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Neffs Bancorp, Inc. 10-K

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| Directors of the Corporationand BANK |
|-------------------------------------------|
|                                      |   |   |
| Robert B. Heintzelman                     |   | John J. Remaley |
|                                      | Duane A. Schleicher |   |
| Kevin A. Schmidt                          |   | John F. Sharkey, Jr. |
|                                      | John F. Simock |   |
| Dean H. Snyder                            |   | Mary Ann Wagner |

| Officers of the Corporation |
|-----------------------------|
|                        |   |   |
| John J. Remaley             |   | Kevin A. Schmidt |
| President                   |   | Vice President |
|                        |   |   |
|                        |   |   |
| David C. Matulevich         |   | Michael J. Bailey |
| Secretary/Treasurer         |   |  Assistant Secretary |

| Officers of the Bank  |                                                         |
|-----------------------|--------------------------------------------------------------|
|                  |                                                         |   |
| John J. Remaley       |                                                         | Kevin A. Schmidt |
| Chairman of the Board |                                                         | President andChief Executive Officer |
|                  |                                                         |   |
|                  | Michael J. Bailey                                            |   |
|                  | Executive Vice President,Cashier andChief Operations Officer |   |

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| CONSOLIDATED FINANCIAL STATEMENTS: |                                                                                              |   |
|------------------------------------|---------------------------------------------------------------------------------------------------|--------|
|                               |                                                                                              |   |   |
|                               | Report of Independent Registered Public Accounting Firm                                           |   | 1 |
|                               |  Consolidated Statements of Financial Condition                                              |   | 2 |
|                               |  Consolidated Statements of Income                                                           |   | 3 |
|                               |  Consolidated Statements of Stockholders’ Equity                                       |   | 4 |
|                               |  Consolidated Statements of Cash Flows                                                       |   | 5 |
|                               |  Notes to Consolidated Financial Statements                                                  |   | 6 |
|                               |  Selected Financial Data                                                                     |   | 32 |
|                               |  Quarterly Summary of Financial Data                                                         |   | 33 |
|                               |  Common Stock Information                                                                    |   | 34 |
|                               |  Management’s Discussion and Analysis of Financial Condition and Results of Operations |   | 35 |

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Report of Independent Registered Public Accounting Firm

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| Neffs Bancorp, Inc. and Subsidiary             |
|------------------------------------------------|
| Consolidated Statements of Financial Condition |

|                                                                                                                         |   | December 31,                      |    |
|------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------|---------|
|                                                                                                                         |   | 2010                              |    |   | 2009 |   |
|                                                                                                                         |   | (In Thousands, Except Share Data) |    |
| Assets                                                                                                                       |   |                              |    |   |   |   |
| Cash and cash equivalents                                                                                                    |   | $                                 | 7,448   |   |   | $ | 2,187 |   |
| Interest bearing deposits with banks                                                                                         |   |                              | 141     |   |   |   | 101 |   |
| Federal funds sold                                                                                                           |   |                              | -       |   |   |   | 2,933 |   |
| Securities available for sale                                                                                                |   |                              | 41,828  |   |   |   | 34,991 |   |
| Securities held to maturity, fair value 2010: $98,617; 2009: $97,538                                                         |   |                              | 101,932 |   |   |   | 100,976 |   |
| Loans receivable, net of allowance for loan losses 2010: $1,114; 2009: $829                                                  |   |                              | 120,772 |   |   |   | 111,159 |   |
| Premises and equipment, net                                                                                                  |   |                              | 2,341   |   |   |   | 2,446 |   |
| Restricted investments in bank stock                                                                                         |   |                              | 809     |   |   |   | 848 |   |
| Other assets                                                                                                                 |   |                              | 3,192   |   |   |   | 2,536 |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Total Assets                                                                                                                 |   | $                                 | 278,463 |   |   | $ | 258,177 |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Liabilities and Stockholders’ Equity                                                                                   |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Liabilities:                                                                                                                 |   |                              |    |   |   |   |   |   |
| Deposits:                                                                                                                    |   |                              |    |   |   |   |   |   |
| Non-interest bearing                                                                                                         |   | $                                 | 18,480  |   |   | $ | 18,177 |   |
| Interest bearing                                                                                                             |   |                              | 212,207 |   |   |   | 193,214 |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Total Deposits                                                                                                               |   |                              | 230,687 |   |   |   | 211,391 |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Other liabilities                                                                                                            |   |                              | 1,079   |   |   |   | 1,158 |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Total Liabilities                                                                                                            |   |                              | 231,766 |   |   |   | 212,549 |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Stockholders’ equity:                                                                                                  |   |                              |    |   |   |   |   |   |
| Common stock, $1 par value; authorized 2,500,000 shares;issued 200,000 shares; outstanding shares 2010 179,460; 2009 183,608 |   |                              | 200     |   |   |   | 200 |   |
| Paid-in capital                                                                                                              |   |                              | 753     |   |   |   | 753 |   |
| Retained earnings                                                                                                            |   |                              | 50,818  |   |   |   | 48,255 |   |
| Accumulated other comprehensive income                                                                                       |   |                              | 138     |   |   |   | 556 |   |
| Treasury stock, at cost 2010 20,540 shares; 2009 16,392 shares                                                               |   |                              | (5,212  | ) |   |   | (4,136 | ) |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Total Stockholders’ Equity                                                                                             |   |                              | 46,697  |   |   |   | 45,628 |   |
|                                                                                                                         |   |                              |    |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity                                                                             |   | $                                 | 278,463 |   |   | $ | 258,177 |   |

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| Neffs Bancorp, Inc. and Subsidiary |
|------------------------------------|
| Consolidated Statements of Income  |

|                                                                    |   | Years Ended December 31,                      |    |
|-------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                    |   | 2010                                          |    |   | 2009 |   |   | 2008 |   |
|                                                                    |   | (Dollars in Thousands, Except per Share Data) |    |
| Interest Income                                                         |   |                                          |    |   |   |   |   |   |   |
| Interest and fees on loans                                              |   | $                                             | 7,102   |   |   | $ | 6,777 |   |   | $ | 6,456 |   |
| Interest and dividends on investments:                                  |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Taxable                                                                 |   |                                          | 4,774   |   |   |   | 5,304 |   |   |   | 4,876 |   |
| Exempt from federal income taxes                                        |   |                                          | 1,612   |   |   |   | 1,386 |   |   |   | 1,528 |   |
| Interest on federal funds sold and other                                |   |                                          | 5       |   |   |   | 4 |   |   |   | 12 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Total Interest Income                                                   |   |                                          | 13,493  |   |   |   | 13,471 |   |   |   | 12,872 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Interest Expense                                                        |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Deposits                                                                |   |                                          | 4,878   |   |   |   | 5,472 |   |   |   | 6,099 |   |
| Federal funds purchased                                                 |   |                                          | -       |   |   |   | 2 |   |   |   | 23 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Total Interest Expense                                                  |   |                                          | 4,878   |   |   |   | 5,474 |   |   |   | 6,122 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Net Interest Income                                                     |   |                                          | 8,615   |   |   |   | 7,997 |   |   |   | 6,750 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Provision for Loan Losses                                               |   |                                          | 368     |   |   |   | 84 |   |   |   | 145 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Net Interest Income after Provision for Loan Losses                     |   |                                          | 8,247   |   |   |   | 7,913 |   |   |   | 6,605 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Other Income  (Expense)                                       |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Impairment charge on securities                                         |   |                                          | (883    | ) |   |   | (948 | ) |   |   | - |   |
| Portion of losses recognized in other comprehensive income (before tax) |   |                                          | 350     |   |   |   | 289 |   |   |   | - |   |
| Net impairment losses                                                   |   |                                          | (533    | ) |   |   | (659 | ) |   |   | - |   |
| Service charges on deposit accounts                                     |   |                                          | 114     |   |   |   | 120 |   |   |   | 130 |   |
| Other service charges and fees                                          |   |                                          | 102     |   |   |   | 95 |   |   |   | 98 |   |
| Gain on called securities                                               |   |                                          | 9       |   |   |   | 10 |   |   |   | - |   |
| Other income                                                            |   |                                          | 40      |   |   |   | 44 |   |   |   | 49 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Total Other Income (Expense)                                            |   |                                          | (268    | ) |   |   | (390 | ) |   |   | 277 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Other Expenses                                                          |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Salaries and employee benefits                                          |   |                                          | 1,594   |   |   |   | 1,446 |   |   |   | 1,427 |   |
| Occupancy                                                               |   |                                          | 229     |   |   |   | 214 |   |   |   | 190 |   |
| Furniture and equipment                                                 |   |                                          | 261     |   |   |   | 259 |   |   |   | 233 |   |
| Pennsylvania shares tax                                                 |   |                                          | 470     |   |   |   | 445 |   |   |   | 423 |   |
| FDIC expense                                                            |   |                                          | 207     |   |   |   | 338 |   |   |   | 52 |   |
| Other expenses                                                          |   |                                          | 816     |   |   |   | 719 |   |   |   | 691 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Total Other Expenses                                                    |   |                                          | 3,577   |   |   |   | 3,421 |   |   |   | 3,016 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Income before Income Taxes                                              |   |                                          | 4,402   |   |   |   | 4,102 |   |   |   | 3,866 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Income Tax Expense                                                      |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Current                                                                 |   |                                          | 885     |   |   |   | 851 |   |   |   | 724 |   |
| Deferred                                                                |   |                                          | 91      |   |   |   | 90 |   |   |   | 105 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Total Income Tax Expense                                                |   |                                          | 976     |   |   |   | 941 |   |   |   | 829 |   |
|                                                                    |   |                                          |    |   |   |   |   |   |   |   |   |   |
| Net Income                                                              |   | $                                             | 3,426   |   |   | $ | 3,161 |   |   | $ | 3,037 |   |
| Earnings per Share, Basic                                               |   | $                                             | 18.86   |   |   | $ | 16.96 |   |   | $ | 16.00 |   |
| Weighted Average Common Shares Outstanding                              |   |                                          | 181,684 |   |   |   | 186,417 |   |   |   | 189,861 |   |

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| Neffs Bancorp, Inc. and Subsidiary                                                                                                                                        |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Consolidated Statements of Stockholders’ Equity            Years Ended December 31, 2010, 2009 and 2008 |

|                                                                                   |   | CommonStock                                                           |   |   | Paid-inCapital |   |   | RetainedEarnings |   |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   | TreasuryStock |   |   | TotalStockholders’Equity |   |
|----------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------|--------|--------|----------------|--------|--------|------------------|--------|--------|--------------------------------------------|--------|--------|---------------|--------|--------|--------------------------------|--------|
|                                                                                   |   |    (Dollars in Thousands, Except per Share Data)  |   |
| Balance - December 31, 2007                                                            |   |                                                                  | 200    |   |           |   | 753    |             |   |   | 43,558                                     |   |   |          | (373   | )      |                           |   | (2,308 | ) |   |   | 41,830 |   |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Comprehensive income:                                                                  |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Net income                                                                             |   |                                                                  | -      |   |           |   | -      |             |   |   | 3,037                                      |   |   |          | -      |   |                           |   | - |   |   |   | 3,037 |   |
| Change in unrealized net gains (losses) on securities available for sale, net of taxes |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | 815    |   |                           |   | - |   |   |   | 815 |   |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Total Comprehensive Income                                                             |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   | 3,852 |   |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Cash dividends declared on common stock, $4.00 per share                               |   |                                                                  | -      |   |           |   | -      |             |   |   | (759                                       | )      |   |          | -      |   |                           |   | - |   |   |   | (759 | ) |
| Purchase of treasury stock (1,505 shares)                                              |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | -      |   |                           |   | (394 | ) |   |   | (394 | ) |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Balance - December 31, 2008                                                            |   |                                                                  | 200    |   |           |   | 753    |             |   |   | 45,836                                     |   |   |          | 442    |   |                           |   | (2,702 | ) |   |   | 44,529 |   |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Comprehensive income:                                                                  |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Net income                                                                             |   |                                                                  | -      |   |           |   | -      |             |   |   | 3,161                                      |   |   |          | -      |   |                           |   | - |   |   |   | 3,161 |   |
| Change in unrealized net gains (losses) on securities available for sale, net of taxes |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | 306    |   |                           |   | - |   |   |   | 306 |   |
| Unrealized losses on OTTI securities held to maturity, net of taxes                    |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | (192   | )      |                           |   | - |   |   |   | (192 | ) |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Total Comprehensive Income                                                             |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   | 3,275 |   |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Cash dividends declared on common stock, $4.00 per share                               |   |                                                                  | -      |   |           |   | -      |             |   |   | (742                                       | )      |   |          | -      |   |                           |   | - |   |   |   | (742 | ) |
| Purchase of treasury stock (5,642 shares)                                              |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | -      |   |                           |   | (1,434 | ) |   |   | (1,434 | ) |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Balance - December 31, 2009                                                            |   |                                                                  | 200    |   |           |   | 753    |             |   |   | 48,255                                     |   |   |          | 556    |   |                           |   | (4,136 | ) |   |   | 45,628 |   |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Comprehensive income:                                                                  |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Net income                                                                             |   |                                                                  | -      |   |           |   | -      |             |   |   | 3,426                                      |   |   |          | -      |   |                           |   | - |   |   |   | 3,426 |   |
| Change in unrealized net gains (losses) on securities available for sale, net of taxes |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | (187   | )      |                           |   | - |   |   |   | (187 | ) |
| Unrealized losses on OTTI securities held to maturity, net of taxes                    |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | (231   | )      |                           |   | - |   |   |   | (231 | ) |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Total Comprehensive Income                                                             |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   | 3,008 |   |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Cash dividends declared on common stock, $4.75 per share                               |   |                                                                  | -      |   |           |   | -      |             |   |   | (863                                       | )      |   |          | -      |   |                           |   | - |   |   |   | (863 | ) |
| Purchase of treasury stock (4,148 shares)                                              |   |                                                                  | -      |   |           |   | -      |             |   |   | -                                          |   |   |          | -      |   |                           |   | (1,076 | ) |   |   | (1,076 | ) |
|                                                                                   |   |                                                                  |   |   |           |   |   |             |   |   |                                       |   |   |          |   |   |                           |   |   |   |   |   |   |   |
| Balance - December 31, 2010                                                            |   | $                                                                     | 200    |   |           | $      | 753    |             |   | $      | 50,818                                     |   |   | $             | 138    |   |                           | $      | (5,212 | ) |   | $ | 46,697 |   |

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| Neffs Bancorp, Inc. and Subsidiary   |
|--------------------------------------|
| Consolidated Statements of Cash Flow |

|                                                                                     |   | Years Ended December 31, |    |
|------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                     |   | 2010                     |    |   | 2009 |   |   | 2008 |   |
|                                                                                     |   | (In Thousands)           |    |
| Cash Flows from Operating Activities                                                     |   |                     |    |   |   |   |   |   |   |
| Net income                                                                               |   | $                        | 3,426   |   |   | $ | 3,161 |   |   | $ | 3,037 |   |
| Adjustments to reconcile net income to net cash provided by operating activities:        |   |                     |    |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                             |   |                     | 236     |   |   |   | 232 |   |   |   | 193 |   |
| Provision for loan loss                                                                  |   |                     | 368     |   |   |   | 84 |   |   |   | 145 |   |
| Net accretion of securities                                                              |   |                     | (33     | ) |   |   | (626 | ) |   |   | (512 | ) |
| Impairment charges on securities                                                         |   |                     | 533     |   |   |   | 659 |   |   |   | - |   |
| Gain on called securities                                                                |   |                     | (9      | ) |   |   | (10 | ) |   |   | - |   |
| Deferred income tax expense                                                              |   |                     | 114     |   |   |   | 90 |   |   |   | 105 |   |
| (Increase) decrease in assets:                                                           |   |                     |    |   |   |   |   |   |   |   |   |   |
| Accrued interest receivable                                                              |   |                     | (221    | ) |   |   | (115 | ) |   |   | (86 | ) |
| Prepaid FDIC assessments                                                                 |   |                     | 184     |   |   |   | (705 | ) |   |   | - |   |
| Other assets                                                                             |   |                     | (516    | ) |   |   | 111 |   |   |   | (167 | ) |
| Increase (decrease) in liabilities:                                                      |   |                     |    |   |   |   |   |   |   |   |   |   |
| Accrued interest payable                                                                 |   |                     | (72     | ) |   |   | (172 | ) |   |   | (23 | ) |
| Other liabilities                                                                        |   |                     | (7      | ) |   |   | 15 |   |   |   | 11 |   |
| Net Cash Provided by Operating Activities                                                |   |                     | 4,003   |   |   |   | 2,724 |   |   |   | 2,703 |   |
|                                                                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Net (increase) decrease in interest bearing deposits with banks                          |   |                     | (40     | ) |   |   | 8 |   |   |   | 9 |   |
| Net (increase) decrease in federal funds sold                                            |   |                     | 2,933   |   |   |   | (1,554 | ) |   |   | (1,379 | ) |
| Purchases of securities available for sale                                               |   |                     | (18,499 | ) |   |   | (6,376 | ) |   |   | (7,961 | ) |
| Purchases of securities held to maturity                                                 |   |                     | (60,432 | ) |   |   | (53,633 | ) |   |   | (39,150 | ) |
| Proceeds from maturities/calls and principal repayments of securities available for sale |   |                     | 11,237  |   |   |   | 9,724 |   |   |   | 6,851 |   |
| Proceeds from maturities/calls of securities held to maturity                            |   |                     | 58,775  |   |   |   | 43,976 |   |   |   | 34,991 |   |
| Net (increase) decrease in restricted investment in bank stock                           |   |                     | 39      |   |   |   | (45 | ) |   |   | (89 | ) |
| Net increase in loans                                                                    |   |                     | (10,449 | ) |   |   | (11,051 | ) |   |   | (6,347 | ) |
| Proceeds from sale of other real estate owned                                            |   |                     | 468     |   |   |   | - |   |   |   | - |   |
| Purchases of premises and equipment                                                      |   |                     | (131    | ) |   |   | (352 | ) |   |   | (172 | ) |
| Net Cash Used in Investing Activities                                                    |   |                     | (16,099 | ) |   |   | (19,303 | ) |   |   | (13,247 | ) |
|                                                                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Net increase in deposits                                                                 |   |                     | 19,296  |   |   |   | 18,453 |   |   |   | 12,547 |   |
| Net decrease in federal funds purchased                                                  |   |                     | -       |   |   |   | - |   |   |   | (2,249 | ) |
| Dividends paid                                                                           |   |                     | (863    | ) |   |   | (742 | ) |   |   | (759 | ) |
| Purchase of treasury stock                                                               |   |                     | (1,076  | ) |   |   | (1,434 | ) |   |   | (394 | ) |
| Net Cash Provided by Financing Activities                                                |   |                     | 17,357  |   |   |   | 16,277 |   |   |   | 9,145 |   |
| Net  Increase (Decrease) in Cash and Cash Equivalents                          |   |                     | 5,261   |   |   |   | (302 | ) |   |   | (1,399 | ) |
|                                                                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents - Beginning                                                    |   |                     | 2,187   |   |   |   | 2,489 |   |   |   | 3,888 |   |
| Cash and Cash Equivalents - Ending                                                       |   | $                        | 7,448   |   |   | $ | 2,187 |   |   | $ | 2,489 |   |
|                                                                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Supplementary Cash Flows Information                                                     |   |                     |    |   |   |   |   |   |   |   |   |   |
| Interest paid                                                                            |   | $                        | 4,950   |   |   | $ | 5,646 |   |   | $ | 6,145 |   |
| Income taxes paid                                                                        |   | $                        | 1,374   |   |   | $ | 650 |   |   | $ | 901 |   |
| Supplementary Schedule of Non cash Investing Activities                                  |   |                     |    |   |   |   |   |   |   |   |   |   |
| Transfer to OREO                                                                         |   | $                        | 468     |   |   | $ | - |   |   | $ | - |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|   | ● | historical loan loss experience, |
|--------|---------|----------------------------------|

|   | ● | recent trends in losses, |
|--------|---------|--------------------------|

|   | ● | changes in lending policies and procedures including underwriting standards and collection, charge-off, and recovery practices, |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------|

|   | ● | changes in national and local economic and business conditions including condition of various market segments, |
|--------|---------|----------------------------------------------------------------------------------------------------------------|

|   | ● | changes in nature and volume of the portfolio, |
|--------|---------|------------------------------------------------|

|   | ● | experience, ability, and depth of lending management and staff, |
|--------|---------|-----------------------------------------------------------------|

|   | ● | trends in the volume and severity of past due and classified loans and volume of non-accrual loans, troubled debt restructuring, and other loan modifications, |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | changes in the quality of the Bank’s loan review system, |
|--------|---------|----------------------------------------------------------------|

|   | ● | the existence and effect of any large credits and concentrations of credit and changes in the level of such concentrations, |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------|

|   | ● | the effect of external factors, such as competition and legal and regulatory requirements, on the level of estimated credit losses in the portfolio, and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | trends in values of collateral and lending standards relating to various types of collateral. |
|--------|---------|-----------------------------------------------------------------------------------------------|

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|   | ● | A reporting entity to disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers; and |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | In the reconciliation for fair value measurements using significant unobservable inputs, a reporting entity should present separately information about purchases, sales, issuances, and settlements. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | For purposes of reporting fair value measurement for each class of assets and liabilities, a reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                                          |   | December 31, 2010 |    |
|---------------------------------------------------------------|--------|-------------------|---------|
|                                                          |   | AmortizedCost     |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|                                                          |   | (In Thousands)    |    |
| Securities Available for Sale:                                |   |              |    |   |   |   |   |   |   |   |   |   |
| U.S. Treasury note                                            |   | $                 | 100     |   |   | $ | 6 |   |   | $ | - |   |   | $ | 106 |   |
| Mortgage-backed securities (Government agencies- residential) |   |              | 40,879  |   |   |   | 1,229 |   |   |   | (386 | ) |   |   | 41,722 |   |
|                                                          |   | $                 | 40,979  |   |   | $ | 1,235 |   |   | $ | (386 | ) |   | $ | 41,828 |   |
| Securities Held to Maturity:                                  |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Governmentagencies                        |   | $                 | 36,738  |   |   | $ | 189 |   |   | $ | (590 | ) |   | $ | 36,337 |   |
| Obligations of states and politicalsubdivisions               |   |              | 61,040  |   |   |   | 672 |   |   |   | (1,803 | ) |   |   | 59,909 |   |
| Corporate securities                                          |   |              | 1,350   |   |   |   | 41 |   |   |   | - |   |   |   | 1,391 |   |
| Collateralized debt obligations                               |   |              | 2,138   |   |   |   | - |   |   |   | (1,896 | ) |   |   | 242 |   |
| Mortgage-backed securities (Government agencies- residential) |   |              | 666     |   |   |   | 72 |   |   |   | - |   |   |   | 738 |   |
|                                                          |   | $                 | 101,932 |   |   | $ | 974 |   |   | $ | (4,289 | ) |   | $ | 98,617 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                             |   | December 31, 2009 |    |
|--------------------------------------------------|--------|-------------------|---------|
|                                             |   | AmortizedCost     |    |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|                                             |   | (In Thousands)    |    |
| Securities Available for Sale:                   |   |              |    |   |   |   |   |   |   |   |   |   |
| U.S. Treasury note                               |   | $                 | 100     |   |   | $ | 4 |   |   | $ | - |   |   | $ | 104 |   |
| Mortgage-backed securities                       |   |              | 33,758  |   |   |   | 1,144 |   |   |   | (15 | ) |   |   | 34,887 |   |
|                                             |   | $                 | 33,858  |   |   | $ | 1,148 |   |   | $ | (15 | ) |   | $ | 34,991 |   |
| Securities Held to Maturity:                     |   |              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies          |   | $                 | 59,576  |   |   | $ | 231 |   |   | $ | (2,832 | ) |   | $ | 56,975 |   |
| Obligations of states and political subdivisions |   |              | 36,257  |   |   |   | 1,340 |   |   |   | (139 | ) |   |   | 37,458 |   |
| Corporate securities                             |   |              | 1,350   |   |   |   | 44 |   |   |   | (5 | ) |   |   | 1,389 |   |
| Collateralized debt obligations                  |   |              | 2,955   |   |   |   | - |   |   |   | (2,122 | ) |   |   | 833 |   |
| Mortgage-backed securities                       |   |              | 838     |   |   |   | 45 |   |   |   | - |   |   |   | 883 |   |
|                                             |   | $                 | 100,976 |   |   | $ | 1,660 |   |   | $ | (5,098 | ) |   | $ | 97,538 |   |

|                                   |   | Available for Sale |   |   | Held to Maturity |   |
|----------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                   |   | AmortizedCost      |   |   | FairValue        |   |   | AmortizedCost |   |   | FairValue |   |
|                                   |   | (In Thousands)     |   |
| Due in one year or less                |   | $                  | -      |   |             | $      | - |   |   | $ | 1,555 |   |   | $ | 1,583 |   |
| Due after one year through five years  |   |               | 100    |   |             |   | 106 |   |   |   | 6,695 |   |   |   | 6,947 |   |
| Due after five years through ten years |   |               | -      |   |             |   | - |   |   |   | 11,420 |   |   |   | 11,734 |   |
| Due after ten years                    |   |               | -      |   |             |   | - |   |   |   | 81,596 |   |   |   | 77,615 |   |
|                                   |   |               | 100    |   |             |   | 106 |   |   |   | 101,266 |   |   |   | 97,879 |   |
| Mortgage-backed securities             |   |               | 40,879 |   |             |   | 41,722 |   |   |   | 666 |   |   |   | 738 |   |
|                                   |   | $                  | 40,979 |   |             | $      | 41,828 |   |   | $ | 101,932 |   |   | $ | 98,617 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                                                                              |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|---------------------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                              |   | (In Thousands) |   |
| Gross change in unrealized gains (losses) on securities available for sale                        |   | $              | (284   | )      |   | $      | 463    |   |   | $ | 1,235 |   |
| Non-credit related impairment loss on other-than-temporarily impaired held to maturity securities |   |           | (350   | )      |   |   | (289   | )      |   |   | - |   |
| Net Unrealized Gains (Losses)                                                                     |   |           | (634   | )      |   |   | 174    |   |   |   | 1,235 |   |
| Tax effect                                                                                        |   |           | 216    |   |   |   | (60    | )      |   |   | (420 | ) |
| Net of Tax Amount                                                                                 |   | $              | (418   | )      |   | $      | 114    |   |   | $ | 815 |   |

|                                             |   | Less than 12 Months |   |   | 12 Months or More |   |   | Total     |   |
|--------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|-----------|--------|
|                                             |   | FairValue           |   |   | Unrealized Losses |   |   | FairValue |   |   | Unrealized Losses |   |   | FairValue |   |   | Unrealized Losses |   |
|                                             |   | (In Thousands)      |   |
| DECEMBER 31, 2010:                               |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                   |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                       |   | $                   | 16,990 |   |              | $      | 386    |      |   | $ | - |   |   | $ | - |   |   | $ | 16,990 |   |   | $ | 386 |   |
| Securities Held to Maturity:                     |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies          |   |                | 17,864 |   |              |   | 482    |      |   |   | 7,668 |   |   |   | 108 |   |   |   | 25,532 |   |   |   | 590 |   |
| Obligations of states and political subdivisions |   |                | 28,900 |   |              |   | 1,665  |      |   |   | 3,857 |   |   |   | 138 |   |   |   | 32,757 |   |   |   | 1,803 |   |
| Collateralized debt obligations                  |   |                | -      |   |              |   | -      |      |   |   | 242 |   |   |   | 1,896 |   |   |   | 242 |   |   |   | 1,896 |   |
| Total Temporarily Impaired Securities            |   | $                   | 63,754 |   |              | $      | 2,533  |      |   | $ | 11,767 |   |   | $ | 2,142 |   |   | $ | 75,521 |   |   | $ | 4,675 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                             |   | Less than 12 Months |   |   | 12 Months or More |   |   | Total     |   |
|--------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|-----------|--------|
|                                             |   | FairValue           |   |   | Unrealized Losses |   |   | FairValue |   |   | Unrealized Losses |   |   | FairValue |   |   | Unrealized Losses |   |
|                                             |   | (In Thousands)      |   |
| DECEMBER 31, 2009:                               |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Securities Available for Sale:                   |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities                       |   | $                   | 981    |   |              | $      | 15     |      |   | $ | - |   |   | $ | - |   |   | $ | 981 |   |   | $ | 15 |   |
| Securities Held to Maturity:                     |   |                |   |   |              |   |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies          |   |                | 39,065 |   |              |   | 2,379  |      |   |   | 9,672 |   |   |   | 453 |   |   |   | 48,737 |   |   |   | 2,832 |   |
| Obligations of states and political subdivisions |   |                | 5,422  |   |              |   | 137    |      |   |   | 297 |   |   |   | 2 |   |   |   | 5,719 |   |   |   | 139 |   |
| Corporate securities                             |   |                | -      |   |              |   | -      |      |   |   | 194 |   |   |   | 5 |   |   |   | 194 |   |   |   | 5 |   |
| Collateralized debt obligations                  |   |                | -      |   |              |   | -      |      |   |   | 833 |   |   |   | 2,122 |   |   |   | 833 |   |   |   | 2,122 |   |
| Total Temporarily Impaired Securities            |   | $                   | 45,468 |   |              | $      | 2,531  |      |   | $ | 10,996 |   |   | $ | 2,582 |   |   | $ | 56,464 |   |   | $ | 5,113 |   |

|                       |   | 2010                 |    |   |   | 2009   | *       |
|----------------------------|--------|----------------------|---------|--------|--------|--------|---------|
|                       |   | (In Thousands)  |    |
| Commercial real estate     |   | $                    | 39,311  |   |   | $      | 32,378  |   |
| Commercial non-real estate |   |                 | 5,192   |   |   |   | 4,810   |   |
| Residential real estate    |   |                 | 54,869  |   |   |   | 50,587  |   |
| Real estate construction   |   |                 | 401     |   |   |   | 270     |   |
| Home equity                |   |                 | 14,982  |   |   |   | 16,905  |   |
| Other consumer             |   |                 | 7,131   |   |   |   | 7,038   |   |
|                       |   |                 | 121,886 |   |   |   | 111,988 |   |
| Allowance for loan losses  |   |                 | (1,114  | )      |   |   | (829    | ) |
|                       |   |                 |    |   |   |   |    |   |
|                       |   | $                    | 120,772 |   |   | $      | 111,159 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                       |   | 2010           |   |   | 2009   |   |   | 2008   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|
|                                       |   | (In Thousands) |   |
| Balance, beginning                         |   | $              | 829    |   |   | $      | 761    |   |   | $ | 620 |   |
| Provision for loan losses                  |   |           | 368    |   |   |   | 84     |   |   |   | 145 |   |
| Recoveries on loans previously charged off |   |           | 28     |   |   |   | -      |   |   |   | 1 |   |
| Loans charged off                          |   |           | (111   | )      |   |   | (16    | )      |   |   | (5 | ) |
| Balance, ending                            |   | $              | 1,114  |   |   | $      | 829    |   |   | $ | 761 |   |

|                                                  |   | Commercial Real Estate |   |   | Commercial Non-Real Estate |   |   | Residential Real Estate |   |   | Real Estate Construction |   |   | Home Equity |   |   | Other Consumer |   |   | Total  |   |
|-------------------------------------------------------|--------|------------------------|--------|--------|----------------------------|--------|--------|-------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|----------------|--------|--------|--------|--------|
|                                                  |   | (In Thousands)         |   |
|                                                  |   |                   |   |   |                       |   |   |                    |   |   |                     |   |   |        |   |   |           |   |   |   |   |
| Allowance ending balance                              |   | $                      | 381    |   |                       | $      | 46     |                    |   | $      | 507                      |   |   | $           | 4      |   |           | $      | 122    |   |   | $ | 54 |   |   | $ | 1,114 |   |
| Ending balance: individually evaluated for impairment |   | $                      | 24     |   |                       |   | -      |                    |   |   | -                        |   |   |        | -      |   |           |   | -      |   |   |   | - |   |   | $ | 24 |   |
| Ending balance: collectively evaluated for impairment |   | $                      | 357    |   |                       | $      | 46     |                    |   | $      | 507                      |   |   | $           | 4      |   |           | $      | 122    |   |   | $ | 54 |   |   | $ | 1,090 |   |
|                                                  |   |                   |   |   |                       |   |   |                    |   |   |                     |   |   |        |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                 |   |                   |   |   |                       |   |   |                    |   |   |                     |   |   |        |   |   |           |   |   |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                      | 39,311 |   |                       | $      | 5,192  |                    |   | $      | 54,869                   |   |   | $           | 401    |   |           | $      | 14,982 |   |   | $ | 7,131 |   |   | $ | 121,886 |   |
| Ending balance: individually evaluated for impairment |   | $                      | 5,556  |   |                       | $      | 163    |                    |   |   | -                        |   |   |        | -      |   |           |   | -      |   |   |   | - |   |   | $ | 5,719 |   |
| Ending balance: collectively evaluated for impairment |   | $                      | 33,755 |   |                       | $      | 5,029  |                    |   | $      | 54,869                   |   |   | $           | 401    |   |           | $      | 14,982 |   |   | $ | 7,131 |   |   | $ | 116,167 |   |

|                 |   | Commercial Real Estate |   |   | Commercial Non-Real Estate |   |
|----------------------|--------|------------------------|--------|--------|----------------------------|--------|
|                 |   | (In Thousands)         |   |
|                 |   |                   |   |   |                       |   |
| Pass/Unclassified    |   | $                      | 21,897 |   |                       | $      | 4,358 |   |
| Pass/Watch           |   |                   | 6,650  |   |                       |   | 653 |   |
| OAEM/Special Mention |   |                   | 3,557  |   |                       |   | 18 |   |
| Substandard          |   |                   | 4,779  |   |                       |   | 163 |   |
| Non-Accrual          |   |                   | 2,428  |   |                       |   | - |   |
| Total                |   | $                      | 39,311 |   |                       | $      | 5,192 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|          |   | Residential Real Estate |   |   | Real Estate Construction |   |   | Home Equity |   |   | Other Consumer |   |
|---------------|--------|-------------------------|--------|--------|--------------------------|--------|--------|-------------|--------|--------|----------------|--------|
| Performing    |   | $                       | 54,846 |   |                     | $      | 401    |        |   | $      | 14,899         |   |   | $ | 7,128 |   |
| Nonperforming |   |                    | 23     |   |                     |   | -      |        |   |   | 83             |   |   |   | 3 |   |
| Total         |   | $                       | 54,869 |   |                     | $      | 401    |        |   | $      | 14,982         |   |   | $ | 7,131 |   |

|                               |   | Recorded Investment |   |   | Unpaid Principal Balance |   |   | Related Allowance |   |   | Average Recorded Investment |   |   | Interest Income Recognized |   |
|------------------------------------|--------|---------------------|--------|--------|--------------------------|--------|--------|-------------------|--------|--------|-----------------------------|--------|--------|----------------------------|--------|
|                               |   | (In Thousands)      |   |
|                               |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |
| With no related allowance recorded |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |
| Commercial real estate             |   | $                   | 2,186  |   |                     | $      | 2,186  |              |   | $      | -                           |   |   | $                          | 2,194  |   |   | $ | 108 |   |
| With related allowance recorded    |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate             |   |                | 218    |   |                     |   | 242    |              |   |   | 24                          |   |   |                       | 264    |   |   |   | - |   |
| Total                              |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate             |   | $                   | 2,404  |   |                     | $      | 2,428  |              |   | $      | 24                          |   |   | $                          | 2,458  |   |   | $ | 108 |   |

|                       |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | 90 Daysand OverPast Due |   |   | Total Past Due |   |   | Current |   |   | TotalLoans Receivable |   |    | 90 Daysand OverandAccruing |   |   | Non-Accrual |   |
|----------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|-------------------------|--------|--------|----------------|--------|--------|---------|--------|--------|-----------------------|--------|---------|----------------------------|--------|--------|-------------|--------|
|                       |   | (In Thousands)      |   |
|                       |   |                |   |   |                |   |   |                    |   |   |           |   |   |    |   |   |                  |   |    |                       |   |   |        |   |
| Commercial real estate     |   | $                   | 2,158  |   |                | $      | 637    |                    |   | $      | 1,645          |   |   | $       | 4,440  |   |                  | $      | 34,871  |                       |   | $      | 39,311      |   |   | $ | - |   |   | $ | 2,428 |   |
| Commercial non-real estate |   |                | 179    |   |                |   | 43     |                    |   |   | -              |   |   |    | 222    |   |                  |   | 4,970   |                       |   |   | 5,192       |   |   |   | - |   |   |   | - |   |
| Residential real estate    |   |                | 1,295  |   |                |   | 417    |                    |   |   | 23             |   |   |    | 1,735  |   |                  |   | 53,134  |                       |   |   | 54,869      |   |   |   | - |   |   |   | 23 |   |
| Real estate construction   |   |                | -      |   |                |   | -      |                    |   |   | -              |   |   |    | -      |   |                  |   | 401     |                       |   |   | 401         |   |   |   | - |   |   |   | - |   |
| Home equity                |   |                | 186    |   |                |   | 170    |                    |   |   | 83             |   |   |    | 439    |   |                  |   | 14,543  |                       |   |   | 14,982      |   |   |   | 83 |   |   |   | - |   |
| Other Consumer             |   |                | 146    |   |                |   | 58     |                    |   |   | 3              |   |   |    | 207    |   |                  |   | 6,924   |                       |   |   | 7,131       |   |   |   | 3 |   |   |   | - |   |
| Total                      |   | $                   | 3,964  |   |                | $      | 1,325  |                    |   | $      | 1,754          |   |   | $       | 7,043  |   |                  | $      | 114,843 |                       |   | $      | 121,886     |   |   | $ | 86 |   |   | $ | 2,451 |   |
|                       |   |                |   |   |                |   |   |                    |   |   |           |   |   |    |   |   |                  |   |    |                       |   |   |        |   |   |   |   |   |   |   |   |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                              |   | EstimatedUseful Lives |   | 2010           |   |   | 2009   |   |
|-----------------------------------|--------|-----------------------|--------|----------------|--------|--------|--------|--------|
|                              |   |                  |   | (In Thousands) |   |
|                              |   |                  |   |           |   |   |   |   |
| Premises                          |   | 5-39 years            |   | $              | 2,901  |   |   | $      | 2,857 |   |
| Furniture, fixtures and equipment |   | 5-10 years            |   |           | 2,563  |   |   |   | 2,476 |   |
|                              |   |                  |   |           |   |   |   |   |   |   |
|                              |   |                  |   |           | 5,464  |   |   |   | 5,333 |   |
| Accumulated depreciation          |   |                  |   |           | (3,361 | )      |   |   | (3,125 | ) |
|                              |   |                  |   |           |   |   |   |   |   |   |
|                              |   |                  |   |           | 2,103  |   |   |   | 2,208 |   |
| Land                              |   |                  |   |           | 238    |   |   |   | 238 |   |
|                              |   |                  |   |           |   |   |   |   |   |   |
|                              |   |                  |   | $              | 2,341  |   |   | $      | 2,446 |   |
|                              |   |                  |   |           |   |   |   |   |   |   |

|                                 |   | 2010                 |    |   | 2009   |   |
|--------------------------------------|--------|----------------------|---------|--------|--------|--------|
|                                 |   | (In Thousands)  |    |
| Savings accounts                     |   | $                    | 68,964  |   |   | $      | 60,780 |   |
| NOW accounts                         |   |                 | 6,766   |   |   |   | 7,144 |   |
| Certificates and other time deposits |   |                 | 136,477 |   |   |   | 125,290 |   |
|                                 |   |                 |    |   |   |   |   |   |
|                                 |   | $                    | 212,207 |   |   | $      | 193,214 |   |

| 2011   |   | $      | 57,119  |   |
|--------|--------|--------|---------|--------|
| 2012   |   |   | 30,341  |   |
| 2013   |   |   | 20,446  |   |
| 2014   |   |   | 9,435   |   |
| 2015   |   |   | 19,136  |   |
|   |   | $      | 136,477 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                           |   | 2010                       |   |   | 2009   |   |
|--------------------------------|--------|----------------------------|--------|--------|--------|--------|
|                           |   |  (In Thousands)  |   |
| AMT credit carryforward        |   | $                          | -      |   |   | $      | 22 |   |
| Losses on impaired security    |   |                       | 278    |   |   |   | 321 |   |
| Allowance for loan losses      |   |                       | 328    |   |   |   | 231 |   |
| Accrued benefits               |   |                       | 24     |   |   |   | 27 |   |
|                           |   |                       |   |   |   |   |   |   |
| Total Deferred Tax Assets      |   |                       | 630    |   |   |   | 601 |   |
|                           |   |                       |   |   |   |   |   |   |
| Securities accretion           |   |                       | 64     |   |   |   | 49 |   |
| Unrealized gains on securities |   |                       | 289    |   |   |   | 385 |   |
| Depreciation                   |   |                       | 101    |   |   |   | 94 |   |
|                           |   |                       |   |   |   |   |   |   |
| Total Deferred Tax Liabilities |   |                       | 454    |   |   |   | 528 |   |
|                           |   |                       |   |   |   |   |   |   |
| Net Deferred Tax Asset         |   | $                          | 176    |   |   | $      | 73 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                |   | 2010                         |   |   | 2009             |   |   | 2008   |   |
|-------------------------------------|--------|------------------------------|--------|--------|------------------|--------|--------|--------|--------|
|                                |   | Amount                       |   |   | % ofPretaxIncome |   |   | Amount |   |   | % ofPretaxIncome |   |   | Amount |   |   | % ofPretaxIncome |   |
|                                |   | (Dollars in Thousands)  |   |
| Tax at statutory rate               |   | $                            | 1,496  |   |             |   | 34     | %      |   | $ | 1,395 |   |   |   | 34 | % |   | $ | 1,315 |   |   |   | 34 | % |
| Increase (decrease) resulting from: |   |                         |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt interest income          |   |                         | (586   | )      |             |   | (13    | )      |   |   | (507 | ) |   |   | (12 | ) |   |   | (550 | ) |   |   | (14 | ) |
| TEFRA interest expense disallowance |   |                         | 66     |   |             |   | 1      |   |   |   | 53 |   |   |   | 1 |   |   |   | 64 |   |   |   | 2 |   |
|                                |   |                         |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                |   | $                            | 976    |   |             |   | 22     | %      |   | $ | 941 |   |   |   | 23 | % |   | $ | 829 |   |   |   | 22 | % |

| Balances, January 1, 2010                 |   | $      | 4,971  |   |
|------------------------------------------------|--------|--------|--------|--------|
| Advances                                       |   |   | 215    |   |
| Repayments                                     |   |   | (2,856 | )      |
| Retired officer loan balance (retired in 2010) |   |   | (164   | )      |
| Balances, December 31, 2010               |   | $      | 2,166  |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                       |   | 2010           |   |   | 2009   |   |
|--------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                       |   | (In Thousands) |   |
| Commitments to grant loans                 |   | $              | 2,396  |   |   | $      | 956 |   |
| Unfunded commitments under lines of credit |   |           | 6,722  |   |   |   | 5,128 |   |
| Letters of credit                          |   |           | 642    |   |   |   | 798 |   |
|                                       |   | $              | 9,760  |   |   | $      | 6,882 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                      |   |  Actual                 |   |   | For Capital AdequacyPurposes |   |   | To Be Well CapitalizedUnder Prompt CorrectiveAction Provisions |   |
|-------------------------------------------|--------|------------------------------|--------|--------|------------------------------|--------|--------|----------------------------------------------------------------|--------|
|                                      |   | Amount                       |   |   | Ratio                        |   |   | Amount                                                         |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                      |   | (Dollars in Thousands)  |   |
| As of December 31, 2010:             |   |                         |   |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets):  |   | $                            | 47,332 |   |                         |   | 31.6   | %                                                              |   |   | 311,992 |   |   |   |   ≥8.0 | % |   | $ | 314,991 |   |   |   | 310.0 | % |
| Tier 1 capital (to risk-weighted assets): |   |                         | 46,218 |   |                         |   | 30.8   |                                                           |   |   | 3 5,996 |   |   |   | 34.0 |   |   |   | 3 8,994 |   |   |   | 3 6.0 |   |
| Tier 1 capital (to average assets):       |   |                         | 46,218 |   |                         |   | 16.6   |                                                           |   |   | 311,118 |   |   |   | 34.0 |   |   |   | 3 13,897 |   |   |   | 3 5.0 |   |
|                                      |   |                         |   |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2009:             |   |                         |   |   |                         |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets):  |   | $                            | 45,606 |   |                         |   | 32.7   | %                                                              |   |   | ≥11,174 |   |   |   |    ≥8.0 | % |   | $ | ≥13,968 |   |   |   | ≥10.0 | % |
| Tier 1 capital (to risk-weighted assets): |   |                         | 44,777 |   |                         |   | 32.1   |                                                           |   |   | ≥ 5,587 |   |   |   | ≥4.0 |   |   |   | ≥ 8,381 |   |   |   | ≥ 6.0 |   |
| Tier 1 capital (to average assets):       |   |                         | 44,777 |   |                         |   | 17.5   |                                                           |   |   | ≥10,263 |   |   |   | ≥4.0 |   |   |   | ≥12,829 |   |   |   | ≥ 5.0 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

| Description                                   |   | Total  |   |   | (Level 1)Quoted Prices in ActiveMarkets for IdenticalAssets |   |   | (Level 2)Significant OtherObservable Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|-----------------------------------------------|--------|--------|--------|--------|-------------------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|----------------------------------------|--------|
|                                          |   |   |   |   | (In Thousands)                                              |   |   |                                        |   |   |                                   |   |
| December 31, 2010                             |   |   |   |   |                                                        |   |   |                                        |   |   |                                   |   |
| U. S. Treasury note available for sale        |   | $      | 106    |   |                                                        | $      | 106    |                                        |   |   | -                                      |   |   |   | - |   |
| Mortgage-backed securities available for sale |   | $      | 41,722 |   |                                                        |   | -      |                                        |   | $      | 41,722                                 |   |   |   | - |   |
| December 31, 2009                             |   |   |   |   |                                                        |   |   |                                        |   |   |                                   |   |   |   |   |   |
| U. S. Treasury note available for sale        |   | $      | 104    |   |                                                        | $      | 104    |                                        |   |   | -                                      |   |   |   | - |   |
| Mortgage-backed securities available for sale |   | $      | 34,887 |   |                                                        |   | -      |                                        |   | $      | 34,887                                 |   |   |   | - |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

| Description                                          |   | Total  |   |   | (Level 1)Quoted Prices in ActiveMarkets for IdenticalAssets |   |   | (Level 2)Significant OtherObservable Inputs |   |   | (Level 3)SignificantUnobservableInputs |   |
|------------------------------------------------------|--------|--------|--------|--------|-------------------------------------------------------------|--------|--------|---------------------------------------------|--------|--------|----------------------------------------|--------|
|                                                 |   |   |   |   | (In Thousands)                                              |   |   |                                        |   |   |                                   |   |
| December 31, 2010                                    |   |   |   |   |                                                        |   |   |                                        |   |   |                                   |   |
| Impaired trust preferred securities held to maturity |   | $      | 162    |   |                                                        |   | -      |                                        |   |   | -                                      |   |   | $ | 162 |   |
| Impaired loans                                       |   | $      | 218    |   |                                                        |   | -      |                                        |   |   | -                                      |   |   | $ | 218 |   |
| December 31, 2009                                    |   |   |   |   |                                                        |   |   |                                        |   |   |                                   |   |   |   |   |   |
| Impaired trust preferred security held to maturity   |   | $      | 65     |   |                                                        |   | -      |                                        |   |   | -                                      |   |   | $ | 65 |   |

|                                                                                  |   | Impaired trust preferred security held to maturity(In Thousands) |   |
|---------------------------------------------------------------------------------------|--------|------------------------------------------------------------------|--------|
| Book/fair value of previously impaired held to maturity security at December 31, 2009 |   | $                                                                | 65     |   |
| Book value of currently impaired held to maturity security at December 31, 2009       |   |                                                             | 990    |   |
| Credit related impairment                                                             |   |                                                             | (533   | ) |
| Non-credit related impairment                                                         |   |                                                             | (350   | ) |
| Principal payment on impaired securities                                              |   |                                                             | (10    | ) |
| Book/fair value of impaired securities at December 31, 2010                           |   | $                                                                | 162    |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                               |   | 2010           |    |   | 2009               |   |
|----------------------------------------------------|--------|----------------|---------|--------|--------------------|--------|
|                                               |   | CarryingAmount |    |   | EstimatedFairValue |   |   | CarryingAmount |   |   | EstimatedFairValue |   |
|                                               |   | (In Thousands) |    |
| Financial assets:                                  |   |           |    |   |               |   |   |   |   |   |   |   |
| Cash and short-term investments                    |   | $              | 7,589   |   |               | $      | 7,589 |   |   | $ | 2,288 |   |   | $ | 2,288 |   |
| Federal funds sold                                 |   |           | -       |   |               |   | - |   |   |   | 2,933 |   |   |   | 2,933 |   |
| Securities available for sale                      |   |           | 41,828  |   |               |   | 41,828 |   |   |   | 34,991 |   |   |   | 34,991 |   |
| Securities held to maturity                        |   |           | 101,932 |   |               |   | 98,617 |   |   |   | 100,976 |   |   |   | 97,538 |   |
| Loans, net                                         |   |           | 120,772 |   |               |   | 125,965 |   |   |   | 111,159 |   |   |   | 114,291 |   |
| Accrued interest receivable                        |   |           | 1,832   |   |               |   | 1,832 |   |   |   | 1,611 |   |   |   | 1,611 |   |
|                                               |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                             |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                           |   |           | 230,687 |   |               |   | 235,117 |   |   |   | 211,391 |   |   |   | 214,651 |   |
| Accrued interest payable                           |   |           | 975     |   |               |   | 975 |   |   |   | 1,047 |   |   |   | 1,047 |   |
|                                               |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet financial instruments:           |   |           |    |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to extend credit and letters of credit |   |           | -       |   |               |   | - |   |   |   | - |   |   |   | - |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                                                          |   | Other-Than-Temporary ImpairmentCredit Losses Recorded in Earnings(In Thousands) |   |
|-------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------|--------|
| Beginning Balance January 1, 2010                                             |   | $                                                                               | 659    |   |
| Additions for OTTI not previously recognized                                  |   |                                                                            | 533    |   |
| Total other-than-temporary losses recognized ending balance December 31, 2010 |   | $                                                                               | 1,192  |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|   | ▪ | the few observable transactions and market quotations that are available are not reliable for purposes of determining fair value at December 31, 2010, |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ▪ | an income valuation approach technique (present value technique) that maximizes the use of relevant observable inputs and minimizes the use of unobservable inputs will be equally or more representative of fair value than the market approach valuation technique used at prior measurement dates and |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ▪ | our TRUP CDOs are classified within Level 3 of the fair value hierarchy because we determined that significant adjustments are required to determine fair value at the measurement date. |
|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 1. | There were a number of assumptions used and the results of the modeling were highly dependent upon the assumptions. |
|--------|----|---------------------------------------------------------------------------------------------------------------------|

|   | 2. | Credit and prepayment assumptions were used for each quarter. |
|--------|----|---------------------------------------------------------------|

|   | 3. | Forward interest rates were used to project future principal and interest payments.  This allowed the analysts to model the impact of over- or under-collateralization for each transaction.  (Higher interest rates generally increase the credit stress on under-collateralized transactions by reducing excess interest, which is the difference between the interest received from the underlying collateral and the interest paid on the rated bonds.) |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | Original face value, purchased value, current book value (as of December 31, 2010), purchase date, and purchase price were used to produce the calculations. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 5. | The basic methodology of ASC 325 was to compare the present value of the cash flows from quarter to quarter.  A decline in the present value versus that for the previous quarter was considered to be an “adverse change.” |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 6. | ASC 325 prescribes using a discount rate “equal to the current yield used to accrete the beneficial interest.”  Original discount margin calculated as of the purchase date based on purchase price was used to calculate the discount rate.  The original discount margin is then added to the appropriate forward 3-month LIBOR rate to determine the discount rate.  For fixed/floating securities, the original coupon is used as the discount rate for the remaining fixed-rate portion of the security’s estimated life. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 7. | The discount rate was then used to calculate the present value for the current quarter’s projected cash flows. |
|--------|----|----------------------------------------------------------------------------------------------------------------------|

|   | 8. | The result calculated for the current quarter was then compared to the previous quarter’s book value to determine if the change is “adverse.” |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 9. | The credit component of any impairment should be the difference between book value and the projected present value for the current quarter. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                           |   | December 31,   |   |
|------------------------------------------------|--------|----------------|--------|
|                                           |   | 2010           |   |   | 2009 |   |
|                                           |   | (In Thousands) |   |
| Assets                                         |   |           |   |   |   |   |
| Cash                                           |   | $              | 71     |   |   | $ | 40 |   |
| Investment in subsidiary                       |   |           | 46,356 |   |   |   | 45,333 |   |
| Premises and equipment                         |   |           | 221    |   |   |   | 229 |   |
| Other assets                                   |   |           | 69     |   |   |   | 46 |   |
| Total Assets                                   |   | $              | 46,717 |   |   | $ | 45,648 |   |
| Liability and Stockholders’ Equity       |   |           |   |   |   |   |   |   |
| Liability, accounts payable                    |   | $              | 20     |   |   | $ | 20 |   |
| Stockholders’ equity                     |   |           | 46,697 |   |   |   | 45,628 |   |
| Total Liability and Stockholders’ Equity |   | $              | 46,717 |   |   | $ | 45,648 |   |

|                                                                          |   | Years Ended December 31, |   |
|-------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                          |   |  2010               |   |   |  2009 |   |   |  2008 |   |
|                                                                          |   | (In Thousands)      |   |
| Dividends from subsidiary                                                     |   | $                        | 2,100  |   |   | $ | 2,300 |   |   | $ | 1,107 |   |
| Rental income                                                                 |   |                     | 17     |   |   |   | 17 |   |   |   | 11 |   |
| Expenses                                                                      |   |                     | (193   | ) |   |   | (152 | ) |   |   | (107 | ) |
| Income before Income Taxes and Equity in Undistributed Earnings of Subsidiary |   |                     | 1,924  |   |   |   | 2,165 |   |   |   | 1,011 |   |
| Income tax benefit                                                            |   |                     | 61     |   |   |   | 45 |   |   |   | 33 |   |
|                                                                          |   |                     | 1,985  |   |   |   | 2,210 |   |   |   | 1,044 |   |
| Equity in undistributed earnings of subsidiary                                |   |                     | 1,441  |   |   |   | 951 |   |   |   | 1,993 |   |
| Net Income                                                                    |   | $                        | 3,426  |   |   | $ | 3,161 |   |   | $ | 3,037 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Notes to Consolidated Financial Statements |

|                                                                              |   | Years Ended December 31, |   |
|-----------------------------------------------------------------------------------|--------|--------------------------|--------|
|                                                                              |   | 2010                     |   |   | 2009 |   |   | 2008 |   |
|                                                                              |   | (In Thousands)           |   |
| Cash Flows from Operating Activities                                              |   |                     |   |   |   |   |   |   |   |
| Net income                                                                        |   | $                        | 3,426  |   |   | $ | 3,161 |   |   | $ | 3,037 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Depreciation                                                                      |   |                     | 8      |   |   |   | 12 |   |   |   | 11 |   |
| Equity in undistributed earnings of subsidiary                                    |   |                     | (1,441 | ) |   |   | (951 | ) |   |   | (1,993 | ) |
| (Increase) decrease in other assets                                               |   |                     | (23    | ) |   |   | (13 | ) |   |   | 61 |   |
| Decrease in accounts payable                                                      |   |                     | -      |   |   |   | (1 | ) |   |   | - |   |
| Net Cash Provided by Operating Activities                                         |   |                     | 1,970  |   |   |   | 2,208 |   |   |   | 1,116 |   |
| Cash Flows Used in Investing Activities                                           |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Purchases of premises and equipment                                               |   |                     | -      |   |   |   | - |   |   |   | (8 | ) |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cash Flows Used in Financing Activities                                           |   |                     |   |   |   |   |   |   |   |   |   |   |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Dividends paid                                                                    |   |                     | (863   | ) |   |   | (742 | ) |   |   | (759 | ) |
| Purchase of treasury stock                                                        |   |                     | (1,076 | ) |   |   | (1,434 | ) |   |   | (394 | ) |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net Cash Used in Financing Activities                                             |   |                     | (1,939 | ) |   |   | (2,176 | ) |   |   | (1,153 | ) |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Net Increase (Decrease) in Cash                                                   |   |                     | 31     |   |   |   | 32 |   |   |   | (45 | ) |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cash - Beginning                                                                  |   |                     | 40     |   |   |   | 8 |   |   |   | 53 |   |
|                                                                              |   |                     |   |   |   |   |   |   |   |   |   |   |
| Cash - Ending                                                                     |   | $                        | 71     |   |   | $ | 40 |   |   | $ | 8 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary |
|------------------------------------|
| Selected Financial Data            |

|                                                                                     |   | At or For the Year Ended December 31,         |    |
|------------------------------------------------------------------------------------------|--------|-----------------------------------------------|---------|
|                                                                                     |   | 2010                                          |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                     |   | (Dollars in Thousands, Except Per Share Data) |    |
| Interest Income                                                                          |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Interest and fees on loans                                             |   | $                                             | 7,102   |   |   | $ | 6,777 |   |   | $ | 6,456 |   |   | $ | 5,988 |   |   | $ | 5,419 |   |
|    Interest and dividends on securities                                   |   |                                          | 6,386   |   |   |   | 6,690 |   |   |   | 6,404 |   |   |   | 5,869 |   |   |   | 5,521 |   |
|    Interest on federal funds sold                                         |   |                                          | 5       |   |   |   | 4 |   |   |   | 12 |   |   |   | 78 |   |   |   | 51 |   |
| Total interest income                                                                    |   |                                          | 13,493  |   |   |   | 13,471 |   |   |   | 12,872 |   |   |   | 11,935 |   |   |   | 10,991 |   |
| Interest Expense                                                                         |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Deposits                                                               |   |                                          | 4,878   |   |   |   | 5,472 |   |   |   | 6,099 |   |   |   | 6,085 |   |   |   | 5,115 |   |
|    Short-term borrowings                                                  |   |                                          | -       |   |   |   | 2 |   |   |   | 23 |   |   |   | 4 |   |   |   | 14 |   |
| Total interest expense                                                                   |   |                                          | 4,878   |   |   |   | 5,474 |   |   |   | 6,122 |   |   |   | 6,089 |   |   |   | 5,129 |   |
| Net interest income                                                                      |   |                                          | 8,615   |   |   |   | 7,997 |   |   |   | 6,750 |   |   |   | 5,846 |   |   |   | 5,862 |   |
| Provision for loan losses                                                                |   |                                          | 368     |   |   |   | 84 |   |   |   | 145 |   |   |   | - |   |   |   | - |   |
|                                                                                     |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income after provision for loan losses                                 |   |                                          | 8,247   |   |   |   | 7,913 |   |   |   | 6,605 |   |   |   | 5,846 |   |   |   | 5,862 |   |
| Other operating income (expense)                                                         |   |                                          | (268    | ) |   |   | (390 | ) |   |   | 277 |   |   |   | 271 |   |   |   | 258 |   |
| Other operating expense                                                                  |   |                                          | 3,577   |   |   |   | 3,421 |   |   |   | 3,016 |   |   |   | 2,879 |   |   |   | 2,809 |   |
| Income before taxes                                                                      |   |                                          | 4,402   |   |   |   | 4,102 |   |   |   | 3,866 |   |   |   | 3,238 |   |   |   | 3,311 |   |
| Applicable income taxes                                                                  |   |                                          | 976     |   |   |   | 941 |   |   |   | 829 |   |   |   | 537 |   |   |   | 488 |   |
| Net income                                                                               |   | $                                             | 3,426   |   |   | $ | 3,161 |   |   | $ | 3,037 |   |   | $ | 2,701 |   |   | $ | 2,823 |   |
| Per Share Data                                                                           |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Basic earnings                                                         |   | $                                             | 18.86   |   |   | $ | 16.96 |   |   | $ | 16.00 |   |   | $ | 13.79 |   |   | $ | 14.26 |   |
|    Book value                                                             |   | $                                             | 260.21  |   |   | $ | 248.51 |   |   | $ | 235.29 |   |   | $ | 219.29 |   |   | $ | 208.25 |   |
|    Dividends declared                                                     |   | $                                             | 4.75    |   |   | $ | 4.00 |   |   | $ | 4.00 |   |   | $ | 4.00 |   |   | $ | 4.00 |   |
|    Average shares outstanding                                             |   |                                          | 181,684 |   |   |   | 186,417 |   |   |   | 189,861 |   |   |   | 195,893 |   |   |   | 197,941 |   |
|    Actual shares outstanding                                              |   |                                          | 179,460 |   |   |   | 183,608 |   |   |   | 189,250 |   |   |   | 190,755 |   |   |   | 197,941 |   |
| At End of Period                                                                         |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Total assets                                                           |   | $                                             | 278,463 |   |   | $ | 258,177 |   |   | $ | 238,782 |   |   | $ | 225,797 |   |   | $ | 215,876 |   |
|    Securities                                                             |   |                                          | 143,760 |   |   |   | 135,967 |   |   |   | 129,507 |   |   |   | 122,491 |   |   |   | 120,362 |   |
|    Total loans, gross                                                     |   |                                          | 121,886 |   |   |   | 111,988 |   |   |   | 100,953 |   |   |   | 94,610 |   |   |   | 88,071 |   |
|    Allowance for loan losses                                              |   |                                          | 1,114   |   |   |   | 829 |   |   |   | 761 |   |   |   | 620 |   |   |   | 653 |   |
|    Deposits                                                               |   |                                          | 230,687 |   |   |   | 211,391 |   |   |   | 192,938 |   |   |   | 180,391 |   |   |   | 173,101 |   |
|    Stockholders’ equity                                             |   |                                          | 46,697  |   |   |   | 45,628 |   |   |   | 44,529 |   |   |   | 41,830 |   |   |   | 41,222 |   |
| Key Ratios                                                                               |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Return on average assets                                               |   |                                          | 1.27    | % |   |   | 1.24 | % |   |   | 1.30 | % |   |   | 1.21 | % |   |   | 1.32 | % |
|    Return on average equity                                               |   |                                          | 7.43    | % |   |   | 7.02 | % |   |   | 7.09 | % |   |   | 6.56 | % |   |   | 7.11 | % |
|    Net loans to deposit ratio                                             |   |                                          | 52.35   | % |   |   | 52.58 | % |   |   | 51.93 | % |   |   | 52.10 | % |   |   | 50.50 | % |
|                                                                                     |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Dividend payout ratio (dividends declared divided by net income)       |   |                                          | 25.19   | % |   |   | 23.59 | % |   |   | 25.01 | % |   |   | 29.01 | % |   |   | 28.05 | % |
|                                                                                     |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Equity to asset ratio (average equity divided by average total assets) |   |                                          | 17.04   | % |   |   | 17.71 | % |   |   | 18.32 | % |   |   | 18.41 | % |   |   | 18.61 | % |
|                                                                                     |   |                                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary                   |
|------------------------------------------------------|
| Quarterly Summary of Financial Data (unaudited) |

|                                         |   | 2010                                          |   |
|----------------------------------------------|--------|-----------------------------------------------|--------|
|                                         |   | Three Months Ended                            |   |
|                                         |   | March 31                                      |   |   | June 30 |   |   | September 30 |   |   | December 31 |   |
|                                         |   | (Dollars in Thousands, Except Per Share Data) |   |
| Interest income                              |   | $                                             | 3,263  |   |   | $ | 3,503 |   |   | $ | 3,407 |   |   | $ | 3,320 |   |
| Interest expense                             |   |                                          | 1,244  |   |   |   | 1,241 |   |   |   | 1,215 |   |   |   | 1,178 |   |
|     Net interest income  |   |                                          | 2,019  |   |   |   | 2,262 |   |   |   | 2,192 |   |   |   | 2,142 |   |
|                                         |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                    |   |                                          | 30     |   |   |   | 90 |   |   |   | 154 |   |   |   | 94 |   |
| Other expenses, net of other income          |   |                                          | 913    |   |   |   | 814 |   |   |   | 852 |   |   |   | 1,266 |   |
|    Income before income taxes |   |                                          | 1,076  |   |   |   | 1,358 |   |   |   | 1,186 |   |   |   | 782 |   |
|                                         |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense                           |   |                                          | 253    |   |   |   | 338 |   |   |   | 268 |   |   |   | 117 |   |
|    Net income                 |   | $                                             | 823    |   |   | $ | 1,020 |   |   | $ | 918 |   |   | $ | 665 |   |
|                                         |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share-Basic                     |   | $                                             | 4.49   |   |   | $ | 5.59 |   |   | $ | 5.07 |   |   | $ | 3.71 |   |

|                                         |   | 2009                                          |   |
|----------------------------------------------|--------|-----------------------------------------------|--------|
|                                         |   | Three Months Ended                            |   |
|                                         |   | March 31                                      |   |   | June 30 |   |   | September 30 |   |   | December 31 |   |
|                                         |   | (Dollars in Thousands, Except Per Share Data) |   |
| Interest income                              |   | $                                             | 3,275  |   |   | $ | 3,383 |   |   | $ | 3,395 |   |   | $ | 3,418 |   |
| Interest expense                             |   |                                          | 1,404  |   |   |   | 1,397 |   |   |   | 1,375 |   |   |   | 1,298 |   |
|     Net interest income  |   |                                          | 1,871  |   |   |   | 1,986 |   |   |   | 2,020 |   |   |   | 2,120 |   |
|                                         |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan losses                    |   |                                          | -      |   |   |   | 1 |   |   |   | 60 |   |   |   | 23 |   |
| Other expenses, net of other income          |   |                                          | 759    |   |   |   | 843 |   |   |   | 1,295 |   |   |   | 914 |   |
|    Income before income taxes |   |                                          | 1,112  |   |   |   | 1,142 |   |   |   | 665 |   |   |   | 1,183 |   |
|                                         |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income tax expense                           |   |                                          | 265    |   |   |   | 272 |   |   |   | 111 |   |   |   | 293 |   |
|    Net income                 |   | $                                             | 847    |   |   | $ | 870 |   |   | $ | 554 |   |   | $ | 890 |   |
|                                         |   |                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings per share-Basic                     |   | $                                             | 4.49   |   |   | $ | 4.64 |   |   | $ | 2.98 |   |   | $ | 4.85 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary |
|------------------------------------|
| Common Stock Information           |

|           |   |   |   |   |   |   |   | Cash Dividends |   |
|----------------|--------|--------|--------|--------|--------|--------|--------|----------------|--------|
| 2010           |   | HIGH   |   |   | LOW    |   |   | Per Share      |   |
| First Quarter  |   | $      | 255.00 |   |   | $      | 255.00 |           |   |   | - |   |
|           |   |   |   |   |   |   |   |           |   |   |   |   |
| Second Quarter |   | $      | 265.00 |   |   | $      | 230.00 |           |   | $ | 2.00 |   |
|           |   |   |   |   |   |   |   |           |   |   |   |   |
| Third Quarter  |   | $      | 270.00 |   |   | $      | 265.00 |           |   |   | - |   |
|           |   |   |   |   |   |   |   |           |   |   |   |   |
| Fourth Quarter |   | $      | 266.00 |   |   | $      | 237.25 |           |   | $ | 2.75 |   |
|           |   |   |   |   |   |   |   |           |   |   |   |   |
|           |   |   |   |   |   |   |   |           |   | Cash Dividends |   |
| 2009           |   | HIGH   |   |   | LOW    |   |   | Per Share      |   |
| First Quarter  |   | $      | 265.00 |   |   | $      | 190.00 |           |   |   | - |   |
|           |   |   |   |   |   |   |   |           |   |   |   |   |
| Second Quarter |   | $      | 265.00 |   |   | $      | 228.00 |           |   | $ | 2.00 |   |
|           |   |   |   |   |   |   |   |           |   |   |   |   |
| Third Quarter  |   | $      | 324.00 |   |   | $      | 255.00 |           |   |   | - |   |
|           |   |   |   |   |   |   |   |           |   |   |   |   |
| Fourth Quarter |   | $      | 265.00 |   |   | $      | 249.00 |           |   | $ | 2.00 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

CONDITION AND RESULTS OF OPERATIONS

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                                                                                                          |   | Year Ended December 31, |    |
|-------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                                          |   | 2010                    |    |   | 2009 |   |   | 2008 |   |
|                                                                                                                          |   | Average                 |    |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                                                                                          |   | Balance1                |    |   | Interest |   |   | Rate |   |   | Balance1 |   |   | Interest |   |   | Rate |   |   | Balance1 |   |   | Interest |   |   | Rate |   |
|                                                                                                                          |   | (Dollars in Thousands)  |    |
| Interest earning assets:                                                                                                      |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Loans receivable2                                                                                           |   | $                       | 116,833 |   |   | $ | 7,102 |   |   |   | 6.08 | % |   | $ | 106,346 |   |   | $ | 6,777 |   |   |   | 6.37 | % |   | $ | 97,774 |   |   | $ | 6,456 |   |   |   | 6.60 | % |
|    Investment securities:                                                                                      |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Taxable                                                                                   |   |                    | 87,165  |   |   |   | 4,774 |   |   |   | 5.48 | % |   |   | 102,981 |   |   |   | 5,304 |   |   |   | 5.15 | % |   |   | 92,674 |   |   |   | 4,876 |   |   |   | 5.26 | % |
|       Non-taxable3                                                                              |   |                    | 53,369  |   |   |   | 1,612 |   |   |   | 3.02 | % |   |   | 33,280 |   |   |   | 1,386 |   |   |   | 4.16 | % |   |   | 33,871 |   |   |   | 1,528 |   |   |   | 4.51 | % |
|    Other interest earning assets4                                                                              |   |                    | 2,167   |   |   |   | 5 |   |   |   | 0.23 | % |   |   | 3,627 |   |   |   | 4 |   |   |   | 0.11 | % |   |   | 990 |   |   |   | 12 |   |   |   | 1.21 | % |
|    Total interest earning assets                                                                               |   |                    | 259,534 |   |   |   | 13,493 |   |   |   | 5.20 | % |   |   | 246,234 |   |   |   | 13,471 |   |   |   | 5.47 | % |   |   | 225,309 |   |   |   | 12,872 |   |   |   | 5.71 | % |
| Noninterest earning assets                                                                                                    |   |                    | 11,004  |   |   |   |   |   |   |   |   |   |   |   | 7,268 |   |   |   |   |   |   |   |   |   |   |   | 8,588 |   |   |   |   |   |   |   |   |   |
|    Total assets                                                                                                |   | $                       | 270,538 |   |   |   |   |   |   |   |   |   |   | $ | 253,502 |   |   |   |   |   |   |   |   |   |   | $ | 233,897 |   |   |   |   |   |   |   |   |   |
| Interest bearing liabilities:                                                                                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    NOW                                                                                                         |   | $                       | 7,382   |   |   |   | 25 |   |   |   | 0.34 | % |   | $ | 7,046 |   |   |   | 28 |   |   |   | 0.40 | % |   | $ | 5,932 |   |   |   | 49 |   |   |   | 0.83 | % |
|    Savings                                                                                                     |   |                    | 65,582  |   |   |   | 653 |   |   |   | 1.00 | % |   |   | 55,691 |   |   |   | 723 |   |   |   | 1.30 | % |   |   | 47,649 |   |   |   | 830 |   |   |   | 1.74 | % |
|    Certificates of deposit                                                                                     |   |                    | 132,491 |   |   |   | 4,200 |   |   |   | 3.17 | % |   |   | 125,748 |   |   |   | 4,721 |   |   |   | 3.75 | % |   |   | 118,746 |   |   |   | 5,220 |   |   |   | 4.40 | % |
|    Federal funds purchased5                                                                                    |   |                    | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 2 |   |   |   | 1.25 | % |   |   | 861 |   |   |   | 23 |   |   |   | 2.67 | % |
|    Total interest bearing liabilities                                                                          |   |                    | 205,455 |   |   |   | 4,878 |   |   |   | 2.37 | % |   |   | 188,485 |   |   |   | 5,474 |   |   |   | 2.90 | % |   |   | 173,188 |   |   |   | 6,122 |   |   |   | 3.53 | % |
| Noninterest bearing liabilities:                                                                                              |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Demand deposits                                                                                             |   |                    | 17,695  |   |   |   |   |   |   |   |   |   |   |   | 18,147 |   |   |   |   |   |   |   |   |   |   |   | 16,393 |   |   |   |   |   |   |   |   |   |
|    Other liabilities                                                                                           |   |                    | 1,280   |   |   |   |   |   |   |   |   |   |   |   | 1,831 |   |   |   |   |   |   |   |   |   |   |   | 1,466 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                                                                                    |   |                    | 46,109  |   |   |   |   |   |   |   |   |   |   |   | 45,039 |   |   |   |   |   |   |   |   |   |   |   | 42,850 |   |   |   |   |   |   |   |   |   |
|    Total liabilities and          stockholders’ equity |   | $                       | 270,539 |   |   |   |   |   |   |   |   |   |   | $ | 253,502 |   |   |   |   |   |   |   |   |   |   | $ | 233,897 |   |   |   |   |   |   |   |   |   |
| Net interest income/spread6                                                                                                   |   |                    |    |   |   | $ | 8,615 |   |   |   | 2.83 | % |   |   |   |   |   | $ | 7,997 |   |   |   | 2.57 | % |   |   |   |   |   | $ | 6,750 |   |   |   | 2.18 | % |
| Net interest margin7                                                                                                          |   |                    |    |   |   |   |   |   |   |   | 3.32 | % |   |   |   |   |   |   |   |   |   |   | 3.25 | % |   |   |   |   |   |   |   |   |   |   | 3.00 | % |

----

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                                                   |   | For Year Ended December 31,   |   |
|------------------------------------------------------------------------|--------|-------------------------------|--------|
|                                                                   |   | 2010/2009 Increase/(Decrease) |   |   | 2009/2008 Increase/(Decrease) |   |
|                                                                   |   | Due to Change in              |   |   | Due to Change in |   |
|                                                                   |   | Volume                        |   |   | Rate |   |   | Net |   |   | Volume |   |   | Rate |   |   | Net |   |
|                                                                   |   | (In Thousands)                |   |
| Interest Income:                                                       |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Loans receivable                                     |   | $                             | 637    |   |   | $ | (312 | ) |   | $ | 325 |   |   | $ | 546 |   |   | $ | (225 | ) |   | $ | 321 |   |
|    Securities                                           |   |                          | 194    |   |   |   | (498 | ) |   |   | (304 | ) |   |   | 477 |   |   |   | (191 | ) |   |   | 286 |   |
|    Other interest earning assets                        |   |                          | (3     | ) |   |   | 4 |   |   |   | 1 |   |   |   | 3 |   |   |   | (11 | ) |   |   | (8 | ) |
|    Total interest earning assets                        |   |                          | 828    |   |   |   | (806 | ) |   |   | 22 |   |   |   | 1,026 |   |   |   | (427 | ) |   |   | 599 |   |
| Interest Expense:                                                      |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    NOW                                                  |   |                          | 1      |   |   |   | (4 | ) |   |   | (3 | ) |   |   | 4 |   |   |   | (25 | ) |   |   | (21 | ) |
|    Savings                                              |   |                          | 98     |   |   |   | (169 | ) |   |   | (71 | ) |   |   | 104 |   |   |   | (211 | ) |   |   | (107 | ) |
|    Certificates of Deposit                              |   |                          | 213    |   |   |   | (735 | ) |   |   | (522 | ) |   |   | 263 |   |   |   | (762 | ) |   |   | (499 | ) |
|    Federal funds purchased                              |   |                          | -      |   |   |   | - |   |   |   | - |   |   |   | (24 | ) |   |   | 3 |   |   |   | (21 | ) |
|       Total interest bearing liabilities |   |                          | 312    |   |   |   | (908 | ) |   |   | (596 | ) |   |   | 347 |   |   |   | (995 | ) |   |   | (648 | ) |
|                                                                   |   |                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net change in net interest income                                      |   | $                             | 516    |   |   | $ | 102 |   |   | $ | 618 |   |   | $ | 679 |   |   | $ | 568 |   |   | $ | 1,247 |   |

|   | ● | a continuing review of delinquent, classified and non-accrual loans, large loans and overall portfolio quality, |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | ● | analytical review of loan charge-off experience, delinquency rates and other relevant historical and peer statistical ratios, |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------|

|   | ● | management’s judgment with respect to the nature of the portfolio, concentrations of credit and current and projected economic and business conditions and their impact on the existing portfolio, and |
|--------|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | regular examinations and review of the portfolio by regulatory authorities. |
|--------|---------|-----------------------------------------------------------------------------|

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                                                   |   | Year Ended December 31 |    |
|------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                   |   | 2010                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                   |   | (Dollars in Thousands) |    |
| Average loans outstanding                                              |   | $                      | 116,833 |   |   | $ | 106,346 |   |   | $ | 97,774 |   |   | $ | 92,006 |   |   | $ | 85,565 |   |
|                                                                   |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total gross loans at year end                                          |   | $                      | 121,886 |   |   | $ | 111,988 |   |   | $ | 100,953 |   |   | $ | 94,610 |   |   | $ | 88,071 |   |
|                                                                   |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses at January 1                                 |   | $                      | 829     |   |   | $ | 761 |   |   | $ | 620 |   |   | $ | 653 |   |   | $ | 657 |   |
| Losses charged to allowance                                            |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Commercial real estate                               |   |                   | 23      |   |   |   | - |   |   |   | - |   |   |   | 20 |   |   |   | - |   |
|    Commercial non-real estate                           |   |                   | 15      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Residential real estate                              |   |                   | 40      |   |   |   | - |   |   |   | - |   |   |   | 3 |   |   |   | - |   |
|    Real estate construction                             |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Home equity                                          |   |                   | 6       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Other consumer                                       |   |                   | 27      |   |   |   | 16 |   |   |   | 5 |   |   |   | 15 |   |   |   | 6 |   |
|    Total losses charged to allowance                    |   |                   | 111     |   |   |   | 16 |   |   |   | 5 |   |   |   | 38 |   |   |   | 6 |   |
| Recoveries credited to allowance                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Commercial real estate                               |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Commercial non-real estate                           |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Residential real estate                              |   |                   | 23      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Real estate construction                             |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|    Home equity                                          |   |                   | -       |   |   |   | - |   |   |   | - |   |   |   | 3 |   |   |   | - |   |
|    Other consumer                                       |   |                   | 5       |   |   |   | - |   |   |   | 1 |   |   |   | 2 |   |   |   | 2 |   |
|    Total recoveries credited to allowance               |   |                   | 28      |   |   |   | - |   |   |   | 1 |   |   |   | 5 |   |   |   | 2 |   |
| Net charge-offs                                                        |   |                   | 83      |   |   |   | 16 |   |   |   | 4 |   |   |   | 33 |   |   |   | 4 |   |
| Provision for loan losses                                              |   |                   | 368     |   |   |   | 84 |   |   |   | 145 |   |   |   | - |   |   |   | - |   |
|                                                                   |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses at December 31                               |   | $                      | 1,114   |   |   | $ | 829 |   |   | $ | 761 |   |   | $ | 620 |   |   | $ | 653 |   |
| Ratio of net charge offs to average loans   outstanding |   |                   | 0.07    | % |   |   | 0.02 | % |   |   | 0.00 | % |   |   | 0.04 | % |   |   | 0.00 | % |
| Allowance as a percentage of total   gross loans        |   |                   | 0.91    | % |   |   | 0.74 | % |   |   | 0.75 | % |   |   | 0.66 | % |   |   | 0.74 | % |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                       |   | 2010                   |   |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|----------------------------|--------|------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                       |   |                   |   |   | % of   |   |   |   |   |   | % of   |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |
|                       |   | Amount                 |   |   | Loan   |   |   | Amount |   |   | Loan   |   |   | Amount |   |   | Loan |   |   | Amount |   |   | Loan |   |   | Amount |   |   | Loan |   |
|                       |   | (Dollars in Thousands) |   |
| Commercial real estate     |   | $                      | 381    |   |   |   | 28.7   | %      |   | $      | 270    |   |   |   | 26.0   | % |   | $ | 204 |   |   |   | 25.9 | % |   | $ | 156 |   |   |   | 24.1 | % |   | $ | 134 |   |   |   | 21.4 | % |
| Commercial non-real estate |   |                   | 46     |   |   |   | 3.5    | %      |   |   | 33     |   |   |   | 4.3    | % |   |   | 27 |   |   |   | 3.6 | % |   |   | 23 |   |   |   | 4.9 | % |   |   | 27 |   |   |   | 5.3 | % |
| Residential real estate    |   |                   | 511    |   |   |   | 45.3   | %      |   |   | 432    |   |   |   | 47.1   | % |   |   | 404 |   |   |   | 44.2 | % |   |   | 287 |   |   |   | 42.4 | % |   |   | 281 |   |   |   | 43.3 | % |
| Other consumer             |   |                   | 176    |   |   |   | 22.5   | %      |   |   | 94     |   |   |   | 22.6   | % |   |   | 91 |   |   |   | 26.3 | % |   |   | 131 |   |   |   | 28.6 | % |   |   | 121 |   |   |   | 30.0 | % |
| Unallocated                |   |                   | -      |   |   |   |   |   |   |   | -      |   |   |   |   |   |   |   | 35 |   |   |   |   |   |   |   | 23 |   |   |   |   |   |   |   | 90 |   |   |   |   |   |
| Total                      |   | $                      | 1,114  |   |   |   | 100    | %      |   | $      | 829    |   |   |   | 100    | % |   | $ | 761 |   |   |   | 100 | % |   | $ | 620 |   |   |   | 100 | % |   | $ | 653 |   |   |   | 100 | % |
|                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|   | ● | occupancy and equipment expenses, |
|--------|---------|-----------------------------------|

|   | ● | stationery, printing and Bank supplies, |
|--------|---------|-----------------------------------------|

|   | ● | advertising, |
|--------|---------|--------------|

|   | ● | outside service providers, relating to data processing and ATM services, |
|--------|---------|--------------------------------------------------------------------------|

|   | ● | professional fees for legal, accounting, and consulting services, |
|--------|---------|-------------------------------------------------------------------|

|   | ● | costs associated with the due diligence process of extending and maintaining loans and the collection process, |
|--------|---------|----------------------------------------------------------------------------------------------------------------|

|   | ● | Pennsylvania shares tax and FDIC assessment, and |
|--------|---------|--------------------------------------------------|

|   | ● | other types of expenses incurred as part of the normal course of operation of the Bank. |
|--------|---------|-----------------------------------------------------------------------------------------|

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                                        |   | December 31            |    |
|-------------------------------------------------------------|--------|------------------------|---------|
|                                                        |   | 2010                   |    |   | 2009 |   |   | 2008 |   |
|                                                        |   | (Dollars in Thousands) |    |
| Held to maturity securities:                                |   |                   |    |   |   |   |   |   |   |   |   |   |
|    U.S. Government agencies and corporations |   | $                      | 36,738  |   |   | $ | 59,576 |   |   | $ | 52,871 |   |
|    State and political subdivisions          |   |                   | 61,040  |   |   |   | 36,257 |   |   |   | 32,300 |   |
|    Mortgage-backed securities                |   |                   | 666     |   |   |   | 838 |   |   |   | 1,045 |   |
|    Corporate securities                      |   |                   | 1,350   |   |   |   | 1,350 |   |   |   | 1,500 |   |
|    Collateralized debt obligations           |   |                   | 2,138   |   |   |   | 2,955 |   |   |   | 3,841 |   |
| Available for sale securities:                              |   |                   |    |   |   |   |   |   |   |   |   |   |
|    Mortgage-backed securities                |   |                   | 41,722  |   |   |   | 34,887 |   |   |   | 37,843 |   |
|    U.S. Treasury Note                        |   |                   | 106     |   |   |   | 104 |   |   |   | 107 |   |
|       Total securities        |   | $                      | 143,760 |   |   | $ | 135,967 |   |   | $ | 129,507 |   |

|                                                          |   |                   |   |   |              |   |   | After one but    |   |   | After five but  |   |   |   |   |   |   |   |
|---------------------------------------------------------------|--------|------------------------|--------|--------|-------------------|--------|--------|------------------|--------|--------|-----------------|--------|--------|--------|--------|--------|--------|--------|
|                                                          |   | Within one year        |   |   | within five years |   |   | within ten years |   |   | After ten years |   |
|                                                          |   | Amount                 |   |   | Yield             |   |   | Amount           |   |   | Yield           |   |   | Amount |   |   | Yield  |   |   | Amount |   |   | Yield |   |
|                                                          |   | (Dollars in Thousands) |   |
| Securities Available for Sale:                                |   |                   |   |   |              |   |   |             |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury note                                            |   | $                      | -      |   |              |   | -      |             |   | $      | 106             |   |   |   | 3.14   | %      |   | $      | - |   |   |   | - |   |   | $ | - |   |   |   | - |   |
| Mortgage-backed securities (Government agencies- residential) |   |                   | 888    |   |              |   | 4.00   | %                |   |   | 1,579           |   |   |   | 4.32   | %      |   |   | 5,975 |   |   |   | 4.64 | % |   |   | 33,280 |   |   |   | 4.53 | % |
|                                                          |   |                   | 888    |   |              |   |   |             |   |   | 1,685           |   |   |   |   |   |   |   | 5,975 |   |   |   |   |   |   |   | 33,280 |   |   |   |   |   |
| Securities Held to Maturity:                                  |   |                   |   |   |              |   |   |             |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Obligations of U.S. Government agencies                       |   |                   | -      |   |              |   | -      |             |   |   | 499             |   |   |   | 5.04   | %      |   |   | 999 |   |   |   | 4.51 | % |   |   | 35,240 |   |   |   | 3.04 | % |
| Obligations of states and political subdivisions              |   |                   | 905    |   |              |   | 6.33   | %                |   |   | 5,996           |   |   |   | 6.95   | %      |   |   | 9,920 |   |   |   | 7.11 | % |   |   | 44,219 |   |   |   | 6.17 | % |
| Corporate securities                                          |   |                   | 650    |   |              |   | 6.21   | %                |   |   | 200             |   |   |   | 7.00   | %      |   |   | 500 |   |   |   | 5.10 | % |   |   | - |   |   |   | - |   |
| Collateralized debt obligations                               |   |                   | -      |   |              |   |   |             |   |   | -               |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 2,138 |   |   |   | 2.41 | % |
| Mortgage-backed securities (Government agencies- residential) |   |                   | -      |   |              |   | -      |             |   |   | -               |   |   |   | -      |   |   |   | - |   |   |   | - |   |   |   | 666 |   |   |   | 6.29 | % |
|                                                          |   |                   | 1,555  |   |              |   |   |             |   |   | 6,695           |   |   |   |   |   |   |   | 11,419 |   |   |   |   |   |   |   | 82,263 |   |   |   |   |   |
|                                                          |   | $                      | 2,443  |   |              |   |   |             |   |   | 8,380           |   |   |   |   |   |   |   | 17,394 |   |   |   |   |   |   |   | 115,543 |   |   |   |   |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                      |   | December 31,           |    |
|-------------------------------------------|--------|------------------------|---------|
|                                      |   | (Dollars in Thousands) |    |
|                                      |   | 2010                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                      |   |                   |    |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |
|                                      |   | Amount                 |    |   | Total |   |   | Amount |   |   | Total |   |   | Amount |   |   | Total |   |   | Amount |   |   | Total |   |   | Amount |   |   | Total |   |
|                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                    |   | $                      | 34,931  |   |   |   | 28.7 | % |   | $ | 32,378 |   |   |   | 28.9 | % |   | $ | 26,142 |   |   |   | 25.9 | % |   | $ | 22,779 |   |   |   | 24.1 | % |   | $ | 18,820 |   |   |   | 21.4 | % |
| Commercial non-real estate                |   |                   | 4,329   |   |   |   | 3.5 | % |   |   | 4,810 |   |   |   | 4.3 | % |   |   | 3,627 |   |   |   | 3.6 | % |   |   | 4,635 |   |   |   | 4.9 | % |   |   | 4,664 |   |   |   | 5.3 | % |
| Residential real estate                   |   |                   | 54,806  |   |   |   | 45.0 | % |   |   | 50,587 |   |   |   | 45.2 | % |   |   | 43,799 |   |   |   | 43.4 | % |   |   | 39,221 |   |   |   | 41.5 | % |   |   | 37,088 |   |   |   | 42.1 | % |
| Real estate construction                  |   |                   | 401     |   |   |   | 0.3 | % |   |   | 270 |   |   |   | 0.2 | % |   |   | 873 |   |   |   | 0.9 | % |   |   | 879 |   |   |   | 0.9 | % |   |   | 1,053 |   |   |   | 1.2 | % |
| Home equity                               |   |                   | 19,425  |   |   |   | 15.9 | % |   |   | 16,905 |   |   |   | 15.1 | % |   |   | 19,688 |   |   |   | 19.5 | % |   |   | 20,043 |   |   |   | 21.2 | % |   |   | 19,176 |   |   |   | 21.8 | % |
| Other consumer                            |   |                   | 7,994   |   |   |   | 6.6 | % |   |   | 7,038 |   |   |   | 6.3 | % |   |   | 6,824 |   |   |   | 6.7 | % |   |   | 7,053 |   |   |   | 7.4 | % |   |   | 7,270 |   |   |   | 8.2 | % |
|    Total loans outstanding |   | $                      | 121,886 |   |   |   | 100.0 | % |   | $ | 111,988 |   |   |   | 100.0 | % |   | $ | 100,953 |   |   |   | 100.0 | % |   | $ | 94,610 |   |   |   | 100.0 | % |   | $ | 88,071 |   |   |   | 100.0 | % |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                                    |   | As of December 31, 2010 |   |
|---------------------------------------------------------|--------|-------------------------|--------|
|                                                    |   | Due Under               |   |   | Due 1- 5 |   |   | Due Over |   |   |   |   |
|                                                    |   | One Year                |   |   | Years |   |   | Five Years |   |   | Total |   |
|                                                    |   | (In Thousands)          |   |
| Maturity of loans receivable:                           |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Commercial and commercial real estate |   | $                       | 7,027  |   |   | $ | 26,861 |   |   | $ | 5,372 |   |   | $ | 39,260 |   |
|    Real estate construction              |   |                    | -      |   |   |   | - |   |   |   | 401 |   |   |   | 401 |   |
|       Total               |   | $                       | 7,027  |   |   | $ | 26,861 |   |   | $ | 5,773 |   |   | $ | 39,661 |   |
|                                                    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |                    |   |   |   | Due 1-5 |   |   | Due Over |   |   |   |   |   |
|                                                    |   |                    |   |   |   | Years |   |   | Five Years |   |   |   |   |   |
|    Fixed interest rates                  |   |                    |   |   |   | $ | 2,437 |   |   | $ | 4,098 |   |   |   |   |   |
|    Floating or adjustable interest rates |   |                    |   |   |   |   | 24,424 |   |   |   | 1,675 |   |   |   |   |   |
|       Total               |   |                    |   |   |   | $ | 26,861 |   |   | $ | 5,773 |   |   |   |   |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                                                                                                      |   | December 31,           |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|------------------------|--------|
|                                                                                                                      |   | 2010                   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                      |   | (Dollars in Thousands) |   |
| Non-accruing loans                                                                                                        |   | $                      | 2,451  |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Accruing loans past due 90 days or more                                                                                   |   |                   | 86     |   |   |   | 202 |   |   |   | 173 |   |   |   | 36 |   |   |   | 52 |   |
|    Total nonperforming loans                                                                               |   |                   | 2,537  |   |   |   | 202 |   |   |   | 173 |   |   |   | 36 |   |   |   | 52 |   |
| Foreclosed real estate/repossessed assets                                                                                 |   |                   | 7      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 71 |   |
|    Total nonperforming assets                                                                              |   | $                      | 2,544  |   |   | $ | 202 |   |   | $ | 173 |   |   | $ | 36 |   |   | $ | 123 |   |
| Non-accrual loans:                                                                                                        |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income that would have beenrecorded on non-accrual loans                                                         |   | $                      | 96     |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| Interest income for above loans included in net income for the period                                                     |   | $                      | 109    |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|                                                                                                                      |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                                                                                   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    Nonperforming loans to total loans                                                                      |   |                   | 2.08   | % |   |   | 0.18 | % |   |   | 0.17 | % |   |   | 0.04 | % |   |   | 0.06 | % |
|    Allowance for loan losses to      nonperforming loans                     |   |                   | 43.91  | % |   |   | 410.40 | % |   |   | 439.88 | % |   |   | 1,722.22 | % |   |   | 1,255.77 | % |
|    Nonperforming assets to total assets                                                                    |   |                   | 0.91   | % |   |   | 0.08 | % |   |   | 0.07 | % |   |   | 0.02 | % |   |   | 0.06 | % |
|    Commitments to lend additional funds to      nonperforming loan customers |   | $                      | -      |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

| Non-interest bearing demand deposits |   |   | 1.7  | %  |
|--------------------------------------|--------|--------|------|----|
| Interest-bearing demand deposits     |   |   | (5.3 | %) |
| Savings deposits                     |   |   | 13.5 | %  |
| Time deposits                        |   |   | 8.9  | %  |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

| (In Thousands)                            |   | TimeCertificates |   |
|-------------------------------------------|--------|------------------|--------|
|                                      |   |             |   |
| Three months or less                      |   | $                | 2,761  |   |
| Over three months but within six months   |   |             | 4,259  |   |
| Over six months but within twelve months  |   |             | 6,680  |   |
| Over twelve months                        |   |             | 36,162 |   |
|       Total |   | $                | 49,862 |   |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                                    |   | December 31,           |   |   | December 31, |   |
|---------------------------------------------------------|--------|------------------------|--------|--------|--------------|--------|
|                                                    |   | 2010                   |   |   | 2009         |   |
|                                                    |   | (Dollars in Thousands) |   |
| Tier I, common stockholder equity                       |   | $                      | 46,218 |   |         | $      | 44,777 |   |
| Tier II, allowable portion of allowance for loan losses |   |                   | 1,114  |   |         |   | 829 |   |
|    Total capital                         |   | $                      | 47,332 |   |         | $      | 45,606 |   |
|                                                    |   |                   |   |   |         |   |   |   |
| Tier I risk-based capital ratio                         |   |                   | 30.83  | %      |         |   | 32.06 | % |
| Tier II risk-based capital ratio                        |   |                   | 31.57  | %      |         |   | 32.65 | % |
| Tier I leverage ratio                                   |   |                   | 16.63  | %      |         |   | 17.45 | % |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

----

----

| Neffs Bancorp, Inc. and Subsidiary         |
|--------------------------------------------|
| Management’s Discussion and Analysis |

|                                 |   | Maturity/Repricing Intervals |   |
|--------------------------------------|--------|------------------------------|--------|
|                                 |   | 1-3Months                    |   |   | 3-12Months |   |   | 1-3Years |   |   | 3-5Years |   |   | Over 5Years |   |   | Total |   |
|                                 |   | (In Thousands)               |   |
| Interest bearing deposits with banks |   | $                            | 41     |   |   | $ | 100 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 141 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other securities                     |   |                         | 18,492 |   |   |   | 1,150 |   |   |   | 1,788 |   |   |   | 3,778 |   |   |   | 76,002 |   |   |   | 101,210 |   |
| Mortgage-backed securities           |   |                         | 4,261  |   |   |   | 11,814 |   |   |   | 3,148 |   |   |   | 3,179 |   |   |   | 20,148 |   |   |   | 42,550 |   |
| Total securities                     |   |                         | 22,753 |   |   |   | 12,964 |   |   |   | 4,936 |   |   |   | 6,957 |   |   |   | 96,150 |   |   |   | 143,760 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                          |   |                         | 31,236 |   |   |   | 37,802 |   |   |   | 20,259 |   |   |   | 11,559 |   |   |   | 21,030 |   |   |   | 121,886 |   |
| Total interest earning assets        |   |                         | 54,030 |   |   |   | 50,866 |   |   |   | 25,195 |   |   |   | 18,516 |   |   |   | 117,180 |   |   |   | 265,787 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW Accounts                         |   |                         | 1,489  |   |   |   | - |   |   |   | 5,277 |   |   |   | - |   |   |   | - |   |   |   | 6,766 |   |
| Savings                              |   |                         | 12,414 |   |   |   | - |   |   |   | 56,550 |   |   |   | - |   |   |   | - |   |   |   | 68,964 |   |
| Total savings deposits               |   |                         | 13,903 |   |   |   | - |   |   |   | 61,827 |   |   |   | - |   |   |   | - |   |   |   | 75,730 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| CDs<$100,000                      |   |                         | 12,136 |   |   |   | 31,184 |   |   |   | 25,706 |   |   |   | 17,489 |   |   |   | - |   |   |   | 86,515 |   |
| CDs>$100,000                      |   |                         | 2,761  |   |   |   | 11,038 |   |   |   | 25,081 |   |   |   | 11,082 |   |   |   | - |   |   |   | 49,962 |   |
| Total time deposits                  |   |                         | 14,897 |   |   |   | 42,222 |   |   |   | 50,787 |   |   |   | 28,571 |   |   |   | - |   |   |   | 136,477 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest bearing liabilities   |   |                         | 28,800 |   |   |   | 42,222 |   |   |   | 112,614 |   |   |   | 28,571 |   |   |   | - |   |   |   | 212,207 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Rate sensitive gap                   |   | $                            | 25,230 |   |   | $ | 8,644 |   |   | $ | (87,419 | ) |   | $ | (10,055 | ) |   | $ | 117,180 |   |   | $ | 53,580 |   |
|                                 |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative gap                       |   | $                            | 25,230 |   |   | $ | 33,874 |   |   | $ | (53,545 | ) |   | $ | (63,600 | ) |   | $ | 53,580 |   |   |   | - |   |

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