |              |   |   | -               |   |   |             | -       |   |   |   | 1,023 |   |
|                                                             |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |   |   |   |   |   |
| Total interest - earning assets                                  |   | $                      | 96,881   |   |                     | $      | 86,714   |              |   | $      | 538,873         |   |   | $                | 145,131 |   |   | $ | 867,599 |   |
|                                                             |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |   |   |   |   |   |
| Interest - bearing liabilities                                   |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |   |   |   |   |   |
| Interest bearing demand deposits                                 |   | $                      | 197,393  |   |                     | $      | -        |              |   | $      | -               |   |   | $                | -       |   |   | $ | 197,393 |   |
| Money market and savings deposits                                |   |                   | 184,631  |   |                     |   | -        |              |   |   | -               |   |   |             | -       |   |   |   | 184,631 |   |
| Time certificates < $100,000                                  |   |                   | 31,308   |   |                     |   | 68,474   |              |   |   | 53,384          |   |   |             | -       |   |   |   | 153,166 |   |
| Time certificates > $100,000                                  |   |                   | 17,814   |   |                     |   | 45,007   |              |   |   | 24,233          |   |   |             | -       |   |   |   | 87,054 |   |
| Other borrowed funds (2)                                         |   |                   | 41,128   |   |                     |   | 1,000    |              |   |   | 10,500          |   |   |             | 24,500  |   |   |   | 77,128 |   |
|                                                             |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |   |   |   |   |   |
| Total interest - bearing liabilities                             |   | $                      | 472,274  |   |                     | $      | 114,481  |              |   | $      | 88,117          |   |   | $                | 24,500  |   |   | $ | 699,372 |   |
|                                                             |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |   |   |   |   |   |
| Interest sensitivity gap                                         |   | $                      | (375,393 | )      |                     | $      | (27,767  | )                 |   | $      | 450,756         |   |   | $                | 120,631 |   |   | $ | 168,227 |   |
|                                                             |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |   |   |   |   |   |
| Cumulative interest sensitivity gap                              |   | $                      | (375,393 | )      |                     | $      | (403,160 | )                 |   | $      | 47,596          |   |   | $                | 168,227 |   |   | $ | 168,227 |   |
|                                                             |   |                   |     |   |                     |   |     |              |   |   |            |   |   |             |    |   |   |   |   |   |
| Cumulative interest sensitivity gap as a percent of total assets |   |                   | -41.00   | %      |                     |   | -44.03   | %                 |   |   | 5.20            | %      |   |             | 18.37   | % |   |   |   |   |

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ANC

|   | /s/ Thomas H. Pohlman                   |   |
|--------|-----------------------------------------|--------|
|   | Thomas H. Pohlman,  President |   |
|   | (Principal Executive Officer)           |   |
|   |                                    |   |
|   |                                    |   |
|   | /s/ John P. Nelson                      |   |
|   | John P. Nelson, Vice President          |   |
|   | (Principal Financial Officer)           |   |

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| AMES NATIONAL CORPORATION AND SUBSIDIARIES                                                                                                       |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                             |   |
| CONSOLIDATED BALANCE SHEETS                                                                                                                      |   |
| December 31, 2009 and 2008                                                                                                                       |   |
|                                                                                                                                             |   |
| ASSETS                                                                                                                                           |   | 2009 |   |   | 2008 |   |
|                                                                                                                                             |   |   |   |   |   |   |
| Cash and due from banks                                                                                                                          |   | $ | 18,796,664 |   |   | $ | 24,697,591 |   |
| Federal funds sold                                                                                                                               |   |   | - |   |   |   | 16,533,000 |   |
| Interest bearing deposits in financial institutions                                                                                              |   |   | 24,776,088 |   |   |   | 10,400,761 |   |
| Securities available-for-sale                                                                                                                    |   |   | 418,655,018 |   |   |   | 313,014,375 |   |
| Loans receivable, net                                                                                                                            |   |   | 415,434,236 |   |   |   | 452,880,348 |   |
| Loans held for sale                                                                                                                              |   |   | 1,023,200 |   |   |   | 1,152,020 |   |
| Bank premises and equipment, net                                                                                                                 |   |   | 11,909,404 |   |   |   | 12,570,302 |   |
| Accrued income receivable                                                                                                                        |   |   | 5,710,226 |   |   |   | 6,650,287 |   |
| Deferred income taxes                                                                                                                            |   |   | 3,867,523 |   |   |   | 5,838,044 |   |
| Other real estate owned                                                                                                                          |   |   | 10,480,449 |   |   |   | 13,333,565 |   |
| Other assets                                                                                                                                     |   |   | 4,916,991 |   |   |   | 1,070,588 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| Total assets                                                                                                                                     |   | $ | 915,569,799 |   |   | $ | 858,140,881 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                             |   |   |   |   |   |   |   |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| LIABILITIES                                                                                                                                      |   |   |   |   |   |   |   |   |
| Deposits                                                                                                                                         |   |   |   |   |   |   |   |   |
| Demand, noninterest bearing                                                                                                                      |   | $ | 99,918,848 |   |   | $ | 99,830,687 |   |
| NOW accounts                                                                                                                                     |   |   | 197,393,459 |   |   |   | 165,422,333 |   |
| Savings and money market                                                                                                                         |   |   | 184,631,343 |   |   |   | 153,771,034 |   |
| Time, $100,000 and over                                                                                                                          |   |   | 87,054,194 |   |   |   | 81,378,796 |   |
| Other time                                                                                                                                       |   |   | 153,166,105 |   |   |   | 164,391,860 |   |
| Total deposits                                                                                                                                   |   |   | 722,163,949 |   |   |   | 664,794,710 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| Federal funds purchased and securities sold under agreements to repurchase                                                                       |   |   | 40,489,505 |   |   |   | 38,509,559 |   |
| Other short-term borrowings                                                                                                                      |   |   | 138,874 |   |   |   | 1,063,806 |   |
| Other short-term borrowings                                                                                                                      |   |   | 138,874 |   |   |   | 1,063,806 |   |
| Other short-term borrowings                                                                                                                      |   |   | 138,874 |   |   |   | 1,063,806 |   |
| Long-term borrowings                                                                                                                             |   |   | 36,500,000 |   |   |   | 43,500,000 |   |
| Dividend payable                                                                                                                                 |   |   | 943,292 |   |   |   | 2,641,216 |   |
| Accrued expenses and other liabilities                                                                                                           |   |   | 2,994,291 |   |   |   | 3,794,140 |   |
| Total liabilities                                                                                                                                |   |   | 803,229,911 |   |   |   | 754,303,431 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                                                                                             |   |   |   |   |   |   |   |   |
| Common stock, $2 par value, authorized 18,000,000 shares;        9,432,915 shares issued and outstanding |   |   | 18,865,830 |   |   |   | 18,865,830 |   |
| Additional paid-in capital                                                                                                                       |   |   | 22,651,222 |   |   |   | 22,651,222 |   |
| Additional paid-in capital                                                                                                                       |   |   | 22,651,222 |   |   |   | 22,651,222 |   |
| Additional paid-in capital                                                                                                                       |   |   | 22,651,222 |   |   |   | 22,651,222 |   |
| Retained earnings                                                                                                                                |   |   | 67,703,701 |   |   |   | 62,471,081 |   |
| Accumulated other comprehensive income (loss)-net unrealized gain (loss) on securities available-for-sale                                   |   |   | 3,119,135 |   |   |   | (150,683 | ) |
| Total stockholders' equity                                                                                                                       |   |   | 112,339,888 |   |   |   | 103,837,450 |   |
|                                                                                                                                             |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity                                                                                                       |   | $ | 915,569,799 |   |   | $ | 858,140,881 |   |

----

Table of Contents

| AMES NATIONAL CORPORATION AND SUBSIDIARIES                          |   |   |       |   |   |   |        |
|---------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-------------|
|                                                                |   |   |       |   |   |   |        |   |   |
| CONSOLIDATED STATEMENTS OF INCOME                                   |   |   |       |   |   |   |        |   |   |
| Years Ended December 31, 2009, 2008 and 2007                        |   |   |       |   |   |   |        |   |   |
|                                                                |   |   |       |   |   |   |        |   |   |
|                                                                |   | 2009   |       |   | 2008   |   |        | 2007 |   |
|                                                                |   |   |       |   |   |   |        |   |   |
| Interest and dividend income:                                       |   |   |       |   |   |   |        |   |   |
| Loans, including fees                                               |   | $      | 25,212,884 |   |   | $      | 29,458,407  |   |   | $ | 31,629,493 |   |
| Securities:                                                         |   |   |       |   |   |   |        |   |   |   |   |   |
| Taxable                                                             |   |   | 7,966,594  |   |   |   | 9,812,614   |   |   |   | 9,393,207 |   |
| Tax-exempt                                                          |   |   | 5,213,031  |   |   |   | 5,879,215   |   |   |   | 6,269,274 |   |
| Federal funds sold                                                  |   |   | 26,989     |   |   |   | 171,078     |   |   |   | 232,723 |   |
| Interest bearing deposits                                           |   |   | 471,809    |   |   |   | 192,853     |   |   |   | 37,381 |   |
| Total interest and dividend income                                  |   |   | 38,891,307 |   |   |   | 45,514,167  |   |   |   | 47,562,078 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Interest expense:                                                   |   |   |       |   |   |   |        |   |   |   |   |   |
| Deposits                                                            |   |   | 8,428,163  |   |   |   | 14,207,734  |   |   |   | 21,055,100 |   |
| Other borrowed funds                                                |   |   | 1,798,149  |   |   |   | 2,193,958   |   |   |   | 2,482,030 |   |
| Total interest expense                                              |   |   | 10,226,312 |   |   |   | 16,401,692  |   |   |   | 23,537,130 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Net interest income                                                 |   |   | 28,664,995 |   |   |   | 29,112,475  |   |   |   | 24,024,948 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Provision (credit) for loan losses                                  |   |   | 1,558,307  |   |   |   | 1,312,785   |   |   |   | (94,100 | ) |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Net interest income after provision (credit) for loan losses        |   |   | 27,106,688 |   |   |   | 27,799,690  |   |   |   | 24,119,048 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Noninterest income (loss):                                          |   |   |       |   |   |   |        |   |   |   |   |   |
| Trust department income                                             |   |   | 1,541,831  |   |   |   | 1,597,096   |   |   |   | 2,014,277 |   |
| Service fees                                                        |   |   | 1,814,925  |   |   |   | 1,791,713   |   |   |   | 1,855,964 |   |
| Securities gains, net                                               |   |   | 1,186,912  |   |   |   | 3,515,323   |   |   |   | 1,466,697 |   |
| Other-than-temporary impairment of  investment securities |   |   | (29,565    | )      |   |   | (12,054,387 | ) |   |   | - |   |
| Loan and secondary market fees                                      |   |   | 1,008,566  |   |   |   | 834,129     |   |   |   | 743,009 |   |
| Merchant and ATM fees                                               |   |   | 621,316    |   |   |   | 616,802     |   |   |   | 553,644 |   |
| Other                                                               |   |   | 780,275    |   |   |   | 690,898     |   |   |   | 574,759 |   |
| Total noninterest income (loss)                                     |   |   | 6,924,260  |   |   |   | (3,008,426  | ) |   |   | 7,208,350 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Noninterest expense:                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Salaries and employee benefits                                      |   |   | 10,757,475 |   |   |   | 10,572,597  |   |   |   | 10,041,947 |   |
| Data processing                                                     |   |   | 1,892,123  |   |   |   | 2,246,473   |   |   |   | 2,239,595 |   |
| Occupancy expenses                                                  |   |   | 1,436,485  |   |   |   | 1,587,076   |   |   |   | 1,292,424 |   |
| FDIC insurance assessments                                          |   |   | 1,675,401  |   |   |   | 242,906     |   |   |   | 159,160 |   |
| Other real estate owned                                             |   |   | 4,198,315  |   |   |   | 151,428     |   |   |   | 119,651 |   |
| Other operating expenses, net                                       |   |   | 2,772,556  |   |   |   | 2,793,774   |   |   |   | 2,923,470 |   |
| Total noninterest expense                                           |   |   | 22,732,355 |   |   |   | 17,594,254  |   |   |   | 16,776,247 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Income before income taxes                                          |   |   | 11,298,593 |   |   |   | 7,197,010   |   |   |   | 14,551,151 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Provision for income taxes                                          |   |   | 2,292,807  |   |   |   | 845,014     |   |   |   | 3,542,049 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Net income                                                          |   | $      | 9,005,786  |   |   | $      | 6,351,996   |   |   | $ | 11,009,102 |   |
|                                                                |   |   |       |   |   |   |        |   |   |   |   |   |
| Basic and diluted earnings per share                                |   | $      | 0.95       |   |   | $      | 0.67        |   |   | $ | 1.17 |   |

----

Table of Contents

| AMES NATIONAL CORPORATION AND SUBSIDIARIES                                                                          |   |                 |       |   |         |       |       |                       |
|---------------------------------------------------------------------------------------------------------------------|--------|----------------------|------------|--------|--------------|------------|------------|----------------------------|
|                                                                                                                |   |                 |       |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |
| CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY                                                               |   |                 |
| Years Ended December 31, 2009, 2008 and 2007                                                                        |   |                 |       |   |         |       |
|                                                                                                                |   |                 |       |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                |   | Comprehensive Income |       |   | Common Stock |       |       | Additional Paid-in Capital |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Income (Loss) |   |   | Total Stockholders'Equity |   |
|                                                                                                                |   |                 |       |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2006                                                                                          |   |                 |       |   | $            | 18,850,026 |       |                       | $ | 22,498,904 |   |   | $ | 65,856,627 |   |   | $ | 5,717,755 |   |   | $ | 112,923,312 |   |
| Comprehensive income:                                                                                               |   |                 |       |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                          |   | $                    | 11,009,102 |   |         |       | -          |                       |   |   | - |   |   |   | 11,009,102 |   |   |   | - |   |   |   | 11,009,102 |   |
| Other comprehensive income, unrealized losses on securities, net of reclassification adjustment, net of tax benefit |   |                 | (3,828,099 | )      |         |       | -          |                       |   |   | - |   |   |   | - |   |   |   | (3,828,099 | ) |   |   | (3,828,099 | ) |
| Total comprehensive income                                                                                          |   | $                    | 7,181,003  |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends declared, $1.08 per share                                                                            |   |                 |       |   |         |       | -          |                       |   |   | - |   |   |   | (10,182,713 | ) |   |   | - |   |   |   | (10,182,713 | ) |
| Sale of 4,567 shares of common stock                                                                                |   |                 |       |   |         |       | 9,134      |                       |   |   | 89,787 |   |   |   | - |   |   |   | - |   |   |   | 98,921 |   |
| Balance, December 31, 2007                                                                                          |   |                 |       |   |         |       | 18,859,160 |                       |   |   | 22,588,691 |   |   |   | 66,683,016 |   |   |   | 1,889,656 |   |   |   | 110,020,523 |   |
| Comprehensive income:                                                                                               |   |                 |       |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                          |   | $                    | 6,351,996  |   |         |       | -          |                       |   |   | - |   |   |   | 6,351,996 |   |   |   | - |   |   |   | 6,351,996 |   |
| Other comprehensive income, unrealized losses on securities, net of reclassification adjustment, net of tax benefit |   |                 | (2,040,339 | )      |         |       | -          |                       |   |   | - |   |   |   | - |   |   |   | (2,040,339 | ) |   |   | (2,040,339 | ) |
| Total comprehensive income                                                                                          |   | $                    | 4,311,657  |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends declared, $1.12 per share                                                                            |   |                 |       |   |         |       | -          |                       |   |   | - |   |   |   | (10,563,931 | ) |   |   | - |   |   |   | (10,563,931 | ) |
| Sale of 3,335 shares of common stock                                                                                |   |                 |       |   |         |       | 6,670      |                       |   |   | 62,531 |   |   |   | - |   |   |   | - |   |   |   | 69,201 |   |
| Balance, December 31, 2008                                                                                          |   |                 |       |   |         |       | 18,865,830 |                       |   |   | 22,651,222 |   |   |   | 62,471,081 |   |   |   | (150,683 | ) |   |   | 103,837,450 |   |
| Comprehensive income:                                                                                               |   |                 |       |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                                          |   | $                    | 9,005,786  |   |         |       | -          |                       |   |   | - |   |   |   | 9,005,786 |   |   |   | - |   |   |   | 9,005,786 |   |
| Other comprehensive income, unrealized gains on securities, net of reclassification adjustment, net of tax benefit  |   |                 | 3,269,818  |   |         |       | -          |                       |   |   | - |   |   |   | - |   |   |   | 3,269,818 |   |   |   | 3,269,818 |   |
| Total comprehensive income                                                                                          |   | $                    | 12,275,604 |   |         |       |       |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash dividends declared, $0.40 per share                                                                            |   |                 |       |   |         |       | -          |                       |   |   | - |   |   |   | (3,773,166 | ) |   |   | - |   |   |   | (3,773,166 | ) |
| Balance, December 31, 2009                                                                                          |   |                 |       |   |         | $          | 18,865,830 |                       |   | $ | 22,651,222 |   |   | $ | 67,703,701 |   |   | $ | 3,119,135 |   |   | $ | 112,339,888 |   |

----

Table of Contents

| AMES NATIONAL CORPORATION AND SUBSIDIARIES                                                        |   |   |         |   |   |   |         |   |   |
|---------------------------------------------------------------------------------------------------|--------|--------|--------------|--------|--------|--------|--------------|--------|--------|
|                                                                                              |   |   |         |   |   |   |         |   |   |
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                             |   |   |         |   |   |   |         |   |   |
| Years Ended December 31, 2009, 2008 and 2007                                                      |   |   |         |   |   |   |         |   |   |
|                                                                                              |   |   |         |   |   |   |         |   |   |
|                                                                                              |   | 2009   |         |   | 2008   |   |         | 2007   |   |
|                                                                                              |   |   |         |   |   |   |         |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                              |   |   |         |   |   |   |         |   |   |
| Net income                                                                                        |   | $      | 9,005,786    |   |   | $      | 6,351,996    |   |   | $ | 11,009,102 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:                 |   |   |         |   |   |   |         |   |   |   |   |   |
| Provision (credit) for loan losses                                                                |   |   | 1,558,307    |   |   |   | 1,312,785    |   |   |   | (94,100 | ) |
| Provision (credit) for off-balance sheet commitments                                              |   |   | (21,000      | )      |   |   | 15,000       |   |   |   | 233,000 |   |
| Amortization and accretion                                                                        |   |   | 868,971      |   |   |   | (184,998     | )      |   |   | (244,069 | ) |
| Depreciation                                                                                      |   |   | 876,792      |   |   |   | 1,096,653    |   |   |   | 1,086,400 |   |
| Provision (credit) for deferred taxes                                                             |   |   | 50,154       |   |   |   | (3,710,424   | )      |   |   | 130,978 |   |
| Securities gains, net                                                                             |   |   | (1,186,912   | )      |   |   | (3,515,323   | )      |   |   | (1,466,697 | ) |
| Other-than-temporary impairment of investment securities                                          |   |   | 29,565       |   |   |   | 12,054,387   |   |   |   | - |   |
| Impairment of other real estate owned                                                             |   |   | 3,879,901    |   |   |   | -            |   |   |   | - |   |
| Gain on sale of other real estate owned                                                           |   |   | (92,513      | )      |   |   | (66,219      | )      |   |   | (16,886 | ) |
| Loss on disposal of equipment                                                                     |   |   | 1,096        |   |   |   | -            |   |   |   | - |   |
| Change in assets and liabilities:                                                                 |   |   |         |   |   |   |         |   |   |   |   |   |
| Decrease (increase) in loans held for sale                                                        |   |   | 128,820      |   |   |   | (807,050     | )      |   |   | 181,029 |   |
| Decrease (increase) in accrued income receivable                                                  |   |   | 940,061      |   |   |   | 1,372,613    |   |   |   | (151,535 | ) |
| Increase in other assets                                                                          |   |   | (3,860,396   | )      |   |   | (841,693     | )      |   |   | (110,857 | ) |
| Increase (decrease) in accrued expenses and other liabilities                                     |   |   | (778,849     | )      |   |   | (355,962     | )      |   |   | 165,363 |   |
| Net cash provided by operating activities                                                         |   |   | 11,399,783   |   |   |   | 12,721,765   |   |   |   | 10,721,728 |   |
|                                                                                              |   |   |         |   |   |   |         |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                              |   |   |         |   |   |   |         |   |   |   |   |   |
| Purchase of securities available-for-sale                                                         |   |   | (252,088,448 | )      |   |   | (140,744,441 | )      |   |   | (88,955,529 | ) |
| Proceeds from sale of securities available-for-sale                                               |   |   | 68,698,126   |   |   |   | 59,489,208   |   |   |   | 23,445,749 |   |
| Proceeds from maturities and calls of securities available-for-sale                               |   |   | 83,228,240   |   |   |   | 96,590,223   |   |   |   | 75,773,995 |   |
| Net decrease (increase) in interest bearing deposits in financial institutions                    |   |   | (14,375,327  | )      |   |   | (9,766,148   | )      |   |   | 909,693 |   |
| Net decrease (increase) in federal funds sold                                                     |   |   | 16,533,000   |   |   |   | (11,033,000  | )      |   |   | 7,600,000 |   |
| Net decrease (increase) in loans                                                                  |   |   | 33,580,577   |   |   |   | (1,677,154   | )      |   |   | (34,434,359 | ) |
| Net proceeds from the sale of other real estate owned                                             |   |   | 1,367,578    |   |   |   | 1,091,152    |   |   |   | 42,000 |   |
| Purchase of bank premises and equipment, net                                                      |   |   | (202,997     | )      |   |   | (220,090     | )      |   |   | (1,915,524 | ) |
| Other changes in other real estate owned                                                          |   |   | 5,378        |   |   |   | (377,539     | )      |   |   | - |   |
| Net cash used in investing activities                                                             |   |   | (63,253,873  | )      |   |   | (6,647,789   | )      |   |   | (17,533,975 | ) |
|                                                                                              |   |   |         |   |   |   |         |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                              |   |   |         |   |   |   |         |   |   |   |   |   |
| Increase (decrease) in deposits                                                                   |   |   | 57,369,239   |   |   |   | (25,324,085  | )      |   |   | 9,762,322 |   |
| Increase (decrease) in federal funds purchased and securities sold under agreements to repurchase |   |   | 1,979,946    |   |   |   | 8,476,238    |   |   |   | (4,694,576 | ) |
| Proceeds (payments) from other short-term borrowings, net                                         |   |   | (924,932     | )      |   |   | 326,386      |   |   |   | 1,267,304 |   |
| Proceeds from long-term borrowings                                                                |   |   | 2,500,000    |   |   |   | 21,500,000   |   |   |   | 20,000,000 |   |
| Payments on long-term borrwings                                                                   |   |   | (9,500,000   | )      |   |   | (2,000,000   | )      |   |   | - |   |
| Dividends paid                                                                                    |   |   | (5,471,090   | )      |   |   | (10,468,702  | )      |   |   | (10,087,229 | ) |
| Proceeds from issuance of stock                                                                   |   |   | -            |   |   |   | 69,201       |   |   |   | 98,921 |   |
| Net cash provided by (used in) financing activities                                               |   |   | 45,953,163   |   |   |   | (7,420,962   | )      |   |   | 16,346,742 |   |
|                                                                                              |   |   |         |   |   |   |         |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                                              |   |   | (5,900,927   | )      |   |   | (1,346,986   | )      |   |   | 9,534,495 |   |
|                                                                                              |   |   |         |   |   |   |         |   |   |   |   |   |
| CASH AND DUE FROM BANKS                                                                           |   |   |         |   |   |   |         |   |   |   |   |   |
| Beginning                                                                                         |   |   | 24,697,591   |   |   |   | 26,044,577   |   |   |   | 16,510,082 |   |
| Ending                                                                                            |   | $      | 18,796,664   |   |   | $      | 24,697,591   |   |   | $ | 26,044,577 |   |

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| AMES NATIONAL CORPORATION AND SUBSIDIARIES        |   |   |       |   |   |   |       |
|---------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|
|                                              |   |   |       |   |   |   |       |   |   |
| CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) |   |   |       |   |
| Years Ended December 31, 2009, 2008 and 2007      |   |   |       |   |   |   |       |   |   |
|                                              |   | 2009   |       |   | 2008   |   |       | 2007 |   |
|                                              |   |   |       |   |   |   |       |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW              |   |   |       |   |   |   |       |   |   |
| INFORMATION                                       |   |   |       |   |   |   |       |   |   |
| Cash payments for:                                |   |   |       |   |   |   |       |   |   |
| Interest                                          |   | $      | 10,712,422 |   |   | $      | 17,225,985 |   |   | $ | 23,456,721 |   |
| Income taxes                                      |   |   | 1,588,103  |   |   |   | 5,430,551  |   |   |   | 3,691,664 |   |
|                                              |   |   |       |   |   |   |       |   |   |   |   |   |
| SUPLEMENTAL DISCLOSURE OF NONCASH                 |   |   |       |   |   |   |       |   |   |   |   |   |
| INVESTING ACTIVITIES                              |   |   |       |   |   |   |       |   |   |   |   |   |
| Transfer of loans to other real estate owned      |   | $      | 2,307,228  |   |   | $      | 11,135,022 |   |   | $ | 62,590 |   |

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|                                       |   | 2009   |      |   | 2008   |   |      | 2007   |   |
|--------------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
| Basic earning per share computation:       |   |   |      |   |   |   |      |   |   |
| Net income                                 |   | $      | 9,005,786 |   |   | $      | 6,351,996 |   |   | $ | 11,009,102 |   |
| Weighted average common shares outstanding |   |   | 9,432,915 |   |   |   | 9,431,393 |   |   |   | 9,427,503 |   |
| Basic EPS                                  |   | $      | 0.95      |   |   | $      | 0.67      |   |   | $ | 1.17 |   |

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|                                               |   | Amortized Cost |        |   | Gross Unrealized Gains |   |      | Gross Unrealized Losses |   |   | Estimated Fair Value |   |
|----------------------------------------------------|--------|----------------|-------------|--------|------------------------|--------|-----------|-------------------------|--------|--------|----------------------|--------|
| 2009:                                              |   |           |        |   |                   |   |      |                    |   |   |                 |   |
| U.S. treasury                                      |   | $              | 498,972     |   |                   | $      | 26,219    |                    |   | $      | -                    |   |   | $ | 525,191 |   |
| U.S. government agencies                           |   |           | 105,903,470 |   |                   |   | 969,583   |                    |   |   | (233,169             | )      |   |   | 106,639,884 |   |
| U.S. government mortgage-backed securities         |   |           | 100,106,597 |   |                   |   | 1,724,922 |                    |   |   | (242,033             | )      |   |   | 101,589,486 |   |
| State and political subdivisions                   |   |           | 175,298,674 |   |                   |   | 3,109,322 |                    |   |   | (355,571             | )      |   |   | 178,052,425 |   |
| Corporate bonds                                    |   |           | 23,094,417  |   |                   |   | 1,253,157 |                    |   |   | (47,880              | )      |   |   | 24,299,694 |   |
| Equity securities, financial industry common stock |   |           | 3,402,389   |   |                   |   | -         |                    |   |   | (1,056,088           | )      |   |   | 2,346,301 |   |
| Equity securities, other                           |   |           | 5,399,493   |   |                   |   | 58,400    |                    |   |   | (255,856             | )      |   |   | 5,202,037 |   |
|                                               |   | $              | 413,704,012 |   |                   | $      | 7,141,603 |                    |   | $      | (2,190,597           | )      |   | $ | 418,655,018 |   |

|                                               |   | Amortized Cost |        |   | Gross Unrealized Gains |   |      | Gross Unrealized Losses |   |   | Estimated Fair Value |   |
|----------------------------------------------------|--------|----------------|-------------|--------|------------------------|--------|-----------|-------------------------|--------|--------|----------------------|--------|
| 2008:                                              |   |           |        |   |                   |   |      |                    |   |   |                 |   |
| U.S. treasury                                      |   | $              | 498,102     |   |                   | $      | 47,445    |                    |   | $      | -                    |   |   | $ | 545,547 |   |
| U.S. government agencies                           |   |           | 48,195,482  |   |                   |   | 1,537,009 |                    |   |   | (37,748              | )      |   |   | 49,694,743 |   |
| U.S. government mortgage-backed securities         |   |           | 66,421,362  |   |                   |   | 1,116,775 |                    |   |   | (22,258              | )      |   |   | 67,515,879 |   |
| State and political subdivisions                   |   |           | 127,826,526 |   |                   |   | 1,592,343 |                    |   |   | (677,869             | )      |   |   | 128,741,000 |   |
| Corporate bonds                                    |   |           | 58,003,206  |   |                   |   | 224,679   |                    |   |   | (2,990,315           | )      |   |   | 55,237,570 |   |
| Equity securities, financial industry common stock |   |           | 6,251,728   |   |                   |   | 205,593   |                    |   |   | (842,661             | )      |   |   | 5,614,660 |   |
| Equity securities, other                           |   |           | 6,057,148   |   |                   |   | -         |                    |   |   | (392,172             | )      |   |   | 5,664,976 |   |
|                                               |   | $              | 313,253,554 |   |                   | $      | 4,723,844 |                    |   | $      | (4,963,023           | )      |   | $ | 313,014,375 |   |

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|                                   |   | Amortized Cost |        |   | Estimated Fair Value |   |
|----------------------------------------|--------|----------------|-------------|--------|----------------------|--------|
|                                   |   |           |        |   |                 |   |
| Due in one year or less                |   | $              | 31,379,461  |   |                 | $      | 31,659,156 |   |
| Due after one year through five years  |   |           | 273,792,589 |   |                 |   | 278,725,694 |   |
| Due after five years through ten years |   |           | 87,907,111  |   |                 |   | 88,811,869 |   |
| Due after ten years                    |   |           | 11,822,969  |   |                 |   | 11,909,961 |   |
|                                   |   |           | 404,902,130 |   |                 |   | 411,106,680 |   |
| Equity securities                      |   |           | 8,801,882   |   |                 |   | 7,548,338 |   |
|                                   |   | $              | 413,704,012 |   |                 | $      | 418,655,018 |   |

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|                                                                      |   | 2009   |       |   | 2008   |   |        | 2007   |   |
|---------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-------------|--------|--------|
| Unrealized holding gains (losses) arising during the period               |   | $      | 6,347,532  |   |   | $      | (11,777,697 | )      |   | $ | (4,609,651 | ) |
| Reclassification adjustment for net losses (gains) realized in net income |   |   | (1,157,347 | )      |   |   | 8,539,064   |   |   |   | (1,466,697 | ) |
| Net unrealized gains (losses) before tax effect                           |   |   | 5,190,185  |   |   |   | (3,238,633  | )      |   |   | (6,076,348 | ) |
| Tax effect                                                                |   |   | (1,920,367 | )      |   |   | 1,198,294   |   |   |   | 2,248,249 |   |
| Other comprehensive income - Net unrealized gains (losses) on securities  |   | $      | 3,269,818  |   |   | $      | (2,040,339  | )      |   | $ | (3,828,099 | ) |

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|                                               |   | Less than 12 Months |       |   | 12 Months or More |   |     | Total  |   |
|----------------------------------------------------|--------|---------------------|------------|--------|-------------------|--------|----------|--------|--------|
|                                               |   | Fair                |       |   | Unrealized        |   |     | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                               |   | Value               |       |   | Losses            |   |     | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| 2009:                                              |   |                |       |   |              |   |     |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                |       |   |              |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                     |   |                |       |   |              |   |     |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government agencies                           |   | $                   | 20,945,895 |   |              | $      | (221,061 | )      |   | $ | 493,118 |   |   | $ | (12,108 | ) |   | $ | 21,439,013 |   |   | $ | (233,169 | ) |
| U.S. government mortgage - backed securities       |   |                | 35,520,408 |   |              |   | (242,033 | )      |   |   | - |   |   |   | - |   |   |   | 35,520,408 |   |   |   | (242,033 | ) |
| State and political subsidivisions                 |   |                | 25,536,025 |   |              |   | (292,017 | )      |   |   | 2,701,961 |   |   |   | (63,554 | ) |   |   | 28,237,986 |   |   |   | (355,571 | ) |
| Corporate obligations                              |   |                | 998,971    |   |              |   | (764     | )      |   |   | 2,687,426 |   |   |   | (47,116 | ) |   |   | 3,686,397 |   |   |   | (47,880 | ) |
| Equity securities, financial industry common stock |   |                | -          |   |              |   | -        |   |   |   | 2,346,301 |   |   |   | (1,056,088 | ) |   |   | 2,346,301 |   |   |   | (1,056,088 | ) |
| Equity securities, other                           |   |                | -          |   |              |   | -        |   |   |   | 1,932,636 |   |   |   | (255,856 | ) |   |   | 1,932,636 |   |   |   | (255,856 | ) |
|                                               |   | $                   | 83,001,299 |   |              | $      | (755,875 | )      |   | $ | 10,161,442 |   |   | $ | (1,434,722 | ) |   | $ | 93,162,741 |   |   | $ | (2,190,597 | ) |

|                                               |   | Less than 12 Months |       |   | 12 Months or More |   |       | Total  |   |
|----------------------------------------------------|--------|---------------------|------------|--------|-------------------|--------|------------|--------|--------|
|                                               |   | Fair                |       |   | Unrealized        |   |       | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                               |   | Value               |       |   | Losses            |   |       | Value  |   |   | Losses |   |   | Value |   |   | Losses |   |
| 2008:                                              |   |                |       |   |              |   |       |   |   |   |   |   |   |   |   |   |   |   |
|                                               |   |                |       |   |              |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Securities available for sale:                     |   |                |       |   |              |   |       |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government agencies                           |   | $                   | 1,801,958  |   |              | $      | (17,068    | )      |   | $ | 629,993 |   |   | $ | (20,680 | ) |   | $ | 2,431,951 |   |   | $ | (37,748 | ) |
| U.S. government mortgage - backed securities       |   |                | 5,012,003  |   |              |   | (18,645    | )      |   |   | 100,052 |   |   |   | (3,613 | ) |   |   | 5,112,055 |   |   |   | (22,258 | ) |
| State and political subsidivisions                 |   |                | 29,377,281 |   |              |   | (594,462   | )      |   |   | 1,482,034 |   |   |   | (83,407 | ) |   |   | 30,859,315 |   |   |   | (677,869 | ) |
| Corporate obligations                              |   |                | 30,284,263 |   |              |   | (1,810,579 | )      |   |   | 10,092,995 |   |   |   | (1,179,736 | ) |   |   | 40,377,258 |   |   |   | (2,990,315 | ) |
| Equity securities, financial industry common stock |   |                | 2,885,600  |   |              |   | (842,661   | )      |   |   | - |   |   |   | - |   |   |   | 2,885,600 |   |   |   | (842,661 | ) |
| Equity securities, other                           |   |                | 2,175,237  |   |              |   | (392,172   | )      |   |   | - |   |   |   | - |   |   |   | 2,175,237 |   |   |   | (392,172 | ) |
|                                               |   | $                   | 71,536,342 |   |              | $      | (3,675,587 | )      |   | $ | 12,305,074 |   |   | $ | (1,287,436 | ) |   | $ | 83,841,416 |   |   | $ | (4,963,023 | ) |

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|                        |   | 2009   |        |   | 2008   |   |
|-----------------------------|--------|--------|-------------|--------|--------|--------|
| Commercial and agricultural |   | $      | 111,386,798 |   |   | $      | 116,976,463 |   |
| Real estate - mortgage      |   |   | 264,202,119 |   |   |   | 282,901,692 |   |
| Real estate - construction  |   |   | 22,863,630  |   |   |   | 35,325,692 |   |
| Consumer                    |   |   | 7,792,077   |   |   |   | 9,049,309 |   |
| Other                       |   |   | 16,900,983  |   |   |   | 15,478,724 |   |
|                        |   |   | 423,145,607 |   |   |   | 459,731,880 |   |
| Less:                       |   |   |        |   |   |   |   |   |
| Allowance for loan losses   |   |   | (7,651,510  | )      |   |   | (6,779,215 | ) |
| Deferred loan fees          |   |   | (59,861     | )      |   |   | (72,317 | ) |
|                        |   | $      | 415,434,236 |   |   | $      | 452,880,348 |   |

|                               |   | 2009   |      |   | 2008   |   |      | 2007   |   |
|------------------------------------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|
|                               |   |   |      |   |   |   |      |   |   |
| Balance, beginning                 |   | $      | 6,779,215 |   |   | $      | 5,780,678 |   |   | $ | 6,532,617 |   |
| Provision (credit) for loan losses |   |   | 1,558,307 |   |   |   | 1,312,785 |   |   |   | (94,100 | ) |
| Recoveries of loans charged-off    |   |   | 180,961   |   |   |   | 112,440   |   |   |   | 68,803 |   |
| Loans charged-off                  |   |   | (866,973  | )      |   |   | (426,688  | )      |   |   | (726,642 | ) |
| Balance, ending                    |   | $      | 7,651,510 |   |   | $      | 6,779,215 |   |   | $ | 5,780,678 |   |

|                       |   | 2009   |        |   | 2008   |   |
|----------------------------|--------|--------|-------------|--------|--------|--------|
|                       |   |   |        |   |   |   |
| Balance, beginning of year |   | $      | 14,191,369  |   |   | $      | 14,065,125 |   |
| New loans                  |   |   | 14,162,381  |   |   |   | 25,425,856 |   |
| Repayments                 |   |   | (16,241,577 | )      |   |   | (27,991,382 | ) |
| Change in status           |   |   | (3,893,340  | )      |   |   | 2,691,770 |   |
| Balance, end of year       |   | $      | 8,218,833   |   |   | $      | 14,191,369 |   |

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|                                                        |   | December 31, |       |
|-------------------------------------------------------------|--------|--------------|------------|
|                                                        |   | 2009         |       |   | 2008 |   |
|                                                        |   |         |       |   |   |   |
| Impaired loans without a valuation allowance                |   | $            | 4,381,000  |   |   | $ | 2,679,000 |   |
| Impaired loans with a valuation allowance                   |   |         | 5,806,000  |   |   |   | 3,831,000 |   |
| Total impaired loans                                        |   | $            | 10,187,000 |   |   | $ | 6,510,000 |   |
|                                                        |   |         |       |   |   |   |   |   |
| Valuation related to impaired loans                         |   | $            | 999,000    |   |   | $ | 257,000 |   |
|                                                        |   |         |       |   |   |   |   |   |
| Total nonaccrual loans                                      |   | $            | 10,187,000 |   |   | $ | 6,339,000 |   |
|                                                        |   |         |       |   |   |   |   |   |
| Total loans past due ninety days or more and still accruing |   | $            | 121,000    |   |   | $ | 469,000 |   |

|                                                              |   | Years Ended December 31, |      |
|-------------------------------------------------------------------|--------|--------------------------|-----------|
|                                                              |   | 2009                     |      |   | 2008 |   |   | 2007 |   |
|                                                              |   |                     |      |   |   |   |   |   |   |
| Average investments in impaired loans                             |   | $                        | 9,288,000 |   |   | $ | 7,848,000 |   |   | $ | 2,486,000 |   |
| Interest income that would have been recognized on impaired loans |   | $                        | 564,000   |   |   | $ | 478,000 |   |   | $ | 346,000 |   |
| Interest income recorded on impaired loans                        |   | $                        | 32,000    |   |   | $ | 155,000 |   |   | $ | 180,000 |   |

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|                          |   | 2009   |       |   | 2008   |   |
|-------------------------------|--------|--------|------------|--------|--------|--------|
|                          |   |   |       |   |   |   |
| Land                          |   | $      | 2,426,383  |   |   | $      | 2,426,383 |   |
| Buildings and improvements    |   |   | 14,518,623 |   |   |   | 14,545,054 |   |
| Furniture and equipment       |   |   | 6,026,156  |   |   |   | 7,179,512 |   |
|                          |   |   | 22,971,162 |   |   |   | 24,150,949 |   |
| Less accumulated depreciation |   |   | 11,061,758 |   |   |   | 11,580,647 |   |
|                          |   | $      | 11,909,404 |   |   | $      | 12,570,302 |   |

|                       |   | 2009   |       |   | 2008   |   |
|----------------------------|--------|--------|------------|--------|--------|--------|
|                       |   |   |       |   |   |   |
| Balance, beginning of year |   | $      | 13,333,565 |   |   | $      | 2,845,937 |   |
| Transfer of loans          |   |   | 2,307,228  |   |   |   | 11,135,022 |   |
| Impairment                 |   |   | (3,879,901 | )      |   |   | - |   |
| Net proceeds from the sale |   |   | (1,367,578 | )      |   |   | (1,091,152 | ) |
| Gain on sale               |   |   | 92,513     |   |   |   | 66,219 |   |
| Other changes              |   |   | (5,378     | )      |   |   | 377,539 |   |
| Balance, end of year       |   | $      | 10,480,449 |   |   | $      | 13,333,565 |   |

| 2010   |   | $      | 162,603,406 |   |
|--------|--------|--------|-------------|--------|
| 2011   |   |   | 41,420,842  |   |
| 2012   |   |   | 21,867,872  |   |
| 2013   |   |   | 6,734,064   |   |
| 2014   |   |   | 7,594,115   |   |
|   |   | $      | 240,220,299 |   |

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|                     |   | 2009   |      |   | 2008   |   |       | 2007   |   |
|--------------------------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|
|                     |   |   |      |   |   |   |       |   |   |
| NOW accounts             |   | $      | 469,064   |   |   | $      | 897,544    |   |   | $ | 2,050,655 |   |
| Savings and money market |   |   | 1,181,375 |   |   |   | 2,759,380  |   |   |   | 5,683,264 |   |
| Time, $100,000 and over  |   |   | 2,289,960 |   |   |   | 3,948,039  |   |   |   | 5,325,045 |   |
| Other time               |   |   | 4,487,764 |   |   |   | 6,602,771  |   |   |   | 7,996,136 |   |
|                     |   | $      | 8,428,163 |   |   | $      | 14,207,734 |   |   | $ | 21,055,100 |   |

|                                    |   | Amount |       |   | Weighted Average Interest Rate |   | Features |
|-----------------------------------------|--------|--------|------------|--------|--------------------------------|--------|----------|
|                                    |   |   |       |   |                           |   |     |
| FHLB advances maturing in:              |   |   |       |   |                           |   |     |
| 2010                                    |   | $      | 1,500,000  |   |                           |   | 4.57     | % |   |
| 2011                                    |   |   | 1,500,000  |   |                           |   | 4.09     | % |   |
| 2012                                    |   |   | 1,000,000  |   |                           |   | 2.58     | % |   |
| 2013                                    |   |   | 1,000,000  |   |                           |   | 2.17     | % | Callable in March 2011 |
| After                                   |   |   | 11,500,000 |   |                           |   | 2.93     | % | Includes $4,500,000 callable in February 2011; $7,000,000 callable in March 2011 |
|                                    |   |   |       |   |                           |   |     |   |   |
|                                    |   |   |       |   |                           |   |     |   |   |
| Total FHLB advances                     |   | $      | 16,500,000 |   |                           |   | 3.12     | % |   |
|                                    |   |   |       |   |                           |   |     |   |   |
| Term repurchase agreements maturing in: |   |   |       |   |                           |   |     |   |   |
| 2012                                    |   |   | 7,000,000  |   |                           |   | 4.15     | % |  Callable in 2010 |
| 2018                                    |   |   | 13,000,000 |   |                           |   | 3.56     | % |  Callable in 2010 |
| Total term repurchase agreements        |   | $      | 20,000,000 |   |                           |   | 3.77     | % |   |
|                                    |   |   |       |   |                           |   |     |   |   |
| Total long-term borrowings              |   | $      | 36,500,000 |   |                           |   | 3.47     | % |   |

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|               |   | 2009   |      |   | 2008   |   |       | 2007   |   |
|--------------------|--------|--------|-----------|--------|--------|--------|------------|--------|--------|
|               |   |   |      |   |   |   |       |   |   |
| Federal:           |   |   |      |   |   |   |       |   |   |
| Current            |   | $      | 1,710,159 |   |   | $      | 3,839,793  |   |   | $ | 2,726,253 |   |
| Deferred           |   |   | 93,120    |   |   |   | (3,370,787 | )      |   |   | 111,616 |   |
|               |   |   | 1,803,279 |   |   |   | 469,006    |   |   |   | 2,837,869 |   |
| State:             |   |   |      |   |   |   |       |   |   |   |   |   |
| Current            |   |   | 532,494   |   |   |   | 715,645    |   |   |   | 684,818 |   |
| Deferred           |   |   | (42,966   | )      |   |   | (339,637   | )      |   |   | 19,362 |   |
|               |   |   | 489,528   |   |   |   | 376,008    |   |   |   | 704,180 |   |
|               |   |   |      |   |   |   |       |   |   |   |   |   |
| Income tax expense |   | $      | 2,292,807 |   |   | $      | 845,014    |   |   | $ | 3,542,049 |   |

|                                    |   | 2009   |       |   | 2008   |   |       | 2007   |   |
|-----------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
|                                    |   |   |       |   |   |   |       |   |   |
| Income taxes at 35% federal tax rate    |   | $      | 3,954,508  |   |   | $      | 2,518,955  |   |   | $ | 5,092,903 |   |
| Increase (decrease) resulting from:     |   |   |       |   |   |   |       |   |   |   |   |   |
| Tax-exempt interest and dividends       |   |   | (1,892,872 | )      |   |   | (1,984,052 | )      |   |   | (1,942,031 | ) |
| State taxes, net of federal tax benefit |   |   | 404,556    |   |   |   | 520,100    |   |   |   | 435,391 |   |
| Other                                   |   |   | (173,385   | )      |   |   | (209,989   | )      |   |   | (44,214 | ) |
| Total income tax expense                |   | $      | 2,292,807  |   |   | $      | 845,014    |   |   | $ | 3,542,049 |   |

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Table of Contents

|                                                   |   | 2009   |       |   | 2008   |   |
|--------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Deferred tax assets:                                   |   |   |       |   |   |   |
| Allowance for loan losses                              |   | $      | 2,392,936  |   |   | $      | 2,030,390 |   |
| Net unrealized losses on securities available for sale |   |   | -          |   |   |   | 88,495 |   |
| Other than temporary impairment                        |   |   | 2,063,918  |   |   |   | 3,605,328 |   |
| Other real estate owned                                |   |   | 1,213,129  |   |   |   | - |   |
| Other items                                            |   |   | 252,122    |   |   |   | 637,610 |   |
|                                                   |   |   | 5,922,105  |   |   |   | 6,361,823 |   |
| Deferred tax liabilities:                              |   |   |       |   |   |   |   |   |
| Net unrealized gains on securities available for sale  |   |   | (1,831,872 | )      |   |   | - |   |
| Other real estate owned                                |   |   | -          |   |   |   | (331,604 | ) |
| Other                                                  |   |   | (222,710   | )      |   |   | (192,175 | ) |
|                                                   |   |   | (2,054,582 | )      |   |   | (523,779 | ) |
|                                                   |   |   |       |   |   |   |   |   |
| Net deferred tax assets                                |   | $      | 3,867,523  |   |   | $      | 5,838,044 |   |

----

Table of Contents

|                         |   | 2009   |       |   | 2008   |   |
|------------------------------|--------|--------|------------|--------|--------|--------|
|                         |   |   |       |   |   |   |
| Commitments to extend credit |   | $      | 73,976,000 |   |   | $      | 68,633,000 |   |
| Standby letters of credit    |   |   | 1,727,000  |   |   |   | 1,887,000 |   |
|                         |   | $      | 75,703,000 |   |   | $      | 70,520,000 |   |

----

Table of Contents

----

Table of Contents

|                                         |   | Actual |    |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized Under Prompt Corrective Action Provisions |   |
|----------------------------------------------|--------|--------|---------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                                         |   | Amount |    |   | Ratio                         |   |   | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                         |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2009:                     |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets):     |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 116,366 |   |                          |   | 17.6   | %                                                                |   | $ | 52,994 |   |   |   | 8.0 | % |   |   | N/A |   |   |   | N/A |   |
| Boone Bank & Trust                       |   |   | 12,845  |   |                          |   | 17.3   |                                                             |   |   | 5,925 |   |   |   | 8.0 |   |   | $ | 7,407 |   |   |   | 10.0 | % |
| First National Bank                          |   |   | 47,179  |   |                          |   | 13.8   |                                                             |   |   | 37,656 |   |   |   | 11.0 |   |   |   | 37,656 |   |   |   | 11.0 |   |
| Randall-Story State Bank                     |   |   | 8,936   |   |                          |   | 14.7   |                                                             |   |   | 4,866 |   |   |   | 8.0 |   |   |   | 6,083 |   |   |   | 10.0 |   |
| State Bank & Trust                       |   |   | 13,740  |   |                          |   | 13.8   |                                                             |   |   | 7,981 |   |   |   | 8.0 |   |   |   | 9,976 |   |   |   | 10.0 |   |
| United Bank & Trust                      |   |   | 9,497   |   |                          |   | 15.0   |                                                             |   |   | 5,229 |   |   |   | 8.0 |   |   |   | 6,536 |   |   |   | 10.0 |   |
|                                         |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 capital (to risk-weighted assets):    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 108,348 |   |                          |   | 16.4   | %                                                                |   | $ | 26,497 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Boone Bank & Trust                       |   |   | 12,021  |   |                          |   | 16.2   |                                                             |   |   | 2,963 |   |   |   | 4.0 |   |   | $ | 4,444 |   |   |   | 6.0 | % |
| First National Bank                          |   |   | 43,974  |   |                          |   | 12.9   |                                                             |   |   | 13,693 |   |   |   | 4.0 |   |   |   | 20,539 |   |   |   | 6.0 |   |
| Randall-Story State Bank                     |   |   | 8,179   |   |                          |   | 13.5   |                                                             |   |   | 2,433 |   |   |   | 4.0 |   |   |   | 3,650 |   |   |   | 6.0 |   |
| State Bank & Trust                       |   |   | 12,491  |   |                          |   | 12.5   |                                                             |   |   | 3,990 |   |   |   | 4.0 |   |   |   | 5,985 |   |   |   | 6.0 |   |
| United Bank & Trust                      |   |   | 8,995   |   |                          |   | 13.8   |                                                             |   |   | 2,614 |   |   |   | 4.0 |   |   |   | 3,922 |   |   |   | 6.0 |   |
|                                         |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 capital (to average-weighted assets): |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 108,348 |   |                          |   | 12.0   | %                                                                |   | $ | 36,187 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Boone Bank & Trust                       |   |   | 12,021  |   |                          |   | 11.5   |                                                             |   |   | 4,185 |   |   |   | 4.0 |   |   | $ | 5,232 |   |   |   | 5.0 | % |
| First National Bank                          |   |   | 43,974  |   |                          |   | 9.5    |                                                             |   |   | 41,504 |   |   |   | 9.0 |   |   |   | 41,504 |   |   |   | 9.0 |   |
| Randall-Story State Bank                     |   |   | 8,179   |   |                          |   | 10.6   |                                                             |   |   | 3,085 |   |   |   | 4.0 |   |   |   | 3,856 |   |   |   | 5.0 |   |
| State Bank & Trust                       |   |   | 12,491  |   |                          |   | 9.0    |                                                             |   |   | 5,563 |   |   |   | 4.0 |   |   |   | 6,954 |   |   |   | 5.0 |   |
| United Bank & Trust                      |   |   | 8,995   |   |                          |   | 8.3    |                                                             |   |   | 4,347 |   |   |   | 4.0 |   |   |   | 5,433 |   |   |   | 5.0 |   |

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Table of Contents

|                                         |   | Actual |    |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized Under Prompt Corrective Action Provisions |   |
|----------------------------------------------|--------|--------|---------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                                         |   | Amount |    |   | Ratio                         |   |   | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                         |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2008:                     |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets):     |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 110,419 |   |                          |   | 16.8   | %                                                                |   | $ | 52,513 |   |   |   | 8.0 | % |   |   | N/A |   |   |   | N/A |   |
| Boone Bank & Trust                       |   |   | 12,930  |   |                          |   | 16.8   |                                                             |   |   | 6,152 |   |   |   | 8.0 |   |   | $ | 7,690 |   |   |   | 10.0 | % |
| First National Bank                          |   |   | 41,202  |   |                          |   | 12.4   |                                                             |   |   | 26,670 |   |   |   | 8.0 |   |   |   | 33,337 |   |   |   | 10.0 |   |
| Randall-Story State Bank                     |   |   | 8,734   |   |                          |   | 14.0   |                                                             |   |   | 4,984 |   |   |   | 8.0 |   |   |   | 6,230 |   |   |   | 10.0 |   |
| State Bank & Trust                       |   |   | 13,121  |   |                          |   | 13.4   |                                                             |   |   | 7,812 |   |   |   | 8.0 |   |   |   | 9,764 |   |   |   | 10.0 |   |
| United Bank & Trust                      |   |   | 8,797   |   |                          |   | 14.0   |                                                             |   |   | 5,017 |   |   |   | 8.0 |   |   |   | 6,271 |   |   |   | 10.0 |   |
|                                         |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 capital (to risk-weighted assets):    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 103,340 |   |                          |   | 15.7   | %                                                                |   | $ | 26,257 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Boone Bank & Trust                       |   |   | 12,108  |   |                          |   | 15.8   |                                                             |   |   | 3,076 |   |   |   | 4.0 |   |   | $ | 4,614 |   |   |   | 6.0 | % |
| First National Bank                          |   |   | 37,861  |   |                          |   | 11.4   |                                                             |   |   | 13,335 |   |   |   | 4.0 |   |   |   | 20,002 |   |   |   | 6.0 |   |
| Randall-Story State Bank                     |   |   | 8,090   |   |                          |   | 13.0   |                                                             |   |   | 2,492 |   |   |   | 4.0 |   |   |   | 3,738 |   |   |   | 6.0 |   |
| State Bank & Trust                       |   |   | 12,229  |   |                          |   | 12.5   |                                                             |   |   | 3,906 |   |   |   | 4.0 |   |   |   | 5,859 |   |   |   | 6.0 |   |
| United Bank & Trust                      |   |   | 8,609   |   |                          |   | 13.7   |                                                             |   |   | 2,509 |   |   |   | 4.0 |   |   |   | 3,763 |   |   |   | 6.0 |   |
|                                         |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 capital (to average-weighted assets): |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated                                 |   | $      | 103,340 |   |                          |   | 12.3   | %                                                                |   | $ | 33,647 |   |   |   | 4.0 | % |   |   | N/A |   |   |   | N/A |   |
| Boone Bank & Trust                       |   |   | 12,108  |   |                          |   | 11.9   |                                                             |   |   | 4,065 |   |   |   | 4.0 |   |   | $ | 5,081 |   |   |   | 5.0 | % |
| First National Bank                          |   |   | 37,861  |   |                          |   | 8.9    |                                                             |   |   | 17,044 |   |   |   | 4.0 |   |   |   | 21,305 |   |   |   | 5.0 |   |
| Randall-Story State Bank                     |   |   | 8,090   |   |                          |   | 10.9   |                                                             |   |   | 2,975 |   |   |   | 4.0 |   |   |   | 3,719 |   |   |   | 5.0 |   |
| State Bank & Trust                       |   |   | 12,229  |   |                          |   | 10.3   |                                                             |   |   | 4,768 |   |   |   | 4.0 |   |   |   | 5,960 |   |   |   | 5.0 |   |
| United Bank & Trust                      |   |   | 8,609   |   |                          |   | 8.7    |                                                             |   |   | 3,940 |   |   |   | 4.0 |   |   |   | 4,925 |   |   |   | 5.0 |   |

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Table of Contents

|                                                                       |   | 2009            |        |   | 2008       |   |
|----------------------------------------------------------------------------|--------|-----------------|-------------|--------|------------|--------|
|                                                                       |   | Carrying Amount |        |   | Fair Value |   |   | Carrying Amount |   |   | Fair Value |   |
|                                                                       |   |            |        |   |       |   |   |   |   |   |   |   |
| Financial assets:                                                          |   |            |        |   |       |   |   |   |   |   |   |   |
| Cash and due from banks                                                    |   | $               | 18,796,664  |   |       | $      | 18,797,000 |   |   | $ | 24,697,591 |   |   | $ | 24,698,000 |   |
| Federal funds sold                                                         |   |            | -           |   |       |   | - |   |   |   | 16,533,000 |   |   |   | 16,533,000 |   |
| Interest bearing deposits                                                  |   |            | 24,766,088  |   |       |   | 24,766,000 |   |   |   | 10,400,761 |   |   |   | 10,401,000 |   |
| Securities available-for-sale                                              |   |            | 418,655,018 |   |       |   | 418,655,000 |   |   |   | 313,014,375 |   |   |   | 313,014,000 |   |
| Loans receivable, net                                                      |   |            | 415,434,236 |   |       |   | 411,344,000 |   |   |   | 452,880,348 |   |   |   | 448,238,000 |   |
| Loans held for sale                                                        |   |            | 1,023,200   |   |       |   | 1,023,000 |   |   |   | 1,152,020 |   |   |   | 1,152,000 |   |
| Accrued income receivable                                                  |   |            | 5,710,226   |   |       |   | 5,710,000 |   |   |   | 6,650,287 |   |   |   | 6,650,000 |   |
| Financial liabilities:                                                     |   |            |        |   |       |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                   |   | $               | 722,163,949 |   |       | $      | 725,840,000 |   |   | $ | 664,794,710 |   |   | $ | 668,424,000 |   |
| Federal funds purchased and securities sold under agreements to repurchase |   |            | 40,489,505  |   |       |   | 40,490,000 |   |   |   | 38,509,559 |   |   |   | 38,510,000 |   |
| Other short-term borrowings                                                |   |            | 138,874     |   |       |   | 139,000 |   |   |   | 1,063,806 |   |   |   | 1,064,000 |   |
| Long-term borrowings                                                       |   |            | 36,500,000  |   |       |   | 41,504,000 |   |   |   | 43,500,000 |   |   |   | 46,286,000 |   |
| Accrued interest payable                                                   |   |            | 1,092,191   |   |       |   | 1,092,000 |   |   |   | 1,578,301 |   |   |   | 1,578,000 |   |

----

Table of Contents

|   | Level 1: | Inputs to the valuation methodology are quoted prices, unadjusted, for identical assets or liabilities in active markets. A quoted price in an active market provides the most reliable evidence of fair value and shall be used to measure fair value whenever available. |
|--------|----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 2: | Inputs to the valuation methodology include quoted prices for similar assets or liabilities in active markets; inputs to the valuation methodology include quoted prices for identical or similar assets or liabilities in markets that are not active; or inputs to the valuation methodology that are derived principally from or can be corroborated by observable market data by correlation or other means. |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | Level 3: | Inputs to the valuation methodology are unobservable and significant to the fair value measurement. Level 3 assets and liabilities include financial instruments whose value is determined using discounted cash flow methodologies, as well as instruments for which the determination of fair value requires significant management judgment or estimation. |
|--------|----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| Description                                        |   | Total  |        |   | Quoted Prices in Active markets for Identical Assets (Level 1) |   |      | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|----------------------------------------------------|--------|--------|-------------|--------|----------------------------------------------------------------|--------|-----------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|
|                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |
| 2009                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |
|                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |
| U.S. treasury                                      |   | $      | 525,000     |   |                                                           | $      | 525,000   |                                          |   | $      | -                                         |   |   | $ | - |   |
| U.S. government agencies                           |   |   | 106,640,000 |   |                                                           |   | -         |                                          |   |   | 106,640,000                               |   |   |   | - |   |
| U.S. government mortgage-backed secuirities        |   |   | 101,589,000 |   |                                                           |   | -         |                                          |   |   | 101,589,000                               |   |   |   | - |   |
| State and political subdivisions                   |   |   | 178,052,000 |   |                                                           |   | -         |                                          |   |   | 178,052,000                               |   |   |   | - |   |
| Corporate bonds                                    |   |   | 24,300,000  |   |                                                           |   | -         |                                          |   |   | 24,300,000                                |   |   |   | - |   |
| Equity securities, financial industry common stock |   |   | 2,347,000   |   |                                                           |   | 2,347,000 |                                          |   |   | -                                         |   |   |   | - |   |
| Equity securities, other                           |   |   | 5,202,000   |   |                                                           |   | 2,023,000 |                                          |   |   | 3,179,000                                 |   |   |   | - |   |
|                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |   |   |   |   |
|                                               |   | $      | 418,655,000 |   |                                                           | $      | 4,895,000 |                                          |   | $      | 413,760,000                               |   |   | $ | - |   |
|                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |   |   |   |   |
| 2008                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |   |   |   |   |
|                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |   |   |   |   |
| U.S. treasury                                      |   | $      | 546,000     |   |                                                           | $      | 546,000   |                                          |   | $      | -                                         |   |   | $ | - |   |
| U.S. government agencies                           |   |   | 49,694,000  |   |                                                           |   | -         |                                          |   |   | 49,694,000                                |   |   |   | - |   |
| U.S. government mortgage-backed securities         |   |   | 67,516,000  |   |                                                           |   | -         |                                          |   |   | 67,516,000                                |   |   |   | - |   |
| State and political subdivisions                   |   |   | 128,741,000 |   |                                                           |   | -         |                                          |   |   | 128,741,000                               |   |   |   | - |   |
| Corporate bonds                                    |   |   | 55,237,000  |   |                                                           |   | -         |                                          |   |   | 55,237,000                                |   |   |   | - |   |
| Equity securities, financial industry common stock |   |   | 5,615,000   |   |                                                           |   | 5,615,000 |                                          |   |   | -                                         |   |   |   | - |   |
| Equity securities, other                           |   |   | 5,665,000   |   |                                                           |   | 2,284,000 |                                          |   |   | 3,381,000                                 |   |   |   | - |   |
|                                               |   |   |        |   |                                                           |   |      |                                          |   |   |                                      |   |   |   |   |   |
|                                               |   | $      | 313,014,000 |   |                                                           | $      | 8,445,000 |                                          |   | $      | 304,569,000                               |   |   | $ | - |   |

----

Table of Contents

| Description             |   | Total  |       |   | Quoted Prices in Active markets for Identical Assets (Level 1) |   |   | Significant Other Observable Inputs (Level 2) |   |   | Significant Unobservable Inputs (Level 3) |   |
|-------------------------|--------|--------|------------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|
|                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |
| 2009                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |
|                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |
| Loans                   |   | $      | 9,188,000  |   |                                                           | $      | -      |                                          |   | $      | -                                         |   |   | $ | 9,188,000 |   |
|                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Other real estate owned |   |   | 10,480,000 |   |                                                           |   | -      |                                          |   |   | -                                         |   |   |   | 10,480,000 |   |
|                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Total                   |   | $      | 19,668,000 |   |                                                           | $      | -      |                                          |   | $      | -                                         |   |   | $ | 19,668,000 |   |
|                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| 2008                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
|                    |   |   |       |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |
| Loans                   |   | $      | 6,253,000  |   |                                                           | $      | -      |                                          |   | $      | -                                         |   |   | $ | 6,253,000 |   |

----

Table of Contents

| CONDENSED BALANCE SHEETS                      |   |
|-----------------------------------------------|--------|
| December 31, 2009 and 2008                    |   |
|                                          |   |   |   |   |   |   |
|                                          |   | 2009 |   |   | 2008 |   |
|                                          |   |   |   |   |   |   |
| ASSETS                                        |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |
| Cash and due from banks                       |   | $ | 26,797 |   |   | $ | 1,347 |   |
| Interest bearing deposits in banks            |   |   | 1,513,234 |   |   |   | 101,977 |   |
| Securities available-for-sale                 |   |   | 6,336,488 |   |   |   | 11,038,946 |   |
| Investment in bank subsidiaries               |   |   | 89,613,176 |   |   |   | 79,329,618 |   |
| Loans receivable, net                         |   |   | 13,859,423 |   |   |   | 18,619,318 |   |
| Premises and equipment, net                   |   |   | 603,571 |   |   |   | 645,109 |   |
| Accrued income receivable                     |   |   | 104,081 |   |   |   | 179,411 |   |
| Deferred income taxes                         |   |   | 976,000 |   |   |   | 690,860 |   |
| Other real estate owned                       |   |   | 197,313 |   |   |   | - |   |
| Other assets                                  |   |   | 260,955 |   |   |   | 243,661 |   |
|                                          |   |   |   |   |   |   |   |   |
| Total assets                                  |   | $ | 113,491,038 |   |   | $ | 110,850,247 |   |
|                                          |   |   |   |   |   |   |   |   |
| LIABILITIES                                   |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |
| Other borrowed funds                          |   | $ | - |   |   | $ | 4,160,000 |   |
| Dividends payable                             |   |   | 943,292 |   |   |   | 2,641,216 |   |
| Accrued expenses and other liabilities        |   |   | 207,858 |   |   |   | 211,581 |   |
|                                          |   |   |   |   |   |   |   |   |
| Total liabilities                             |   |   | 1,151,150 |   |   |   | 7,012,797 |   |
|                                          |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                          |   |   |   |   |   |   |   |   |
|                                          |   |   |   |   |   |   |   |   |
| Common stock                                  |   |   | 18,865,830 |   |   |   | 18,865,830 |   |
| Additional paid-in capital                    |   |   | 22,651,222 |   |   |   | 22,651,222 |   |
| Retained earnings                             |   |   | 67,703,701 |   |   |   | 62,471,081 |   |
| Accumulated other comprehensive income (loss) |   |   | 3,119,135 |   |   |   | (150,683 | ) |
| Total stockholders' equity                    |   |   | 112,339,888 |   |   |   | 103,837,450 |   |
|                                          |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity    |   | $ | 113,491,038 |   |   | $ | 110,850,247 |   |

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| CONDENSED STATEMENTS OF INCOME                            |   |
|-----------------------------------------------------------|--------|
| Years Ended December 31, 2009, 2008 and 2007              |   |
|                                                      |   |   |   |   |   |   |   |   |   |
|                                                      |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| Operating income:                                         |   |   |   |   |   |   |   |   |   |
| Equity in net income of bank subsidiaries                 |   | $ | 9,519,040 |   |   | $ | 5,125,234 |   |   | $ | 9,897,030 |   |
| Interest                                                  |   |   | 1,087,714 |   |   |   | 759,461 |   |   |   | 600,495 |   |
| Dividends                                                 |   |   | 181,137 |   |   |   | 673,506 |   |   |   | 1,045,125 |   |
| Rents                                                     |   |   | 96,765 |   |   |   | 88,624 |   |   |   | 84,058 |   |
| Other                                                     |   |   | 76,005 |   |   |   | - |   |   |   | - |   |
| Securities gains (losses), net                            |   |   | (17,163 | ) |   |   | 3,171,215 |   |   |   | 1,459,228 |   |
| Other-than-temporary impairment of investment securities  |   |   | - |   |   |   | (903,600 | ) |   |   | - |   |
|                                                      |   |   | 10,943,498 |   |   |   | 8,914,440 |   |   |   | 13,085,936 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision (credit) for loan losses                        |   |   | 300,000 |   |   |   | 327,558 |   |   |   | (16,000 | ) |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating income after provision (credit) for loan losses |   |   | 10,643,498 |   |   |   | 8,586,882 |   |   |   | 13,101,936 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Operating expenses                                        |   |   | 2,099,212 |   |   |   | 1,934,886 |   |   |   | 1,942,834 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Income before income taxes                                |   |   | 8,544,286 |   |   |   | 6,651,996 |   |   |   | 11,159,102 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense (benefit)                              |   |   | (461,500 | ) |   |   | 300,000 |   |   |   | 150,000 |   |
|                                                      |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                |   | $ | 9,005,786 |   |   | $ | 6,351,996 |   |   | $ | 11,009,102 |   |

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| CONDENSED STATEMENTS OF CASH FLOWS                                                |   |
|-----------------------------------------------------------------------------------|--------|
| Years Ended December 31, 2009, 2008 and 2007                                      |   |
|                                                                              |   |   |   |   |   |   |   |   |   |
|                                                                              |   | 2009 |   |   | 2008 |   |   | 2007 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                              |   |   |   |   |   |   |   |   |   |
| Net income                                                                        |   | $ | 9,005,786 |   |   | $ | 6,351,996 |   |   | $ | 11,009,102 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                      |   |   | 46,522 |   |   |   | 54,970 |   |   |   | 61,462 |   |
| Provision (credit) for loan losses                                                |   |   | 300,000 |   |   |   | 327,558 |   |   |   | (16,000 | ) |
| Amortization and accretion, net                                                   |   |   | (713 | ) |   |   | (18,734 | ) |   |   | (22,618 | ) |
| Provision for deferred taxes                                                      |   |   | (164,919 | ) |   |   | (123,005 | ) |   |   | (42,065 | ) |
| Securities (gains) losses, net                                                    |   |   | 17,163 |   |   |   | (3,171,215 | ) |   |   | (1,459,228 | ) |
| Other-than-temporary impairment of investment securities                          |   |   | - |   |   |   | 903,600 |   |   |   | - |   |
| Gain on sale of other real estate owned                                           |   |   | (47,146 | ) |   |   | - |   |   |   | - |   |
| Equity in net income of bank subsidiaries                                         |   |   | (9,519,040 | ) |   |   | (5,125,234 | ) |   |   | (9,897,030 | ) |
| Dividends received from bank subsidiaries                                         |   |   | 3,560,000 |   |   |   | 8,864,000 |   |   |   | 8,849,000 |   |
| Decrease in accrued income receivable                                             |   |   | 75,330 |   |   |   | 29,768 |   |   |   | 38,323 |   |
| Increase in other assets                                                          |   |   | (17,294 | ) |   |   | (176,535 | ) |   |   | (57,126 | ) |
| Decrease in accrued expense payable and other liabilities                         |   |   | (3,723 | ) |   |   | (131,592 | ) |   |   | (100,003 | ) |
| Net cash provided by operating activities                                         |   |   | 3,251,966 |   |   |   | 7,785,577 |   |   |   | 8,363,817 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Purchase of securities available-for-sale                                         |   |   | - |   |   |   | (9,303,034 | ) |   |   | (5,887,840 | ) |
| Proceeds from sale of securities available-for-sale                               |   |   | 4,211,087 |   |   |   | 13,159,215 |   |   |   | 14,436,995 |   |
| Proceeds from maturities and calls of securities available-for-sale               |   |   | 150,000 |   |   |   | 3,385,000 |   |   |   | 2,500,000 |   |
| Decrease (increase) in interest bearing deposits in banks                         |   |   | (1,411,257 | ) |   |   | 9,885,910 |   |   |   | (9,688,233 | ) |
| Decrease (increase) in loans                                                      |   |   | 3,986,345 |   |   |   | (18,746,876 | ) |   |   | 1,063,000 |   |
| Proceeds from the sale of other real estate owned                                 |   |   | 323,383 |   |   |   | - |   |   |   | - |   |
| Purchase of bank premises and equipment                                           |   |   | (4,984 | ) |   |   | (3,267 | ) |   |   | (6,282 | ) |
| Investment in bank subsidiaries                                                   |   |   | (850,000 | ) |   |   | - |   |   |   | (750,000 | ) |
| Net cash provided by (used in) investing activities                               |   |   | 6,404,574 |   |   |   | (1,623,052 | ) |   |   | 1,667,640 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Proceeds from other borrowings, net                                               |   |   | - |   |   |   | 4,160,000 |   |   |   | - |   |
| Payments of other borrowings, net                                                 |   |   | (4,160,000 | ) |   |   | - |   |   |   | - |   |
| Dividends paid                                                                    |   |   | (5,471,090 | ) |   |   | (10,468,702 | ) |   |   | (10,087,229 | ) |
| Proceeds from issuance of stock                                                   |   |   | - |   |   |   | 69,201 |   |   |   | 98,921 |   |
| Net cash used in financing activities                                             |   |   | (9,631,090 | ) |   |   | (6,239,501 | ) |   |   | (9,988,308 | ) |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| Net increase (decrease) in cash and cash equivalents                              |   |   | 25,450 |   |   |   | (76,976 | ) |   |   | 43,149 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| CASH AND DUE FROM BANKS                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning                                                                         |   |   | 1,347 |   |   |   | 78,323 |   |   |   | 35,174 |   |
| Ending                                                                            |   | $ | 26,797 |   |   | $ | 1,347 |   |   | $ | 78,323 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION                                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash payments for interest                                                        |   | $ | 59,432 |   |   | $ | 29,460 |   |   | $ | - |   |
| Cash payments (receipts) for income taxes                                         |   |   | (276,531 | ) |   |   | 793,080 |   |   |   | 321,045 |   |
|                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING ACTIVITIES                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Transfer of loans to other real estate owned                                      |   | $ | 473,550 |   |   | $ | - |   |   | $ | - |   |

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|                                        |   | 2009     |       |
|---------------------------------------------|--------|----------|------------|
|                                        |   | March 31 |       |   | June 30 |   |   | September 30 |   |   | December 31 |   |
|                                        |   |     |       |   |   |   |   |   |   |   |   |   |
| Total interest income                       |   | $        | 10,117,472 |   |   | $ | 9,826,268 |   |   | $ | 9,522,916 |   |   | $ | 9,424,651 |   |
| Total interest expense                      |   |     | 2,909,914  |   |   |   | 2,659,648 |   |   |   | 2,419,581 |   |   |   | 2,237,169 |   |
| Net interest income                         |   |     | 7,207,558  |   |   |   | 7,166,620 |   |   |   | 7,103,335 |   |   |   | 7,187,482 |   |
| Provision for loan losses                   |   |     | 229,654    |   |   |   | 326,670 |   |   |   | 635,171 |   |   |   | 366,812 |   |
| Net income                                  |   |     | 2,441,140  |   |   |   | 2,408,905 |   |   |   | 2,573,567 |   |   |   | 1,582,174 |   |
| Basic and diluted earnings per common share |   |     | 0.26       |   |   |   | 0.26 |   |   |   | 0.27 |   |   |   | 0.17 |   |

|                                        |   | 2008     |       |
|---------------------------------------------|--------|----------|------------|
|                                        |   | March 31 |       |   | June 30 |   |   | September 30 |   |   | December 31 |   |
|                                        |   |     |       |   |   |   |   |   |   |   |   |   |
| Total interest income                       |   | $        | 12,014,263 |   |   | $ | 11,537,705 |   |   | $ | 11,181,060 |   |   | $ | 10,781,139 |   |
| Total interest expense                      |   |     | 5,023,193  |   |   |   | 4,181,050 |   |   |   | 3,847,132 |   |   |   | 3,350,317 |   |
| Net interest income                         |   |     | 6,991,070  |   |   |   | 7,356,655 |   |   |   | 7,333,928 |   |   |   | 7,430,822 |   |
| Provision for loan losses                   |   |     | 109,699    |   |   |   | 818,995 |   |   |   | 73,514 |   |   |   | 310,577 |   |
| Net income                                  |   |     | 2,900,628  |   |   |   | 1,867,201 |   |   |   | 6,906 |   |   |   | 1,577,261 |   |
| Basic and diluted earnings per common share |   |     | 0.31       |   |   |   | 0.20 |   |   |   | - |   |   |   | 0.17 |   |

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ANGE

NTRO

THE

ECTO

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ECUT

CURI

RTA

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Table of Contents

INCIP

XHIBI

| (a) | List of Financial Statements and Schedules. |
|-----|---------------------------------------------|

|   | Reports of Clifton Gunderson LLP, Independent Registered Public Accounting Firm |
|--------|---------------------------------------------------------------------------------|

|   | Consolidated Balance Sheets, December 31, 2009 and 2008 |
|--------|---------------------------------------------------------|

|   | Consolidated Statements of Income for the Years ended December 31, 2009, 2008 and 2007 |
|--------|----------------------------------------------------------------------------------------|

|   | Consolidated Statements of Stockholders' Equity for the Years ended December 31, 2009, 2008 and 2007 |
|--------|------------------------------------------------------------------------------------------------------|

|   | Consolidated Statements of Cash Flows for the Years ended December 31, 2009, 2008 and 2007 |
|--------|--------------------------------------------------------------------------------------------|

|   | Notes to Consolidated Financial Statements |
|--------|--------------------------------------------|

| (b) | List of Exhibits. |
|-----|-------------------|

|   | 3.1 | - Restated Articles of Incorporation of the Company, as amended (incorporated by reference to Exhibit 3.1 to Form 8-K as filed June 16, 2005) |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.2 | - Bylaws of the Company, as amended (incorporated by reference to Exhibit 3.2 to Form 8-K as filed February 19, 2008) |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------|

|   | 10.1 | - Management Incentive Compensation Plan (incorporated by reference to Exhibit 10 filed with the Company’s Annual Report on Form 10K for the year ended December 31, 2002)* |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 21 | - Subsidiaries of the Registrant |
|--------|----|----------------------------------|

|   | 23 | - Consent of Independent Registered Public Accounting Firm |
|--------|----|------------------------------------------------------------|

|   | 31.1 | - Certification of Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------|

|   | 31.2 | - Certification of Principal Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------|

|   | 32.1 | - Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 |
|--------|------|-----------------------------------------------------------------------------------|

|   | 32.2 | - Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 |
|--------|------|-----------------------------------------------------------------------------------|

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|           | AMES NATIONAL CORPORATION      |
|----------------|--------------------------------|
|           |                           |
|           |                           |
| March 10, 2010 | By: /s/ Thomas H. Pohlman |
|           | Thomas H. Pohlman, President   |

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|   | /s/ Thomas H. Pohlman                        |   |
|--------|----------------------------------------------|--------|
|   | Thomas H. Pohlman, President                 |   |
|   | (Principal Executive Officer)                |   |
|   |                                         |   |
|   | /s/ John P. Nelson                           |   |
|   | John P. Nelson, Vice President               |   |
|   | (Principal Financial and Accounting Officer) |   |
|   |                                         |   |
|   | /s/ Betty A. Baudler Horras                  |   |
|   | Betty A. Baudler Horras, Director            |   |
|   |                                         |   |
|   | /s/ Robert L. Cramer                         |   |
|   | Robert L. Cramer, Director                   |   |
|   |                                         |   |
|   | /s/ Douglas C. Gustafson                     |   |
|   | Douglas C. Gustafson, Director               |   |
|   |                                         |   |
|   | /s/ Charles D. Jons                          |   |
|   | Charles D. Jons, Director                    |   |
|   |                                         |   |
|   | /s/ Steven D. Forth                          |   |
|   | Steven D. Forth, Director                    |   |
|   |                                         |   |
|   | /s/ James R. Larson II                       |   |
|   | James R. Larson II, Director                 |   |
|   |                                         |   |
|   | /s/ Daniel L. Krieger                        |   |
|   | Daniel L. Krieger, Director                  |   |
|   |                                         |   |
|   | /s/ Warren R. Madden                         |   |
|   | Warren R. Madden, Director                   |   |
|   |                                         |   |
|   | /s/ Larry A. Raymon                          |   |
|   | Larry A. Raymon, Director                    |   |
|   |                                         |   |
|   | /s/ Fred C. Samuelson                        |   |
|   | Fred C. Samuelson, Director                  |   |
|   |                                         |   |
|   | /s/ Marvin J. Walter                         |   |
|   | Marvin J. Walter, Director                   |   |

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| Exhibit No. |   | Description                                                                                             |
|-------------|--------|---------------------------------------------------------------------------------------------------------|
| 21          |   | -Subsidiaries of the Registrant                                                                         |
| 23          |   | -Consent of Independent Registered Public Accounting Firm.                                              |
| 31.1        |   | -Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| 31.2        |   | -Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act of 2002 |
| 32.1        |   | -Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350                        |
| 32.2        |   | -Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350                        |

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