----

----

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

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

| Embassy Bancorp, Inc.                                  |
|--------------------------------------------------------|
| (Exact name of registrant as specified in its charter) |

| Pennsylvania             | 26-3339011                           |
|--------------------------|--------------------------------------|
| (State of incorporation) | (I.R.S. Employer Identification No.) |

| One Hundred Gateway Drive, Suite 100Bethlehem, PA | 18017      |
|---------------------------------------------------|------------|
| (Address of principal executive offices)          | (Zip Code) |

| None                  | None                                        |
|-----------------------|---------------------------------------------|
| (Title of each class) | (Name of each exchange on which registered) |

----

| Large accelerated filer o | Non-accelerated filer o     |
|---------------------------|-----------------------------|
| Accelerated filer o       | Smaller reporting company x |

| Number of shares outstanding as of March 18, 2011 | ($1 Par Value) | 7,157,004            |
|---------------------------------------------------|----------------|----------------------|
|                                              | (Title Class)  | (Outstanding Shares) |

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| Table of Contents |    |                                                                                                               |   |
|-------------------|---------|--------------------------------------------------------------------------------------------------------------------|--------|
|              |    |                                                                                                               |   | Page |
| Part I            |    | Number                                                                                                             |
|              | Item 1  | Business                                                                                                           |   | 4 |
|              | Item 1A | Risk Factors                                                                                                       |   | 16 |
|              | Item 1B | Unresolved Staff Comments                                                                                          |   | 16 |
|              | Item 2  | Properties                                                                                                         |   | 16 |
|              | Item 3  | Legal Proceedings                                                                                                  |   | 16 |
|              | Item 4  | (Removed and Reserved)                                                                                             |   | 16 |
| Part II           |    |                                                                                                               |
|              |    |                                                                                                               |   |   |
|              | Item 5  | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |   | 17 |
|              | Item 6  | Selected Financial Data                                                                                            |   | 17 |
|              | Item 7  | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        |   | 18 |
|              | Item 7A | Quantitative and Qualitative Disclosures About Market Risk                                                         |   | 32 |
|              | Item 8  | Financial Statements and Supplementary Data                                                                        |   | 32 |
|              |    | Report of Independent Registered Public Accounting Firm                                                            |   | 33 |
|              |    | Consolidated Balance Sheets                                                                                        |   | 34 |
|              |    | Consolidated Statements of Income                                                                                  |   | 35 |
|              |    | Consolidated Statements of Stockholders’ Equity                                                              |   | 36 |
|              |    | Consolidated Statements of Cash Flows                                                                              |   | 37 |
|              |    | Notes to Financial Statements                                                                                      |   | 38 |
|              | Item 9  | Changes In and Disagreements with Accountants on Accounting and Financial Disclosure                               |   | 67 |
|              | Item 9A | Controls and Procedures                                                                                            |   | 67 |
|              | Item 9B | Other Information                                                                                                  |   | 67 |
| Part III          |    |                                                                                                               |
|              |    |                                                                                                               |   |   |
|              | Item 10 | Directors, Executive Officers and Corporate Governance                                                             |   | 68 |
|              | Item 11 | Executive Compensation                                                                                             |   | 68 |
|              | Item 12 | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     |   | 68 |
|              | Item 13 | Certain Relationships and Related Transactions, and Director Independence                                          |   | 68 |
|              | Item 14 | Principal Accountant Fees and Services                                                                             |   | 68 |
| Part IV           |    |                                                                                                               |
|              | Item 15 | Exhibits and Financial Statement Schedules                                                                         |   | 70 |
|              |    |                                                                                                               |   |   |
|              |    | Signatures                                                                                                         |   | 72 |

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. BUSINESS

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| Treasurer Checks                       | Remote Capture               |
|----------------------------------------|------------------------------|
| Certified Checks                       | Safe Deposit Boxes           |
| Gift Cards                             | Night Depository             |
| Wire Transfers                         | Bond Coupon Redemptions      |
| Savings Bonds Sales & Redemptions  | Bank by Mail                 |
| Credit/Debit Card, Merchant Processing | Automated Teller Machine     |
| Direct Deposit/ACH                     | On-Line Banking and Bill Pay |
| Cash Management Services               | Commercial Credit Cards      |
| Escrow Management Services             |                         |

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|   | 1. | Hanover Township, Northampton County |
|--------|----|--------------------------------------|

|   | 2. | South Whitehall Township, Lehigh County |
|--------|----|-----------------------------------------|

|   | 3. | Salisbury Township, Lehigh County |
|--------|----|-----------------------------------|

|   | 4. | Lower Macungie Township, Lehigh County |
|--------|----|----------------------------------------|

|   | 5. | City of Bethlehem, Lehigh County |
|--------|----|----------------------------------|

|   | 6. | Lower Saucon Township, Northampton County |
|--------|----|-------------------------------------------|

|   | 7. | Lower Nazareth Township, Northampton County |
|--------|----|---------------------------------------------|

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|   | · | a reduction in our ability to generate or originate revenue-producing assets as a result of compliance with heightened capital standards; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased cost of operations due to greater regulatory oversight, supervision and examination of banks and bank holding companies, and higher deposit insurance premiums; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the limitation on our ability to raise capital through the use of trust preferred securities as these securities may no longer be included as Tier 1 capital going forward; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the limitation on our ability to expand consumer product and service offerings due to anticipated stricter consumer protection laws and regulations. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Federal Truth-In-Lending Act, which governs disclosures of credit terms to consumer borrowers; |
|--------|--------|------------------------------------------------------------------------------------------------|

|   | · | Home Mortgage Disclosure Act, requiring financial institutions to provide information to enable public officials to determine whether a financial institution is fulfilling its obligations to meet the housing needs of the community it serves; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Equal Credit Opportunity Act prohibiting discrimination on the basis of race, creed or other prohibitive factors in extending credit; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Real Estate Settlement Procedures Act, which requires lenders to disclose certain information regarding the nature and cost of real estate settlements, and prohibits certain lending practices, as well as limits escrow account amounts in real estate transactions; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Fair Credit Reporting Act governing the manner in which consumer debts may be collected by collection agencies; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | Various rules and regulations of various federal agencies charged with the implementation of such federal laws. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Privacy provisions of the Gramm-Leach-Bliley Act and related regulations, which require the Company to maintain privacy policies intended to safeguard customer financial information, to disclose the policies to the Company’s customers and to allow customers to “opt out” of having their financial service providers disclose their confidential financial information to non-affiliated third parties, subject to certain exceptions; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Consumer protection rules for the sale of insurance products by depository institutions, adopted pursuant to the requirements of the Gramm-Leach-Bliley Act; and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | USA Patriot Act, which requires financial institutions to take certain actions to help prevent, detect and prosecute international money laundering and the financing of terrorism. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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 1A

 1B

 PROPERTIES

LEGAL PROCEEDINGS

REMO

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MARKET FOR 

|   | (a) | Market Information. Although shares of the Company's common stock are traded from time to time in private transactions and in the over-the-counter market, there is no established public trading market for the stock. The Company's common stock is not listed on any stock exchange or automated quotation system and there are no present plans to so list the stock. There can be no assurance that, at any given time, any persons will be interested in acquiring shares of the Company's common stock. Price quotations for the Company's common stock do not appear regularly in any generally recognized investment media. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | As of March 25, 2011, there are approximately 1,137 owners of record of the common stock of the Company. |
|--------|-----|----------------------------------------------------------------------------------------------------------|

|   | (c) | On July 15, 2010, the Company paid $141,000 or $0.02 per share in a special cash dividend on its common stock and has not planned for regular payment of cash dividends in the near future. As a general matter, cash available for dividend distribution to shareholders of the Company must initially come from dividends paid to the Company by the Bank. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | The following table sets forth information about options outstanding under the Company’s Stock Option Plan and the Company’s Stock Incentive Plan, as of December 31, 2010: |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                           |   | Number of Shares to be issued upon exercise of out- standing options |    |   | Weighted average exercise price of outstanding options |   |   | Number of Shares remaining available for future issuance |   |
|----------------------------------------------------------------|--------|----------------------------------------------------------------------|---------|--------|--------------------------------------------------------|--------|--------|----------------------------------------------------------|--------|
|                                                           |   |                                                                 |    |   |                                                   |   |   |                                                     |   |
| Equity Compensation Plans and Individual Employment Agreements |   |                                                                 | 239,973 |   |                                                   | $      | 6.30   |                                                     |   |   | 930,752 |   |

|   | (e) | Sales of Securities. |
|--------|-----|----------------------|

|   | (f) | Repurchase of Equity Securities. |
|--------|-----|----------------------------------|

Item 6. Selected Financial 

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 7. MANAGEMENT’S 

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|                                                                |   | Year Ended December 31, 2010 |    |   | Year Ended December 31, 2009 |   |   | Year Ended December 31, 2008 |   |
|---------------------------------------------------------------------|--------|------------------------------|---------|--------|------------------------------|--------|--------|------------------------------|--------|
| (Dollars in Thousands)                                              |   | Average Balance              |    |   | Interest                     |   |   | Tax Equivalent Yield         |   |   | Average Balance |   |   | Interest |   |   | Tax Equivalent Yield |   |   | Average Balance |   |   | Interest |   |   | Tax Equivalent Yield |   |
| ASSETS                                                              |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans - taxable (2)                                                 |   | $                            | 370,372 |   |                         | $      | 20,529 |                         |   |   | 5.54 | % |   | $ | 338,822 |   |   | $ | 19,444 |   |   |   | 5.74 | % |   | $ | 300,162 |   |   | $ | 18,272 |   |   |   | 6.09 | % |
| Loans - non-taxable (1)                                             |   |                         | 585     |   |                         |   | 22     |                         |   |   | 5.70 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| Investment securities - taxable (3)                                 |   |                         | 60,454  |   |                         |   | 2,229  |                         |   |   | 3.69 | % |   |   | 59,044 |   |   |   | 2,590 |   |   |   | 4.39 | % |   |   | 48,763 |   |   |   | 2,346 |   |   |   | 4.81 | % |
| Investment securities - non-taxable (1)(3)                          |   |                         | 24,540  |   |                         |   | 950    |                         |   |   | 5.78 | % |   |   | 11,303 |   |   |   | 452 |   |   |   | 6.03 | % |   |   | - |   |   |   | - |   |   |   | 0.00 | % |
| Federal funds sold                                                  |   |                         | 5,446   |   |                         |   | 8      |                         |   |   | 0.15 | % |   |   | 11,606 |   |   |   | 30 |   |   |   | 0.26 | % |   |   | 1,807 |   |   |   | 29 |   |   |   | 1.60 | % |
| Time deposits                                                       |   |                         | 8,300   |   |                         |   | 137    |                         |   |   | 1.65 | % |   |   | 10,002 |   |   |   | 232 |   |   |   | 2.32 | % |   |   | 311 |   |   |   | 12 |   |   |   | 3.86 | % |
| Interest bearing deposits with banks                                |   |                         | 9,415   |   |                         |   | 18     |                         |   |   | 0.19 | % |   |   | 4,713 |   |   |   | 7 |   |   |   | 0.15 | % |   |   | 502 |   |   |   | 5 |   |   |   | 1.00 | % |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL INTEREST EARNING ASSETS                                       |   |                         | 479,112 |   |                         |   | 23,893 |                         |   |   | 4.99 | % |   |   | 435,490 |   |   |   | 22,755 |   |   |   | 5.23 | % |   |   | 351,545 |   |   |   | 20,664 |   |   |   | 5.88 | % |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less allowance for loan losses                                      |   |                         | (3,828  | )      |                         |   |   |                         |   |   |   |   |   |   | (3,251 | ) |   |   |   |   |   |   |   |   |   |   | (2,706 | ) |   |   |   |   |   |   |   |   |
| Other assets                                                        |   |                         | 24,156  |   |                         |   |   |                         |   |   |   |   |   |   | 12,871 |   |   |   |   |   |   |   |   |   |   |   | 8,921 |   |   |   |   |   |   |   |   |   |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL ASSETS                                                        |   | $                            | 499,440 |   |                         |   |   |                         |   |   |   |   |   | $ | 445,110 |   |   |   |   |   |   |   |   |   |   | $ | 357,760 |   |   |   |   |   |   |   |   |   |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing demand deposits, NOW and money market              |   | $                            | 34,237  |   |                         | $      | 154    |                         |   |   | 0.45 | % |   | $ | 34,229 |   |   | $ | 349 |   |   |   | 1.02 | % |   | $ | 36,299 |   |   | $ | 712 |   |   |   | 1.96 | % |
| Savings                                                             |   |                         | 222,151 |   |                         |   | 2,426  |                         |   |   | 1.09 | % |   |   | 159,544 |   |   |   | 2,721 |   |   |   | 1.71 | % |   |   | 73,833 |   |   |   | 2,229 |   |   |   | 3.02 | % |
| Certificates of deposit                                             |   |                         | 117,074 |   |                         |   | 2,208  |                         |   |   | 1.89 | % |   |   | 144,695 |   |   |   | 4,549 |   |   |   | 3.14 | % |   |   | 152,557 |   |   |   | 6,374 |   |   |   | 4.18 | % |
| Securities sold under agreements to repurchase and other borrowings |   |                         | 54,398  |   |                         |   | 1,158  |                         |   |   | 2.13 | % |   |   | 50,674 |   |   |   | 1,609 |   |   |   | 3.18 | % |   |   | 47,807 |   |   |   | 1,745 |   |   |   | 3.65 | % |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL INTEREST BEARING LIABILITIES                                  |   |                         | 427,860 |   |                         |   | 5,946  |                         |   |   | 1.39 | % |   |   | 389,142 |   |   |   | 9,228 |   |   |   | 2.37 | % |   |   | 310,496 |   |   |   | 11,060 |   |   |   | 3.56 | % |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest bearing demand deposits                                |   |                         | 27,163  |   |                         |   |   |                         |   |   |   |   |   |   | 19,284 |   |   |   |   |   |   |   |   |   |   |   | 15,102 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                   |   |                         | 10,402  |   |                         |   |   |                         |   |   |   |   |   |   | 3,555 |   |   |   |   |   |   |   |   |   |   |   | 3,720 |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                                |   |                         | 34,015  |   |                         |   |   |                         |   |   |   |   |   |   | 33,129 |   |   |   |   |   |   |   |   |   |   |   | 28,442 |   |   |   |   |   |   |   |   |   |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| TOTAL LIABILITIES AND                                               |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                                |   | $                            | 499,440 |   |                         |   |   |                         |   |   |   |   |   | $ | 445,110 |   |   |   |   |   |   |   |   |   |   | $ | 357,760 |   |   |   |   |   |   |   |   |   |
|                                                                |   |                         |    |   |                         |   |   |                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                 |   |                         |    |   |                         | $      | 17,947 |                         |   |   |   |   |   |   |   |   |   | $ | 13,527 |   |   |   |   |   |   |   |   |   |   | $ | 9,604 |   |   |   |   |   |
| Net interest spread                                                 |   |                         |    |   |                         |   |   |                         |   |   | 3.60 | % |   |   |   |   |   |   |   |   |   |   | 2.86 | % |   |   |   |   |   |   |   |   |   |   | 2.32 | % |
| Net interest margin                                                 |   |                         |    |   |                         |   |   |                         |   |   | 3.75 | % |   |   |   |   |   |   |   |   |   |   | 3.11 | % |   |   |   |   |   |   |   |   |   |   | 2.73 | % |

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|                                                                |   | 2010 vs. 2009                          |   |   | 2009 vs. 2008                          |   |
|---------------------------------------------------------------------|--------|----------------------------------------|--------|--------|----------------------------------------|--------|
|                                                                |   | Increase (decrease) due to changes in: |   |   | Increase (decrease) due to changes in: |   |
|                                                                |   |                                   |   |   |                                   |   |   | (In Thousands) |   |   |   |   |   |   |   |
|                                                                |   | Volume                                 |   |   | Rate                                   |   |   | Total |   |   | Volume |   |   | Rate |   |   | Total |   |
| Interest-earning assets:                                            |   |                                   |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans - taxable                                                     |   | $                                      | 1,811  |   |                                   | $      | (726 | ) |   | $ | 1,085 |   |   | $ | 2,353 |   |   | $ | (1,181 | ) |   | $ | 1,172 |   |
| Loans - non-taxable                                                 |   |                                   | -      |   |                                   |   | 22 |   |   |   | 22 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Investment securities - taxable                                     |   |                                   | 62     |   |                                   |   | (423 | ) |   |   | (361 | ) |   |   | 495 |   |   |   | (252 | ) |   |   | 243 |   |
| Investment securities - non-taxable                                 |   |                                   | 560    |   |                                   |   | (62 | ) |   |   | 498 |   |   |   | 452 |   |   |   | - |   |   |   | 452 |   |
| Federal funds sold                                                  |   |                                   | (16    | )      |                                   |   | (6 | ) |   |   | (22 | ) |   |   | 157 |   |   |   | (156 | ) |   |   | 1 |   |
| Time Deposits                                                       |   |                                   | (39    | )      |                                   |   | (56 | ) |   |   | (95 | ) |   |   | 374 |   |   |   | (154 | ) |   |   | 220 |   |
| Interest bearing deposits with banks                                |   |                                   | 7      |   |                                   |   | 4 |   |   |   | 11 |   |   |   | 42 |   |   |   | (39 | ) |   |   | 3 |   |
| Total net change in income on interest-earning assets               |   |                                   | 2,385  |   |                                   |   | (1,247 | ) |   |   | 1,138 |   |   |   | 3,873 |   |   |   | (1,782 | ) |   |   | 2,091 |   |
|                                                                |   |                                   |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                |   |                                   |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                       |   |                                   |   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing demand deposits and money markets                  |   |                                   | -      |   |                                   |   | (195 | ) |   |   | (195 | ) |   |   | (41 | ) |   |   | (322 | ) |   |   | (363 | ) |
| Savings                                                             |   |                                   | 1,068  |   |                                   |   | (1,363 | ) |   |   | (295 | ) |   |   | 2,588 |   |   |   | (2,096 | ) |   |   | 492 |   |
| Certificates of deposit                                             |   |                                   | (868   | )      |                                   |   | (1,473 | ) |   |   | (2,341 | ) |   |   | (328 | ) |   |   | (1,497 | ) |   |   | (1,825 | ) |
| Total deposits                                                      |   |                                   | 200    |   |                                   |   | (3,031 | ) |   |   | (2,831 | ) |   |   | 2,219 |   |   |   | (3,915 | ) |   |   | (1,696 | ) |
| Securities sold under agreements to repurchase and other borrowings |   |                                   | 118    |   |                                   |   | (569 | ) |   |   | (451 | ) |   |   | 105 |   |   |   | (241 | ) |   |   | (136 | ) |
| Total net change in expense on interest-bearing liabilities         |   |                                   | 318    |   |                                   |   | (3,600 | ) |   |   | (3,282 | ) |   |   | 2,324 |   |   |   | (4,156 | ) |   |   | (1,832 | ) |
| Change in net interest income                                       |   | $                                      | 2,067  |   |                                   | $      | 2,353 |   |   | $ | 4,420 |   |   | $ | 1,549 |   |   | $ | 2,374 |   |   | $ | 3,923 |   |

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|                                     |   | 2010           |   |   | 2009   |   |   | 2008   |   |   | 2007   |   |   | 2006   |   |
|------------------------------------------|--------|----------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                     |   | (In Thousands) |   |
| U.S. Treasury and agency obligations     |   | $              | 32,622 |   |   | $      | 17,083 |   |   | $      | 11,697 |   |   | $      | 11,146 |   |   | $ | 10,767 |   |
| Municipal securities                     |   |           | 36,546 |   |   |   | 28,574 |   |   |   | 5,446  |   |   |   | 3,856  |   |   |   | 3,820 |   |
| Mortgage-backed securities - residential |   |           | 16,749 |   |   |   | 23,119 |   |   |   | 37,108 |   |   |   | 34,494 |   |   |   | 28,510 |   |
| Corporate bonds                          |   |           | 3,954  |   |   |   | 4,019  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Securities Available for Sale      |   | $              | 89,871 |   |   | $      | 72,795 |   |   | $      | 54,251 |   |   | $      | 49,496 |   |   | $ | 43,097 |   |

| Securities by Maturities                 |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |
|------------------------------------------|--------|------------------------|--------|--------|--------------------|--------|--------|------------|--------|--------|---------------|--------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------------------|--------|--------|--------|--------|--------|--------------------|--------|
| (Amortized Cost)                         |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |
|                                     |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |
|                                     |   | 1 year or Less         |   |   | 1-5 Years          |   |   | 5-10 Years |   |   | Over 10 Years |   |   | Total  |   |
|                                |   | Amount                 |   |   | Average Yield |   |   | Amount     |   |   | Average Yield |   |   | Amount |   |   | Average Yield |   |   | Amount |   |   | Average Yield |   |   | Amount |   |   | Average Yield |   |
|                                     |   | (Dollars In Thousands) |   |
|                                     |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |
| U.S. Treasury and agency obligations     |   | $                      | -      |   |               |   | -      |       |   | $      | 32,669        |   |   |   | 0.93   | %      |               | $      | -      |   |   |   | -                  |   |   | $      | -      |   |               |   | - |   |   | $ | 32,669 |   |   |   | 0.93 | % |
|                                     |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Municipal securities                     |   |                   | -      |   |               |   | -      |       |   |   | 2,083         |   |   |   | 4.65   | %      |               |   | 3,332  |   |   |   | 4.43               | %      |   |   | 31,597 |   |               |   | 5.92 | % |   |   | 37,012 |   |   |   | 5.71 | % |
|                                     |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed securities - residential |   |                   | 1,329  |   |               |   | 4.47   | %          |   |   | 13,292        |   |   |   | 4.95   | %      |               |   | 1,340  |   |   |   | 3.64               | %      |   |   | -      |   |               |   | - |   |   |   | 15,961 |   |   |   | 4.80 | % |
|                                     |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Corporate bonds                          |   |                   | 1,250  |   |               |   | 6.81   | %          |   |   | 2,530         |   |   |   | 4.97   | %      |               |   | -      |   |   |   | -                  |   |   |   | -      |   |               |   | - |   |   |   | 3,780 |   |   |   | 5.58 | % |
|                                     |   |                   |   |   |               |   |   |       |   |   |          |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Total Debt Securities                    |   | $                      | 2,579  |   |               |   | 5.60   | %          |   | $      | 50,574        |   |   |   | 2.34   | %      |               | $      | 4,672  |   |   |   | 4.20               | %      |   | $      | 31,597 |   |               |   | 5.92 | % |   | $ | 89,422 |   |   |   | 3.79 | % |

----

Table of Contents

|                         |   | December 31, 2010      |    |   | December 31, 2009         |   |   | December 31, 2008 |   |
|-----------------------------------|--------|------------------------|---------|--------|---------------------------|--------|--------|-------------------|--------|
|                              |   | Balance                |    |   | Percentage of total Loans |   |   | Balance           |   |   | Percentage of total Loans |   |   | Balance |   |   | Percentage of total Loans |   |
|                         |   | (Dollars In Thousands) |    |
| Commercial real estate       |   | $                      | 166,780 |   |                      |   | 42.95  | %                 |   | $ | 150,439 |   |   |   | 43.00 | % |   | $ | 148,881 |   |   |   | 46.62 | % |
| Commercial construction      |   |                   | 15,701  |   |                      |   | 4.04   | %                 |   |   | 12,292 |   |   |   | 3.51 | % |   |   | 6,886 |   |   |   | 2.16 | % |
| Commercial                   |   |                   | 27,591  |   |                      |   | 7.11   | %                 |   |   | 25,796 |   |   |   | 7.37 | % |   |   | 24,096 |   |   |   | 7.55 | % |
| Home equity                  |   |                   | 176,141 |   |                      |   | 45.37  | %                 |   |   | 159,180 |   |   |   | 45.50 | % |   |   | 136,739 |   |   |   | 42.82 | % |
| Consumer                     |   |                   | 2,048   |   |                      |   | 0.53   | %                 |   |   | 2,160 |   |   |   | 0.62 | % |   |   | 2,726 |   |   |   | 0.85 | % |
|                         |   |                   |    |   |                      |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross loans                  |   |                   | 388,261 |   |                      |   | 100.00 | %                 |   |   | 349,867 |   |   |   | 100.00 | % |   |   | 319,328 |   |   |   | 100.00 | % |
| Unearned origination (fees) costs |   |                   | (96     | )      |                      |   |   |              |   |   | 51 |   |   |   |   |   |   |   | 252 |   |   |   |   |   |
|                         |   |                   |    |   |                      |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                         |   | $                      | 388,165 |   |                      |   |   |              |   | $ | 349,918 |   |   |   |   |   |   | $ | 319,580 |   |   |   |   |   |
|                         |   |                   |    |   |                      |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                              |   |                   |    |   |                      |   |   |              |   |
|                         |   | December 31, 2007      |    |   | December 31, 2006         |   |   |              |   |
|                              |   | Balance                |    |   | Percentage of total Loans |   |   | Balance           |   |   | Percentage of total Loans |   |   |   |   |   |   |   |   |   |
|                         |   | (Dollars In Thousands) |    |   |                      |   |   |              |   |   |   |
| Commercial real estate       |   | $                      | 125,021 |   |                      |   | 45.21  | %                 |   | $ | 101,737 |   |   |   | 43.21 | % |   |   |   |   |   |   |   |   |
| Commercial construction      |   |                   | 2,969   |   |                      |   | 1.07   | %                 |   |   | 6,183 |   |   |   | 2.63 | % |   |   |   |   |   |   |   |   |
| Commercial                   |   |                   | 22,583  |   |                      |   | 8.17   | %                 |   |   | 21,578 |   |   |   | 9.17 | % |   |   |   |   |   |   |   |   |
| Home equity                  |   |                   | 123,774 |   |                      |   | 44.75  | %                 |   |   | 103,895 |   |   |   | 44.14 | % |   |   |   |   |   |   |   |   |
| Consumer                     |   |                   | 2,216   |   |                      |   | 0.80   | %                 |   |   | 2,006 |   |   |   | 0.85 | % |   |   |   |   |   |   |   |   |
|                         |   |                   |    |   |                      |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gross loans                  |   |                   | 276,563 |   |                      |   | 100.00 | %                 |   |   | 235,399 |   |   |   | 100.00 | % |   |   |   |   |   |   |   |   |
| Unearned origination (fees) costs |   |                   | 253     |   |                      |   |   |              |   |   | 194 |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                         |   |                   |    |   |                      |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                         |   | $                      | 276,816 |   |                      |   |   |              |   | $ | 235,593 |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                    |   | One year or Less |   |   | After One Year Through Five Years |   |    | After Five Years |   |   | Total  |   |
|-------------------------|--------|------------------|--------|--------|-----------------------------------|--------|---------|-----------------------|--------|--------|--------|--------|
|                    |   | (In Thousands)   |   |
| Commercial real estate  |   | $                | 34,359 |   |                              | $      | 103,724 |                  |   | $      | 28,697 |   |   | $ | 166,780 |   |
| Commercial construction |   |             | 13,027 |   |                              |   | 2,138   |                  |   |   | 536    |   |   |   | 15,701 |   |
| Commercial              |   |             | 17,347 |   |                              |   | 9,318   |                  |   |   | 926    |   |   |   | 27,591 |   |
|                    |   |             |   |   |                              |   |    |                  |   |   |   |   |   |   |   |   |
|                    |   | $                | 64,733 |   |                              | $      | 115,180 |                  |   | $      | 30,159 |   |   | $ | 210,072 |   |
|                    |   |             |   |   |                              |   |    |                  |   |   |   |   |   |   |   |   |
| Fixed Rates             |   | $                | 13,587 |   |                              | $      | 107,713 |                  |   | $      | 29,476 |   |   | $ | 150,776 |   |
| Variable Rates          |   |             | 51,146 |   |                              |   | 7,467   |                  |   |   | 683    |   |   |   | 59,296 |   |
|                    |   |             |   |   |                              |   |    |                  |   |   |   |   |   |   |   |   |
|                    |   | $                | 64,733 |   |                              | $      | 115,180 |                  |   | $      | 30,159 |   |   | $ | 210,072 |   |

----

Table of Contents

|                                                           |   | December 31, 2010 |    |   | December 31, 2009 |   |
|----------------------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                                      |   | (In Thousands)    |    |
| Non-accrual - commercial                                       |   | $                 | 1,140   |   |              | $      | 4,152 |   |
| Non-accrual - consumer                                    |   |              | 381     |   |              |   | - |   |
| Restructured                                              |   |              | 3,345   |   |              |   | - |   |
| Loans past due 90 or more days, accruing interest              |   |              | 1,464   |   |              |   | 584 |   |
| Other                                                     |   |              | 2,136   |   |              |   | 60 |   |
| Total nonperforming loans                                      |   |              | 8,466   |   |              |   | 4,796 |   |
| Foreclosed assets                                         |   |              | 3,069   |   |              |   | - |   |
| Total nonperforming assets                                     |   | $                 | 11,535  |   |              | $      | 4,796 |   |
| Nonperforming loans to total loans at period-end               |   |              | 2.18    | %      |              |   | 1.37 | % |
| Nonperforming assets to period end loans and foreclosed assets |   |              | 2.95    | %      |              |   | 1.37 | % |
|                                                      |   |              |    |   |              |   |   |   |
|                                                      |   |              |    |   |              |   |   |   |
| Total Loans                                               |   |              | 388,165 |   |              |   | 349,918 |   |
| Total Foreclosed Assets                                   |   |              | 3,069   |   |              |   | - |   |
| Total Loans plus Foreclosed Assests                            |   | $                 | 391,234 |   |              | $      | 349,918 |   |

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Table of Contents

|                                                         |   | December 31,           |    |
|--------------------------------------------------------------|--------|------------------------|---------|
|                                                         |   | 2010                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                         |   | (Dollars In Thousands) |    |
| Loans receivable at end of year                              |   | $                      | 388,165 |   |   | $ | 349,918 |   |   | $ | 319,580 |   |   | $ | 276,816 |   |   | $ | 235,593 |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses:                                   |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance, beginning                                           |   | $                      | 3,598   |   |   | $ | 2,932 |   |   | $ | 2,503 |   |   | $ | 2,426 |   |   | $ | 1,782 |   |
| Provision for loan losses                                    |   |                   | 1,318   |   |   |   | 702 |   |   |   | 429 |   |   |   | 390 |   |   |   | 644 |   |
| Loans charged off                                            |   |                   | (1,244  | ) |   |   | (36 | ) |   |   | - |   |   |   | (313 | ) |   |   | - |   |
| Recoveries                                                   |   |                   | 37      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Balance at end of year                                       |   | $                      | 3,709   |   |   | $ | 3,598 |   |   | $ | 2,932 |   |   | $ | 2,503 |   |   | $ | 2,426 |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses to loans receivable at end of year |   |                   | 0.96    | % |   |   | 1.03 | % |   |   | 0.92 | % |   |   | 0.90 | % |   |   | 1.03 | % |

|                            |   | December 2010     |   |   | % of Gross Loans |   |   | December 2009 |   |   | % of Gross Loans |   |   | December 2008 |   |   | % of Gross Loans |   |   | December 2007 |   |   | % of Gross Loans |   |   | December 2006 |   |   | % of Gross Loans |   |
|---------------------------------|--------|------------------------|--------|--------|------------------|--------|--------|--------------------|--------|--------|------------------|--------|--------|--------------------|--------|--------|------------------|--------|--------|--------------------|--------|--------|------------------|--------|--------|--------------------|--------|--------|------------------|--------|
|                            |   | (Dollars in Thousands) |   |
| Commercial real estate          |   | $                      | 822    |   |             |   | 38.40  | %                  |   | $      | 1,654            |   |   |               | 38.41  | %      |             | $      | 1,563  |               |   |   | 41.53            | %      |   | $                  | 1,257  |   |             |   | 40.29 | % |   | $ | 1,041 |   |   |   | 38.35 | % |
| Commercial construction         |   |                   | 525    |   |             |   | 4.04   | %                  |   |   | 207              |   |   |               | 3.51   | %      |             |   | 101    |               |   |   | 2.15             | %      |   |               | 47     |   |             |   | 1.07 | % |   |   | 91 |   |   |   | 2.59 | % |
| Commercial                      |   |                   | 740    |   |             |   | 11.66  | %                  |   |   | 679              |   |   |               | 11.96  | %      |             |   | 639    |               |   |   | 12.60            | %      |   |               | 623    |   |             |   | 13.03 | % |   |   | 806 |   |   |   | 14.04 | % |
| Home equity                     |   |                   | 1,577  |   |             |   | 44.87  | %                  |   |   | 1,005            |   |   |               | 45.21  | %      |             |   | 595    |               |   |   | 42.79            | %      |   |               | 530    |   |             |   | 44.33 | % |   |   | 461 |   |   |   | 44.15 | % |
| Consumer                        |   |                   | 45     |   |             |   | 1.03   | %                  |   |   | 53               |   |   |               | 0.91   | %      |             |   | 34     |               |   |   | 0.93             | %      |   |               | 46     |   |             |   | 1.28 | % |   |   | 27 |   |   |   | 0.85 | % |
|                            |   |                   |   |   |             |   |   |               |   |   |             |   |   |               |   |   |             |   |   |               |   |   |             |   |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total Allowance for Loan Losses |   | $                      | 3,709  |   |             |   | 100.00 | %                  |   | $      | 3,598            |   |   |               | 100.00 | %      |             | $      | 2,932  |               |   |   | 100.00           | %      |   | $                  | 2,503  |   |             |   | 100.00 | % |   | $ | 2,426 |   |   |   | 100.00 | % |

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Table of Contents

|                                           |   | December 31, 2010 |    |   | December 31, 2009 |   |    | December 31, 2008 |   |
|------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|---------|-------------------|--------|
|                                           |   | (In Thousands)    |    |
| Demand, non-interest bearing                   |   | $                 | 32,431  |   |              | $      | 25,785  |              |   | $ | 16,194 |   |
| Demand, NOW and money market, interest bearing |   |              | 38,167  |   |              |   | 32,987  |              |   |   | 31,437 |   |
| Savings                                        |   |              | 242,529 |   |              |   | 201,727 |              |   |   | 103,863 |   |
| Time, $100 and over                            |   |              | 41,633  |   |              |   | 54,821  |              |   |   | 65,344 |   |
| Time, other                                    |   |              | 60,507  |   |              |   | 65,964  |              |   |   | 90,732 |   |
|                                           |   |              |    |   |              |   |    |              |   |   |   |   |
| Total deposits                                 |   | $                 | 415,267 |   |              | $      | 381,284 |              |   | $ | 307,570 |   |

|                                 |   | December, 31 2010 |    |   | December, 31 2009 |   |   | December, 31 2008 |   |
|--------------------------------------|--------|------------------------|---------|--------|------------------------|--------|--------|------------------------|--------|
|                                 |   | Average Amount         |    |   | Average Rate           |   |   | Average Amount         |   |   | Average Rate |   |   | Average Amount |   |   | Average Rate |   |
|                                 |   | (Dollars In Thousands) |    |
| Demand, NOW and money market,        |   |                   |    |   |                   |   |   |                   |   |   |   |   |   |   |   |   |   |   |
| interest bearing                     |   | $                      | 34,237  |   |                   |   | 0.45   | %                      |   | $ | 34,229 |   |   |   | 1.02 | % |   | $ | 36,299 |   |   |   | 1.96 | % |
| Savings                              |   |                   | 222,151 |   |                   |   | 1.09   | %                      |   |   | 159,544 |   |   |   | 1.71 | % |   |   | 73,833 |   |   |   | 3.02 | % |
| Certificates of deposit              |   |                   | 117,074 |   |                   |   | 1.89   | %                      |   |   | 144,695 |   |   |   | 3.14 | % |   |   | 152,557 |   |   |   | 4.18 | % |
| Total interest bearing deposits      |   |                   | 373,462 |   |                   |   | 1.28   | %                      |   |   | 338,468 |   |   |   | 2.25 | % |   |   | 262,689 |   |   |   | 3.55 | % |
| Non-interest bearing demand deposits |   |                   | 27,163  |   |                   |   |   |                   |   |   | 19,284 |   |   |   |   |   |   |   | 15,102 |   |   |   |   |   |
| Total                                |   | $                      | 400,625 |   |                   |   |   |                   |   | $ | 357,752 |   |   |   |   |   |   | $ | 277,791 |   |   |   |   |   |

|                     |   | December 31, 2010 |   |
|--------------------------|--------|-------------------|--------|
|                     |   | (In Thousands)    |   |
| 3 months or less         |   | $                 | 14,541 |   |
| Over 3 through 6 months  |   |              | 9,674  |   |
| Over 6 through 12 months |   |              | 8,203  |   |
| Over 12 months           |   |              | 9,215  |   |
|                     |   |              |   |   |
| Total                    |   | $                 | 41,633 |   |

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Table of Contents

|                 |   | 2011           |   |   |   | 2012-2013 |   |   |   | 2014-2015 |   |   | Thereafter |   |   | Total  |   |
|----------------------|--------|----------------|--------|--------|--------|-----------|--------|--------|--------|-----------|--------|--------|------------|--------|--------|--------|--------|
|                 |   | (In Thousands) |   |
| Time deposits        |   | $              | 74,803 |   |   | $         | 21,600 |   |   | $         | 5,737  |   |       | $      | -      |   |   | $ | 102,140 |   |
| Long-term borrowings |   |           | -      |   |   |      | 7,886  |   |   |      | 5,700  |   |       |   | -      |   |   |   | 13,586 |   |
| Operating leases     |   |           | 1,037  |   |   |      | 1,687  |   |   |      | 1,480  |   |       |   | 2,885  |   |   |   | 7,089 |   |
|                 |   |           |   |   |   |      |   |   |   |      |   |   |       |   |   |   |   |   |   |   |
| Total                |   | $              | 75,840 |   |   | $         | 31,173 |   |   | $         | 12,917 |   |       | $      | 2,885  |   |   | $ | 122,815 |   |

----

Table of Contents

|                                                    |   | December 31, 2010      |   |   | December 31, 2009 |   |
|---------------------------------------------------------|--------|------------------------|--------|--------|-------------------|--------|
|                                                    |   | (Dollars In Thousands) |   |
| Tier I, common stockholders' equity                     |   | $                      | 41,712 |   |              | $      | 37,464 |   |
| Tier II, allowable portion of allowance for loan losses |   |                   | 3,709  |   |              |   | 3,598 |   |
|                                                    |   |                   |   |   |              |   |   |   |
| Total capital                                           |   | $                      | 45,421 |   |              | $      | 41,062 |   |
|                                                    |   |                   |   |   |              |   |   |   |
| Tier I risk based capital ratio                         |   |                   | 11.9   | %      |              |   | 11.7 | % |
|                                                    |   |                   |   |   |              |   |   |   |
| Total risk based capital ratio                          |   |                   | 13.0   | %      |              |   | 12.8 | % |
|                                                    |   |                   |   |   |              |   |   |   |
| Tier I leverage ratio                                   |   |                   | 8.1    | %      |              |   | 8.1 | % |

----

Table of Contents

|                                                    |   | December 31, 2010      |   |
|---------------------------------------------------------|--------|------------------------|--------|
|                                                    |   | (Dollars In Thousands) |   |
| Tier I, common stockholders' equity                     |   | $                      | 36,433 |   |
| Tier II, allowable portion of allowance for loan losses |   |                   | 3,709  |   |
|                                                    |   |                   |   |   |
| Total capital                                           |   | $                      | 40,412 |   |
|                                                    |   |                   |   |   |
| Tier I risk based capital ratio                         |   |                   | 10.2   | % |
|                                                    |   |                   |   |   |
| Total risk based capital ratio                          |   |                   | 11.0   | % |
|                                                    |   |                   |   |   |
| Tier I leverage ratio                                   |   |                   | 7.1    | % |

----

Table of Contents

|                                              |   | 0-3 Months |     |   | 4-12 Months |   |     | 1-3 Years |   |   | 4-5 Years |   |   | Over 5 Years |    |   | Total  |   |
|---------------------------------------------------|--------|-----------------|----------|--------|-------------|--------|----------|----------------|--------|--------|----------------|--------|--------|--------------|---------|--------|--------|--------|
|                                              |   | (In Thousands)  |     |
| Interest-earning assets                           |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |
| Federal funds sold and interest-bearing deposits  |   | $               | 14,247   |   |        | $      | 3,543    |           |   | $      | 3,534          |   |   | $            | -       |   |   | $      | - |   |   | $ | 21,324 |   |
| Investment securities                             |   |            | 7,145    |   |        |   | 3,989    |           |   |   | 36,225         |   |   |         | 6,207   |   |   |   | 38,311 |   |   |   | 91,877 |   |
| Loans, gross                                      |   |            | 89,441   |   |        |   | 58,444   |           |   |   | 118,141        |   |   |         | 68,460  |   |   |   | 53,679 |   |   |   | 388,165 |   |
|                                              |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Total interest-earning assets                     |   |            | 110,833  |   |        |   | 65,976   |           |   |   | 157,900        |   |   |         | 74,667  |   |   |   | 91,990 |   |   |   | 501,366 |   |
|                                              |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities                      |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| NOW and money market accounts                     |   |            | 38,167   |   |        |   | -        |           |   |   | -              |   |   |         | -       |   |   |   | - |   |   |   | 38,167 |   |
| Savings                                           |   |            | 242,529  |   |        |   | -        |           |   |   | -              |   |   |         | -       |   |   |   | - |   |   |   | 242,529 |   |
| Certificates of deposit                           |   |            | 28,027   |   |        |   | 46,991   |           |   |   | 21,385         |   |   |         | 5,737   |   |   |   | - |   |   |   | 102,140 |   |
| Other borrowed funds                              |   |            | -        |   |        |   | -        |           |   |   | 13,586         |   |   |         | -       |   |   |   | - |   |   |   | 13,586 |   |
| Repurchase agreements and federal funds purchased |   |            | 45,097   |   |        |   | 1,336    |           |   |   | -              |   |   |         | -       |   |   |   | - |   |   |   | 46,433 |   |
|                                              |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities                |   |            | 353,820  |   |        |   | 48,327   |           |   |   | 34,971         |   |   |         | 5,737   |   |   |   | - |   |   |   | 442,855 |   |
|                                              |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| GAP                                               |   | $               | (242,987 | )      |        | $      | 17,649   |           |   | $      | 122,929        |   |   | $            | 68,930  |   |   | $      | 91,990 |   |   | $ | 58,511 |   |
|                                              |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| CUMULATIVE GAP                                    |   | $               | (242,987 | )      |        | $      | (225,338 | )              |   | $      | (102,409       | )      |   | $            | (33,479 | )      |   | $      | 58,511 |   |   |   |   |   |
|                                              |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| GAP TO INTEREST EARNING                           |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| ASSETS                                            |   |            | -48.46   | %      |        |   | 3.52     | %              |   |   | 24.52          | %      |   |         | 13.75   | %      |   |   | 18.35 | % |   |   |   |   |
|                                              |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| CUMULATIVE GAP TO                                 |   |            |     |   |        |   |     |           |   |   |           |   |   |         |    |   |   |   |   |   |   |   |   |   |
| INTEREST EARNING ASSETS                           |   |            | -48.46   | %      |        |   | -44.94   | %              |   |   | -20.43         | %      |   |         | -6.68   | %      |   |   | 11.67 | % |   |   |   |   |

|  Change in Interest Rates |   | Percentage Change in Net Interest Income |   |
|--------------------------------|--------|------------------------------------------|--------|
|                           |   |                                     |   |
| Down 100 basis points          |   |                                     | -0.3   | % |
| Down 200 basis points          |   |                                     | -3.6   | % |
|                           |   |                                     |   |   |
| Up 100 basis points            |   |                                     | -5.8   | % |
| Up 200 basis points            |   |                                     | -11.1  | % |

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Table of Contents

7A. QUANTITATIVE 

8. FINANCIAL

|                                                    | Page   |
|---------------------------------------------------------|--------|
|                                                    | Number |
|                                                    |   |
| Report of Independent Registered Public Accounting Firm | 33     |
| Consolidated Balance Sheets                             | 34     |
| Consolidated Statements of Income                       | 35     |
| Consolidated Statements of Stockholders’ Equity   | 36     |
| Consolidated Statements of Cash Flows                   | 37     |
| Notes to Financial Statements                           | 38     |

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Table of Contents

Report of Independent Registered 

----

Table of Contents

| Embassy Bancorp, Inc. |
|-----------------------|

Balance Sheets

|                                                                                        |   | December 31,                                    |          |
|---------------------------------------------------------------------------------------------|--------|-------------------------------------------------|---------------|
| ASSETS                                                                                      |   | 2010                                            |          |   | 2009 |   |
|                                                                                        |   | (In Thousands, Except Share and Per Share Data) |          |
| Cash and due from banks                                                                     |   | $                                               | 6,645         |   |   | $ | 4,108 |   |
| Interest bearing demand deposit with banks                                                  |   |                                            | 7,085         |   |   |   | 13,981 |   |
| Federal funds sold                                                                          |   |                                            | 5,913         |   |   |   | 8,375 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Cash and Cash Equivalents                                                                   |   |                                            | 19,643        |   |   |   | 26,464 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Interest bearing time deposits                                                              |   |                                            | 8,326         |   |   |   | 10,724 |   |
| Securities available for sale                                                               |   |                                            | 89,871        |   |   |   | 72,795 |   |
| Restricted investment in bank stock                                                         |   |                                            | 2,006         |   |   |   | 2,109 |   |
| Loans receivable, net of allowance for loan losses   of $3,709 in 2010; $3,598 in 2009 |   |                                            |  384,456 |   |   |   |  346,320 |   |
| Premises and equipment, net of depreciation                                                 |   |                                            | 2,398         |   |   |   | 2,465 |   |
| Deferred income taxes                                                                       |   |                                            | 616           |   |   |   | 199 |   |
| Accrued interest receivable                                                                 |   |                                            | 1,503         |   |   |   | 1,615 |   |
| Other real estate owned                                                                     |   |                                            | 3,069         |   |   |   | - |   |
| Other assets                                                                                |   |                                            | 1,996         |   |   |   | 2,498 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Total Assets                                                                                |   | $                                               | 513,884       |   |   | $ | 465,189 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                        |   |                                            |          |   |   |   |   |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Liabilities:                                                                                |   |                                            |          |   |   |   |   |   |
| Deposits:                                                                                   |   |                                            |          |   |   |   |   |   |
| Non-interest bearing                                                                        |   | $                                               | 32,431        |   |   | $ | 25,785 |   |
| Interest bearing                                                                            |   |                                            | 382,836       |   |   |   | 355,499 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Total Deposits                                                                              |   |                                            | 415,267       |   |   |   | 381,284 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Securities sold under agreements to repurchase   and federal funds purchased           |   |                                            | 46,433        |   |   |   |  30,964 |   |
| Long-term borrowings                                                                        |   |                                            | 13,586        |   |   |   | 17,016 |   |
| Accrued interest payable                                                                    |   |                                            | 941           |   |   |   | 1,457 |   |
| Other liabilities                                                                           |   |                                            | 928           |   |   |   | 791 |   |
| Total Liabilities                                                                           |   |                                            | 477,155       |   |   |   | 431,512 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Stockholders' Equity:                                                                       |   |                                            |          |   |   |   |   |   |
| Common stock, $1 par value; authorized 20,000,000 shares;                                   |   |                                            |          |   |   |   |   |   |
| 2010 issued 7,157,357 shares; outstanding 7,157,004 shares;                                 |   |                                            |          |   |   |   |   |   |
| 2009 issued 6,940,663 shares; outstanding 6,940,310 shares;                                 |   |                                            | 7,157         |   |   |   | 6,941 |   |
| Surplus                                                                                     |   |                                            | 22,303        |   |   |   | 22,900 |   |
| Retained earnings                                                                           |   |                                            | 6,976         |   |   |   | 2,455 |   |
| Accumulated other comprehensive income                                                      |   |                                            | 296           |   |   |   | 1,384 |   |
| Treasury stock, at cost, 353 shares                                                         |   |                                            | (3            | ) |   |   | (3 | ) |
| Total Stockholders' Equity                                                                  |   |                                            | 36,729        |   |   |   | 33,677 |   |
|                                                                                        |   |                                            |          |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                                                  |   | $                                               | 513,884       |   |   | $ | 465,189 |   |

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Table of Contents

| Embassy Bancorp, Inc. |
|-----------------------|

Statements of Income

|                                                                            |   | Years Ended December 31,              |         |
|---------------------------------------------------------------------------------|--------|---------------------------------------|--------------|
|                                                                            |   | 2010                                  |         |   | 2009 |   |
|                                                                            |   | (In Thousands, Except per Share Data) |         |
| INTEREST INCOME                                                                 |   |                                  |         |   |   |   |
|                                                                            |   |                                  |         |   |   |   |
| Loans receivable, including fees                                                |   | $                                     | 20,551       |   |   | $ | 19,444 |   |
| Securities, taxable                                                             |   |                                  | 2,229        |   |   |   | 2,590 |   |
| Securities, non-taxable                                                         |   |                                  | 950          |   |   |   | 452 |   |
| Federal funds sold, and other                                                   |   |                                  | 26           |   |   |   | 37 |   |
| Interest on time deposits                                                       |   |                                  | 137          |   |   |   | 232 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Total Interest Income                                                           |   |                                  | 23,893       |   |   |   | 22,755 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| INTEREST EXPENSE                                                                |   |                                  |         |   |   |   |   |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Deposits                                                                        |   |                                  | 4,788        |   |   |   | 7,619 |   |
| Securities sold under agreements to repurchase and federal funds purchased |   |                                  |  391    |   |   |   |  525 |   |
| Short-term borrowings                                                           |   |                                  | -            |   |   |   | 17 |   |
| Long-term borrowings                                                            |   |                                  | 767          |   |   |   | 1,067 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Total Interest Expense                                                          |   |                                  | 5,946        |   |   |   | 9,228 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Net Interest Income                                                             |   |                                  | 17,947       |   |   |   | 13,527 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                                                       |   |                                  | 1,318        |   |   |   | 702 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Net Interest Income after Provision for Loan Losses                             |   |                                  |  16,629 |   |   |   |  12,825 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| OTHER INCOME                                                                    |   |                                  |         |   |   |   |   |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Credit card processing fees                                                     |   |                                  | 775          |   |   |   | 560 |   |
| Gain on sales of investment securities, net                                     |   |                                  | 661          |   |   |   | 174 |   |
| Other service fees                                                              |   |                                  | 382          |   |   |   | 312 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Total Other Income                                                              |   |                                  | 1,818        |   |   |   | 1,046 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| OTHER EXPENSES                                                                  |   |                                  |         |   |   |   |   |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Salaries and employee benefits                                                  |   |                                  | 5,068        |   |   |   | 4,295 |   |
| Occupancy and equipment                                                         |   |                                  | 2,165        |   |   |   | 1,607 |   |
| Data processing                                                                 |   |                                  | 857          |   |   |   | 711 |   |
| Credit card processing                                                          |   |                                  | 722          |   |   |   | 520 |   |
| Advertising and promotion                                                       |   |                                  | 752          |   |   |   | 512 |   |
| Professional fees                                                               |   |                                  | 370          |   |   |   | 372 |   |
| FDIC insurance                                                                  |   |                                  | 638          |   |   |   | 690 |   |
| Insurance                                                                       |   |                                  | 102          |   |   |   | 83 |   |
| Loan and real estate                                                            |   |                                  | 145          |   |   |   | 132 |   |
| Charitable contributions                                                        |   |                                  | 259          |   |   |   | 239 |   |
| Other                                                                           |   |                                  | 773          |   |   |   | 774 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Total Other Expenses                                                            |   |                                  | 11,851       |   |   |   | 9,935 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Income before Income Taxes                                                      |   |                                  | 6,596        |   |   |   | 3,936 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| INCOME TAX EXPENSE                                                              |   |                                  | 1,934        |   |   |   | 1,203 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| Net Income                                                                      |   | $                                     | 4,662        |   |   | $ | 2,733 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| BASIC EARNINGS PER SHARE                                                        |   | $                                     | 0.67         |   |   | $ | 0.40 |   |
|                                                                            |   |                                  |         |   |   |   |   |   |
| DILUTED EARNINGS PER SHARE                                                      |   | $                                     | 0.65         |   |   | $ | 0.38 |   |

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Table of Contents

| Embassy Bancorp, Inc. |
|-----------------------|

Stockholders’ Equity

|                                                                                      |   | Common Stock                                    |   |   | Surplus |   |   | Retained Earnings |   |   | Accumulated Other Comprehensive Income |   |   | Treasury Stock |   |   | Total  |   |
|-------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|--------|---------|--------|--------|-------------------|--------|--------|----------------------------------------|--------|--------|----------------|--------|--------|--------|--------|
|                                                                                      |   | (In Thousands, Except Share and Per Share Data) |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |
| BALANCE - DECEMBER 31, 2008                                                               |   | $                                               | 6,891  |   |    | $      | 22,787 |              |   | $      | (278                                   | )      |   | $              | 974    |   |   | $      | (3 | ) |   | $ | 30,371 |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income:                                                                     |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                |   |                                            | -      |   |    |   | -      |              |   |   | 2,733                                  |   |   |           | -      |   |   |   | - |   |   |   | 2,733 |   |
| Net change in unrealized gain on securities available for sale, net of income tax effects |   |                                            | -      |   |    |   | -      |              |   |   | -                                      |   |   |           | 410    |   |   |   | - |   |   |   | 410 |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Total Comprehensive Income                                                                |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | 3,143 |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Exercise of stock options, 49,921 shares                                                  |   |                                            | 50     |   |    |   | 113    |              |   |   | -                                      |   |   |           | -      |   |   |   | - |   |   |   | 163 |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| BALANCE - DECEMBER 31, 2009                                                               |   | $                                               | 6,941  |   |    | $      | 22,900 |              |   | $      | 2,455                                  |   |   | $              | 1,384  |   |   | $      | (3 | ) |   | $ | 33,677 |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| BALANCE - DECEMBER 31, 2009                                                               |   | $                                               | 6,941  |   |    | $      | 22,900 |              |   | $      | 2,455                                  |   |   | $              | 1,384  |   |   | $      | (3 | ) |   | $ | 33,677 |   |
| Comprehensive income:                                                                     |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                |   |                                            | -      |   |    |   | -      |              |   |   | 4,662                                  |   |   |           | -      |   |   |   | - |   |   |   | 4,662 |   |
| Net change in unrealized gain on securities available for sale, net of income tax effects |   |                                            | -      |   |    |   | -      |              |   |   | -                                      |   |   |           | (1,088 | )      |   |   | - |   |   |   | (1,088 | ) |
| Total Comprehensive Income                                                                |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | 3,574 |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Dividend paid, $0.02 per share                                                            |   |                                            |   |   |    |   |   |              |   |   | (141                                   | )      |   |           |   |   |   |   |   |   |   |   | (141 | ) |
| Exercise of stock options, 592,921 shares                                                 |   |                                            | 592    |   |    |   | 1,096  |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | 1,688 |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| Stock tendered for funding exercise of stock options and tax expense, 376,227 shares      |   |                                            | (376   | )      |    |   | (1,693 | )                 |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   | (2,069 | ) |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   | -                                      |   |   |           | -      |   |   |   | - |   |   |   |   |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                            |   |   |    |   |   |              |   |   |                                   |   |   |           |   |   |   |   |   |   |   |   |   |   |
| BALANCE - DECEMBER 31, 2010                                                               |   | $                                               | 7,157  |   |    | $      | 22,303 |              |   | $      | 6,976                                  |   |   | $              | 296    |   |   | $      | (3 | ) |   | $ | 36,729 |   |

----

Table of Contents

| Embassy Bancorp, Inc. |
|-----------------------|

Cash Flows

|                                                                                       |   | Years Ended December 31, |    |
|--------------------------------------------------------------------------------------------|--------|--------------------------|---------|
|                                                                                       |   | 2010                     |    |   | 2009 |   |
|                                                                                       |   | (In Thousands)           |    |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                       |   |                     |    |   |   |   |
| Net income                                                                                 |   | $                        | 4,662   |   |   | $ | 2,733 |   |
| Adjustments to reconcile net income to net cash                                            |   |                     |    |   |   |   |   |   |
| provided by (used in) operating activities:                                                |   |                     |    |   |   |   |   |   |
| Provision for loan losses                                                                  |   |                     | 1,318   |   |   |   | 702 |   |
| Amortization of deferred loan fees/costs                                                   |   |                     | 71      |   |   |   | 138 |   |
| Depreciation and amortization                                                              |   |                     | 613     |   |   |   | 475 |   |
| Net amortization of investment security premiums and discounts                             |   |                     | 166     |   |   |   | 55 |   |
| Deferred income taxes                                                                      |   |                     | 144     |   |   |   | (75 | ) |
| Net realized gain on sale of securities available for sale                                 |   |                     | (661    | ) |   |   | (174 | ) |
| Decrease (increase) in accrued interest receivable                                         |   |                     | 112     |   |   |   | (418 | ) |
| Decrease (increase) in other assets                                                        |   |                     | 502     |   |   |   | (1,900 | ) |
| Decrease in accrued interest payable                                                       |   |                     | (516    | ) |   |   | (1,106 | ) |
| Increase (decrease) in other liabilities                                                   |   |                     | 137     |   |   |   | (607 | ) |
|                                                                                       |   |                     |    |   |   |   |   |   |
| Net Cash Provided by (Used in) Operating Activities                                        |   |                     | 6,548   |   |   |   | (177 | ) |
|                                                                                       |   |                     |    |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                       |   |                     |    |   |   |   |   |   |
| Purchases of securities available for sale                                                 |   |                     | (55,802 | ) |   |   | (32,634 | ) |
| Maturities, calls and principal repayments of securities available for sale                |   |                     | 18,657  |   |   |   | 11,582 |   |
| Proceeds from sales of securities available for sale                                       |   |                     | 18,915  |   |   |   | 3,248 |   |
| Net increase in loans                                                                      |   |                     | (42,594 | ) |   |   | (30,512 | ) |
| Decrease (increase) in restricted investment in bank stock                                 |   |                     | 103     |   |   |   | (34 | ) |
| Net maturities (purchases) of interest bearing time deposits                               |   |                     | 2,398   |   |   |   | (9,030 | ) |
| Purchases of premises and equipment                                                        |   |                     | (546    | ) |   |   | (709 | ) |
|                                                                                       |   |                     |    |   |   |   |   |   |
| Net Cash Used in Investing Activities                                                      |   |                     | (58,869 | ) |   |   | (58,089 | ) |
|                                                                                       |   |                     |    |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                       |   |                     |    |   |   |   |   |   |
| Net increase in deposits                                                                   |   |                     | 33,983  |   |   |   | 73,714 |   |
| Net increase in securities sold under agreements to repurchase and federal funds purchased |   |                     | 15,469  |   |   |   | 4,945 |   |
| Proceeds from long-term borrowed funds                                                     |   |                     | 50      |   |   |   | 4,250 |   |
| Payment of long-term borrowed funds                                                        |   |                     | (3,480  | ) |   |   | (10,396 | ) |
| Net payment of stock tendered                                                              |   |                     | (381    | ) |   |   | - |   |
| Proceeds from the exercise of stock options                                                |   |                     | -       |   |   |   | 163 |   |
| Dividends paid                                                                             |   |                     | (141    | ) |   |   | - |   |
|                                                                                       |   |                     |    |   |   |   |   |   |
| Net Cash Provided by Financing Activities                                                  |   |                     | 45,500  |   |   |   | 72,676 |   |
|                                                                                       |   |                     |    |   |   |   |   |   |
| Net Decrease in Cash and Cash Equivalents                                                  |   |                     | (6,821  | ) |   |   | 14,410 |   |
|                                                                                       |   |                     |    |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS - BEGINNING                                                      |   |                     | 26,464  |   |   |   | 12,054 |   |
|                                                                                       |   |                     |    |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS - ENDING                                                         |   | $                        | 19,643  |   |   | $ | 26,464 |   |
|                                                                                       |   |                     |    |   |   |   |   |   |
| SUPPLEMENTARY CASH FLOWS INFORMATION                                                       |   |                     |    |   |   |   |   |   |
| Interest paid                                                                              |   | $                        | 6,462   |   |   | $ | 10,334 |   |
|                                                                                       |   |                     |    |   |   |   |   |   |
| Income taxes paid                                                                          |   | $                        | 1,985   |   |   | $ | 1,533 |   |
|                                                                                       |   |                     |    |   |   |   |   |   |
| Other real estate acquired in settlement of loans                                          |   | $                        | 3,069   |   |   | $ | - |   |

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Significant Accounting Policies

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|                                                      |   | 2010                                          |      |   | 2009   |   |
|-----------------------------------------------------------|--------|-----------------------------------------------|-----------|--------|--------|--------|
|                                                      |   | (Dollars In Thousands, Except Per Share Data) |      |
|                                                      |   |                                          |      |   |   |   |
|  Net income                                          |   | $                                             | 4,662     |   |   | $      | 2,733 |   |
|                                                      |   |                                          |      |   |   |   |   |   |
| Weighted average shares outstanding                       |   |                                          | 7,005,406 |   |   |   | 6,907,047 |   |
| Dilutive effect of potential common shares, stock options |   |                                          | 220,704   |   |   |   | 371,269 |   |
| Diluted weighted average common shares outstanding        |   |                                          | 7,226,109 |   |   |   | 7,278,316 |   |
| Basic earnings per share                                  |   | $                                             | 0.67      |   |   | $      | 0.40 |   |
| Diluted earnings per share                                |   | $                                             | 0.65      |   |   | $      | 0.38 |   |

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|                                                            |   | 2010           |   |   | 2009   |   |
|-----------------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                            |   | (In Thousands) |   |
|                                                            |   |           |   |   |   |   |
| Unrealized holding gain (loss) on available for sale securities |   | $              | (2,310 | )      |   | $      | 447 |   |
| Less: reclassification adjustment for realized gains (losses)   |   |           | 661    |   |   |   | 174 |   |
|                                                            |   |           | (1,649 | )      |   |   | 621 |   |
| Tax effect                                                      |   |           | 561    |   |   |   | (211 | ) |
| Net unrealized gain (loss)                                      |   | $              | (1,088 | )      |   | $      | 410 |   |

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|                                     |   | Amortized Cost |   |   | Gross Unrealized Gains |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
|------------------------------------------|--------|----------------|--------|--------|------------------------|--------|--------|-------------------------|--------|--------|------------|--------|
|                                     |   | (In Thousands) |   |
| December 31, 2010:                       |   |           |   |   |                   |   |   |                    |   |   |       |   |
| U.S. Treasury and agency obligations     |   | $              | 32,669 |   |                   | $      | 120    |                    |   | $      | (167       | )      |   | $ | 32,622 |   |
| Municipal bonds                          |   |           | 37,012 |   |                   |   | 102    |                    |   |   | (568       | )      |   |   | 36,546 |   |
| Mortgage-backed securities - residential |   |           | 15,961 |   |                   |   | 815    |                    |   |   | (27        | )      |   |   | 16,749 |   |
| Corporate bonds                          |   |           | 3,780  |   |                   |   | 174    |                    |   |   | -          |   |   |   | 3,954 |   |
| Total                                    |   | $              | 89,422 |   |                   | $      | 1,211  |                    |   | $      | (762       | )      |   | $ | 89,871 |   |
|                                     |   |           |   |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| December 31, 2009:                       |   |           |   |   |                   |   |   |                    |   |   |       |   |   |   |   |   |
| U.S. Treasury and agency obligations     |   | $              | 16,583 |   |                   | $      | 500    |                    |   | $      | -          |   |   | $ | 17,083 |   |
| Municipal bonds                          |   |           | 28,157 |   |                   |   | 514    |                    |   |   | (97        | )      |   |   | 28,574 |   |
| Mortgage-backed securities - residential |   |           | 22,170 |   |                   |   | 949    |                    |   |   | -          |   |   |   | 23,119 |   |
| Corporate bonds                          |   |           | 3,787  |   |                   |   | 232    |                    |   |   | -          |   |   |   | 4,019 |   |
| Total                                    |   | $              | 70,697 |   |                   | $      | 2,195  |                    |   | $      | (97        | )      |   | $ | 72,795 |   |

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|                                   |   | Amortized Cost |   |   | Fair Value |   |
|----------------------------------------|--------|----------------|--------|--------|------------|--------|
|                                   |   | (In Thousands) |   |
|                                   |   |           |   |   |       |   |
| Due in one year or less                |   | $              | 1,250  |   |       | $      | 1,256 |   |
| Due after one year through five years  |   |           | 37,282 |   |       |   | 37,420 |   |
| Due after five years through ten years |   |           | 3,332  |   |       |   | 3,268 |   |
| Due after ten years                    |   |           | 31,597 |   |       |   | 31,178 |   |
|                                   |   |           | 73,461 |   |       |   | 73,122 |   |
|                                   |   |           |   |   |       |   |   |   |
| Mortgage-backed securities             |   |           | 15,961 |   |       |   | 16,749 |   |
|                                   |   | $              | 89,422 |   |       | $      | 89,871 |   |

|                                     |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total      |   |
|------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                     |   | Fair Value          |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |   | Fair Value |   |   | Unrealized Losses |   |
|                                     |   | (In Thousands)      |   |
| December 31, 2010:                       |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                                     |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Municipal bonds                          |   | $                   | 27,880 |   |              | $      | (568   | )          |   | $ | - |   |   | $ | - |   |   | $ | 27,880 |   |   | $ | (568 | ) |
| Mortgage-backed securities - residential |   |                | 1,584  |   |              |   | (27    | )          |   |   | - |   |   |   | - |   |   |   | 1,584 |   |   |   | (27 | ) |
| U.S. Treasury and agency obligations     |   |                | 27,455 |   |              |   | (167   | )          |   |   | - |   |   |   | - |   |   |   | 27,455 |   |   |   | (167 | ) |
| Total Temporarily Impaired Securities    |   | $                   | 56,919 |   |              | $      | (762   | )          |   | $ | - |   |   | $ | - |   |   | $ | 56,919 |   |   | $ | (762 | ) |
|                                     |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                       |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                     |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Municipal bonds                          |   | $                   | 2,860  |   |              | $      | (97    | )          |   | $ | - |   |   | $ | - |   |   | $ | 2,860 |   |   | $ | (97 | ) |
| Total Temporarily Impaired Securities    |   | $                   | 2,860  |   |              | $      | (97    | )          |   | $ | - |   |   | $ | - |   |   | $ | 2,860 |   |   | $ | (97 | ) |

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|                                       |   | 2010           |    |   | 2009   |   |
|--------------------------------------------|--------|----------------|---------|--------|--------|--------|
|                                       |   | (In Thousands) |    |
|                                       |   |           |    |   |   |   |
| Commercial real estate                     |   | $              | 166,780 |   |   | $      | 150,439 |   |
| Commercial construction                    |   |           | 15,701  |   |   |   | 12,292 |   |
| Commercial                                 |   |           | 27,591  |   |   |   | 25,796 |   |
| Home equity                                |   |           | 176,141 |   |   |   | 159,180 |   |
| Consumer                                   |   |           | 2,048   |   |   |   | 2,160 |   |
|                                       |   |           |    |   |   |   |   |   |
| Total Loans                                |   |           | 388,261 |   |   |   | 349,867 |   |
|                                       |   |           |    |   |   |   |   |   |
| Unearned net loan origination (fees) costs |   |           | (96     | )      |   |   | 51 |   |
| Allowance for Loan Losses                  |   |           | (3,709  | )      |   |   | (3,598 | ) |
|                                       |   |           |    |   |   |   |   |   |
|                                       |   | $              | 384,456 |   |   | $      | 346,320 |   |

|                            |   | December 31,   |    |
|---------------------------------|--------|----------------|---------|
|                            |   | 2010           |    |   | 2009 |   |
|                            |   | (In Thousands) |    |
| Loans receivable at end of year |   | $              | 388,165 |   |   | $ | 349,918 |   |
|                            |   |           |    |   |   |   |   |   |
| Allowance for loan losses:      |   |           |    |   |   |   |   |   |
| Balance, beginning              |   | $              | 3,598   |   |   | $ | 2,932 |   |
| Provision for loan losses       |   |           | 1,318   |   |   |   | 702 |   |
| Loans charged off               |   |           | (1,244  | ) |   |   | (36 | ) |
| Recoveries                      |   |           | 37      |   |   |   | - |   |
| Balance at end of year          |   | $              | 3,709   |   |   | $ | 3,598 |   |

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|                    |   | Pass           |    |   | Special Mention |   |   | Substandard |   |   | Doubtful |   |   | Total  |   |
|-------------------------|--------|----------------|---------|--------|-----------------|--------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|
|                    |   | (In Thousands) |    |
| Commercial real estate  |   | $              | 159,513 |   |            | $      | 601    |        |   | $      | 6,407    |   |   | $      | 259    |   |   | $ | 166,780 |   |
| Commercial construction |   |           | 15,576  |   |            |   | 125    |        |   |   | -        |   |   |   | -      |   |   |   | 15,701 |   |
| Commercial              |   |           | 27,023  |   |            |   | 229    |        |   |   | 339      |   |   |   | -      |   |   |   | 27,591 |   |
| Home equity             |   |           | 175,635 |   |            |   | 125    |        |   |   | -        |   |   |   | 381    |   |   |   | 176,141 |   |
| Consumer                |   |           | 2,048   |   |            |   | -      |        |   |   | -        |   |   |   | -      |   |   |   | 2,048 |   |
| Total                   |   | $              | 379,795 |   |            | $      | 1,080  |        |   | $      | 6,746    |   |   | $      | 640    |   |   | $ | 388,261 |   |

|                                |   | Recorded Investment |   |   | Unpaid Principal Balance |   |   | Related Allowance |   |   | Average Recorded Investment |   |   | Interest Income Recognized |   |
|-------------------------------------|--------|---------------------|--------|--------|--------------------------|--------|--------|-------------------|--------|--------|-----------------------------|--------|--------|----------------------------|--------|
| With no related allowance recorded: |   | (In Thousands)      |   |
| Commercial real estate              |   | $                   | 7,108  |   |                     | $      | 7,108  |              |   | $      | -                           |   |   | $                          | 5,825  |   |   | $ | 84 |   |
| Commercial construction             |   |                | 125    |   |                     |   | 125    |              |   |   | -                           |   |   |                       | 31     |   |   |   | - |   |
| Commercial                          |   |                | 568    |   |                     |   | 568    |              |   |   | -                           |   |   |                       | 479    |   |   |   | 4 |   |
| Home equity                         |   |                | 506    |   |                     |   | 506    |              |   |   | -                           |   |   |                       | 369    |   |   |   | 4 |   |
| Consumer                            |   |                | -      |   |                     |   | -      |              |   |   | -                           |   |   |                       | -      |   |   |   | - |   |
|                                |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| With an allowance recorded:         |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate              |   | $                   | 159    |   |                     | $      | 159    |              |   | $      | 15                          |   |   | $                          | 40     |   |   | $ | 4 |   |
| Commercial construction             |   |                | -      |   |                     |   | -      |              |   |   | -                           |   |   |                       | -      |   |   |   | - |   |
| Commercial                          |   |                | -      |   |                     |   | -      |              |   |   | -                           |   |   |                       | -      |   |   |   | - |   |
| Home equity                         |   |                | -      |   |                     |   | -      |              |   |   | -                           |   |   |                       | -      |   |   |   | - |   |
| Consumer                            |   |                | -      |   |                     |   | -      |              |   |   | -                           |   |   |                       | -      |   |   |   | - |   |
|                                |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Total:                              |   |                |   |   |                     |   |   |              |   |   |                        |   |   |                       |   |   |   |   |   |   |
| Commercial real estate              |   | $                   | 7,267  |   |                     | $      | 7,267  |              |   | $      | 15                          |   |   | $                          | 5,865  |   |   | $ | 88 |   |
| Commercial construction             |   |                | 125    |   |                     |   | 125    |              |   |   | -                           |   |   |                       | 31     |   |   |   | - |   |
| Commercial                          |   |                | 568    |   |                     |   | 568    |              |   |   | -                           |   |   |                       | 479    |   |   |   | 4 |   |
| Home equity                         |   |                | 506    |   |                     |   | 506    |              |   |   | -                           |   |   |                       | 369    |   |   |   | 4 |   |
| Consumer                            |   |                | -      |   |                     |   | -      |              |   |   | -                           |   |   |                       | -      |   |   |   | - |   |
|                                |   | $                   | 8,466  |   |                     | $      | 8,466  |              |   | $      | 15                          |   |   | $                          | 6,744  |   |   | $ | 96 |   |

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|                    |   | 2010           |   |
|-------------------------|--------|----------------|--------|
|                    |   | (In Thousands) |   |
| Commercial real estate  |   | $              | 1,140  |   |
| Commercial construction |   |           | -      |   |
| Commercial              |   |           | -      |   |
| Home equity             |   |           | 381    |   |
| Consumer                |   |           | -      |   |
| Total                   |   | $              | 1,521  |   |

|                                  |   | 30-59 Days Past Due |   |   | 60-89 Days Past Due |   |   | Greater than 90 Days |   |   | Total Past Due |   |   | Current |   |   | Total LoanReceivables |   |    | Loans Receivable > 90 Days and Accruing |   |
|---------------------------------------|--------|---------------------|--------|--------|---------------------|--------|--------|----------------------|--------|--------|----------------|--------|--------|---------|--------|--------|-----------------------|--------|---------|--------------------------------------------|--------|
|                                  |   |                |   |   |                |   |   |                 |   |   |           |   |   |    |   |   |                  |   |    |                                       |   |
| Commercial real estate                |   | $                   | 2,272  |   |                | $      | 579    |                 |   | $      | 2,604          |   |   | $       | 5,455  |   |                  | $      | 161,325 |                                       |   | $ | 166,780 |   |   | $ | 1,464 |   |
| Commercial real estate - construction |   |                | -      |   |                |   | -      |                 |   |   | -              |   |   |    | -      |   |                  |   | 15,701  |                                       |   |   | 15,701 |   |   |   | - |   |
| Commercial                            |   |                | -      |   |                |   | 20     |                 |   |   | -              |   |   |    | 20     |   |                  |   | 27,571  |                                       |   |   | 27,591 |   |   |   | - |   |
| Home equity                           |   |                | -      |   |                |   | 104    |                 |   |   | 381            |   |   |    | 485    |   |                  |   | 175,656 |                                       |   |   | 176,141 |   |   |   | - |   |
| Consumer                              |   |                | -      |   |                |   | -      |                 |   |   | -              |   |   |    | -      |   |                  |   | 2,048   |                                       |   |   | 2,048 |   |   |   | - |   |
| Total                                 |   | $                   | 2,272  |   |                | $      | 703    |                 |   | $      | 2,985          |   |   | $       | 5,960  |   |                  | $      | 382,301 |                                       |   | $ | 388,261 |   |   | $ | 1,464 |   |

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|                    |   | Allowance for Loan Loss |   |   | Loans Receivable                                               |   |
|-------------------------|--------|-------------------------|--------|--------|----------------------------------------------------------------|--------|
|                    |   | Balance                 |   |   | Balance Related to Loans Individually Evaluated for Impairment |   |   | Balance Related to Loans Collectively Evaluated for Impairment |   |   | Balance |   |   | Balance Individually Evaluated for Impairment |   |   | Balance Collectively Evaluated for Impairment |   |
|                    |   |                    |   |   |                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial Real Estate  |   | $                       | 822    |   |                                                           | $      | 15 |   |   | $ | 807 |   |   | $ | 159,513 |   |   | $ | 7,267 |   |   | $ | 152,246 |   |
| Commercial Construction |   |                    | 525    |   |                                                           |   | - |   |   |   | 525 |   |   |   | 15,576 |   |   |   | 125 |   |   |   | 15,451 |   |
| Commercial         |   |                    | 740    |   |                                                           |   | - |   |   |   | 740 |   |   |   | 27,023 |   |   |   | 568 |   |   |   | 26,455 |   |
| Home Equity        |   |                    | 1,577  |   |                                                           |   | - |   |   |   | 1,577 |   |   |   | 175,635 |   |   |   | 506 |   |   |   | 175,129 |   |
| Consumer           |   |                    | 45     |   |                                                           |   | - |   |   |   | 45 |   |   |   | 2,048 |   |   |   | - |   |   |   | 2,048 |   |
|                    |   | $                       | 3,709  |   |                                                           | $      | 15 |   |   | $ | 3,694 |   |   | $ | 379,795 |   |   | $ | 8,466 |   |   | $ | 371,329 |   |

|                                            |   | 2010           |   |   | 2009   |   |
|-------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                            |   | (In Thousands) |   |
| Furniture, fixtures and equipment               |   | $              | 2,086  |   |   | $      | 1,769 |   |
| Leasehold improvements                          |   |           | 1,836  |   |   |   | 1,788 |   |
| Computer equipment and data processing software |   |           | 978    |   |   |   | 841 |   |
| Automobiles                                     |   |           | 124    |   |   |   | 92 |   |
| Construction in progress                        |   |           | 13     |   |   |   | - |   |
|                                            |   |           |   |   |   |   |   |   |
|                                            |   |           | 5,037  |   |   |   | 4,490 |   |
| Accumulated depreciation                        |   |           | (2,639 | )      |   |   | (2,025 | ) |
|                                            |   |           |   |   |   |   |   |   |
|                                            |   | $              | 2,398  |   |   | $      | 2,465 |   |

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|                                           |   | December 31, 2010 |    |   | December 31, 2009 |   |
|------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                           |   | (In Thousands)    |    |
| Demand, non-interest bearing                   |   | $                 | 32,431  |   |              | $      | 25,785 |   |
| Demand, NOW and money market, interest bearing |   |              | 38,167  |   |              |   | 32,987 |   |
| Savings                                        |   |              | 242,529 |   |              |   | 201,727 |   |
| Time, $100 and over                            |   |              | 41,633  |   |              |   | 54,821 |   |
| Time, other                                    |   |              | 60,507  |   |              |   | 65,964 |   |
|                                           |   |              |    |   |              |   |   |   |
| Total deposits                                 |   | $                 | 415,267 |   |              | $      | 381,284 |   |

| 2011   |   | $      | 74,803  |   |
|--------|--------|--------|---------|--------|
| 2012   |   |   | 15,994  |   |
| 2013   |   |   | 5,606   |   |
| 2014   |   |   | 2,540   |   |
| 2015   |   |   | 3,197   |   |
|   |   |   |    |   |
|   |   | $      | 102,140 |   |

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|                                                  |   | 2010                   |   |   | 2009   |   |
|-------------------------------------------------------|--------|------------------------|--------|--------|--------|--------|
|                                                  |   | (Dollars In Thousands) |   |
|                                                  |   |                   |   |   |   |   |
| Balance outstanding at December 31                    |   | $                      | 46,433 |   |   | $      | 30,964 |   |
| Weighted average interest rate at the end of the year |   |                   | 0.40   | %      |   |   | 1.56 |   |
| Average daily balance during the year                 |   | $                      | 40,161 |   |   | $      | 27,866 |   |
| Weighted average interest rate during the year        |   |                   | 0.97   | %      |   |   | 1.89 |   |
| Maximum month-end balance during the year             |   | $                      | 49,182 |   |   | $      | 36,450 |   |

|          |   | 2010          |   |   | 2009        |   |
|---------------|--------|---------------|--------|--------|-------------|--------|
| Maturity Date |   | Interest Rate |   |   | Outstanding |   |   | Interest Rate |   |   | Outstanding |   |
| January 2010  |   |          | -      |   |        | $      | - |   |   |   | 3.50 | % |   | $ | 2,000 |   |
| January 2012  |   |          | -      |   |        |   | - |   |   |   | 3.23 | % |   |   | 1,480 |   |
| June 2013     |   |          | 3.86   | %      |        |   | 4,834 |   |   |   | 3.86 | % |   |   | 4,834 |   |
| August 2013   |   |          | 3.98   | %      |        |   | 3,052 |   |   |   | 3.98 | % |   |   | 3,052 |   |
|          |   |          |   |   |        | $      | 7,886 |   |   |   |   |   |   | $ | 11,366 |   |

|          |   | 2010          |   |   | 2009        |   |
|---------------|--------|---------------|--------|--------|-------------|--------|
| Maturity Date |   | Interest Rate |   |   | Outstanding |   |   | Interest Rate |   |   | Outstanding |   |
| November 2015 |   |          | 7.50   | %      |        | $      | 5,700 |   |   |   | 7.50 | % |   | $ | 5,650 |   |

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|       |   | Related Parties |   |   | Third Parties |   |   | Total  |   |
|------------|--------|-----------------|--------|--------|---------------|--------|--------|--------|--------|
| 2011       |   | $               | 325    |   |          | $      | 712    |   |   | $ | 1,037 |   |
| 2012       |   |            | 168    |   |          |   | 730    |   |   |   | 898 |   |
| 2013       |   |            | 45     |   |          |   | 744    |   |   |   | 789 |   |
| 2014       |   |            | 45     |   |          |   | 706    |   |   |   | 751 |   |
| 2015       |   |            | 45     |   |          |   | 684    |   |   |   | 729 |   |
| Thereafter |   |            | 30     |   |          |   | 2,855  |   |   |   | 2,885 |   |
|       |   |            |   |   |          |   |   |   |   |   |   |   |
|       |   | $               | 658    |   |          | $      | 6,431  |   |   | $ | 7,089 |   |

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|                           |   | Number of Options |     |   | Weighted Average Exercise Price |   |
|--------------------------------|--------|-------------------|----------|--------|---------------------------------|--------|
|                           |   |              |     |   |                            |   |
| Outstanding, December 31, 2008 |   |              | 909,674  |   |                            | $      | 3.79 |   |
| Granted                        |   |              | -        |   |                            |   | - |   |
| Exercised                      |   |              | (49,921  | )      |                            |   | 3.26 |   |
| Forfeited                      |   |              | (600     | )      |                            |   | 10.00 |   |
|                           |   |              |     |   |                            |   |   |   |
| Outstanding, December 31, 2009 |   |              | 859,153  |   |                            | $      | 3.82 |   |
| Granted                        |   |              | -        |   |                            |   | - |   |
| Exercised                      |   |              | (592,920 | )      |                            |   | 2.85 |   |
| Forfeited                      |   |              | (26,260  | )      |                            |   | 3.09 |   |
|                           |   |              |     |   |                            |   |   |   |
| Outstanding, December 31, 2010 |   |              | 239,973  |   |                            | $      | 6.30 |   |
|                           |   |              |     |   |                            |   |   |   |
| Exercisable, December 31, 2010 |   |              | 239,973  |   |                            | $      | 6.30 |   |

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| Range of Exercise Price |           |   | Weighted Average Exercise Price |   |   | Number Outstanding |   |   | Weighted Average Remaining Contractual Life (Years) |   |   | Number Exercisable |   |
|-------------------------|----------------|--------|---------------------------------|--------|--------|--------------------|--------|--------|-----------------------------------------------------|--------|--------|--------------------|--------|
|                    |           |   |                            |   |   |               |   |   |                                                |   |   |               |   |
| $                       | 2.00 to $3.00  |   |                            | $      | 2.84   |               |   |   | 17,929                                              |   |   |               | 0.38   |   |   |   | 17,929 |   |
| $                       | 3.00 to $4.00  |   |                            |   | 3.91   |               |   |   | 89,138                                              |   |   |               | 1.51   |   |   |   | 89,138 |   |
| $                       | 6.00 to $7.00  |   |                            |   | 6.40   |               |   |   | 60,167                                              |   |   |               | 3.00   |   |   |   | 60,167 |   |
| $                       | 9.00 to $10.00 |   |                            |   | 10.00  |               |   |   | 72,739                                              |   |   |               | 4.00   |   |   |   | 72,739 |   |
|                    |           |   |                            |   |   |               |   |   |                                                |   |   |               |   |   |   |   |   |   |
|                    |           |   |                            |   |   |               |   |   | 239,973                                             |   |   |               | 2.55   |   |   |   | 239,973 |   |

|     |   | 2010           |   |   | 2009   |   |
|----------|--------|----------------|--------|--------|--------|--------|
|     |   | (In Thousands) |   |
|     |   |           |   |   |   |   |
| Current  |   | $              | 2,200  |   |   | $      | 1,128 |   |
| Deferred |   |           | (266   | )      |   |   | 75 |   |
|     |   |           |   |   |   |   |   |   |
|     |   | $              | 1,934  |   |   | $      | 1,203 |   |

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|                                 |   | 2010           |   |   | 2009   |   |
|--------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                 |   | (In Thousands) |   |
|                                 |   |           |   |   |   |   |
| Federal income tax at statutory rate |   | $              | 2,243  |   |   | $      | 1,338 |   |
| Tax free interest                    |   |           | (302   | )      |   |   | (164 | ) |
| Other                                |   |           | (7     | )      |   |   | 29 |   |
|                                 |   |           |   |   |   |   |   |   |
|                                 |   | $              | 1,934  |   |   | $      | 1,203 |   |

|                                             |   | 2010           |   |   | 2009   |   |
|--------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                             |   | (In Thousands) |   |
| Deferred tax assets:                             |   |           |   |   |   |   |
| Allowance for loan losses                        |   | $              | 1,141  |   |   | $      | 1,179 |   |
| Contributions carryforward                       |   |           | 214    |   |   |   | 237 |   |
| Other                                            |   |           | 336    |   |   |   | 199 |   |
|                                             |   |           |   |   |   |   |   |   |
| Total Deferred Tax Assets                        |   |           | 1,691  |   |   |   | 1,615 |   |
|                                             |   |           |   |   |   |   |   |   |
| Deferred tax liabilities:                        |   |           |   |   |   |   |   |   |
| Premises and equipment                           |   |           | 169    |   |   |   | 169 |   |
| Prepaid assets                                   |   |           | 147    |   |   |   | 153 |   |
| Stock options                                    |   |           | 422    |   |   |   | 159 |   |
| Cash basis conversion                            |   |           | -      |   |   |   | 68 |   |
| Deferred loan costs                              |   |           | 184    |   |   |   | 153 |   |
| Unrealized gain on securities available for sale |   |           | 153    |   |   |   | 714 |   |
|                                             |   |           |   |   |   |   |   |   |
| Total Deferred Tax Liabilities                   |   | $              | 1,075  |   |   | $      | 1,416 |   |
|                                             |   |           |   |   |   |   |   |   |
| Net Deferred Tax Asset                           |   | $              | 616    |   |   | $      | 199 |   |

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|                                                 |   | 2010           |   |   | 2009   |   |
|------------------------------------------------------|--------|----------------|--------|--------|--------|--------|
|                                                 |   | (In Thousands) |   |
|                                                 |   |           |   |   |   |   |
| Commitments to grant loans, fixed                    |   | $              | 492    |   |   | $      | 7,537 |   |
| Commitments to grant loans, variable                 |   |           | 700    |   |   |   | 2,125 |   |
| Unfunded commitments under lines of credit, fixed    |   |           | 6,430  |   |   |   | 3,519 |   |
| Unfunded commitments under lines of credit, variable |   |           | 48,687 |   |   |   | 48,602 |   |
| Standby letters of credit                            |   |           | 4,226  |   |   |   | 3,599 |   |
|                                                 |   |           |   |   |   |   |   |   |
|                                                 |   | $              | 60,535 |   |   | $      | 65,382 |   |

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|                                     |   | Actual                        |         |   | For Capital Adequacy Purposes |   |                         | To be Well Capitalized under Prompt Corrective Action Provisions |   |
|------------------------------------------|--------|-------------------------------|--------------|--------|-------------------------------|--------|------------------------------|------------------------------------------------------------------|--------|
|                                     |   | Amount                        |         |   | Ratio                         |   |                         | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                     |   | (Dollar Amounts in Thousands) |         |
| December 31, 2010:                       |   |                          |         |   |                          |   |                         |                                                             |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $                             | 45,421       |   |                          |   | 13.0                         | %                                                                |   | $ | >   28,047 |   |   |   | >   8.0 | % |   | $ | >   35,059 |   |   |   | >   10.0 | % |
| Tier 1 capital (to risk-weighted assets) |   |                          |  41,712 |   |                          |   | 11.9                         |                                                             |   |   | >   14,024 |   |   |   | >   4.0 |   |   |   | >   21,036 |   |   |   | >     6.0 |   |
| Tier 1 capital (to average assets)       |   |                          |  41,712 |   |                          |   | 8.1                          |                                                             |   |   | >   20,502 |   |   |   | >   4.0 |   |   |   | >   25,628 |   |   |   | >     5.0 |   |
|                                     |   |                          |         |   |                          |   |                         |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                       |   |                          |         |   |                          |   |                         |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $                             | 41,062       |   |                          |   |  12.8                   | %                                                                |   | $ | >   25,642 |   |   |   | >   8.0 | % |   | $ | >   32,052 |   |   |   | >   10.0 | % |
| Tier 1 capital (to risk-weighted assets) |   |                          | 37,464       |   |                          |   |     11.7 |                                                             |   |   | >   12,821 |   |   |   | >   4.0 |   |   |   | >   19,231 |   |   |   | >     6.0 |   |
| Tier 1 capital (to average assets)       |   |                          | 37,464       |   |                          |   | 8.1                          |                                                             |   |   | >   18,604 |   |   |   | >   4.0 |   |   |   | >   23,255 |   |   |   | >     5.0 |   |

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|                                     |   | Actual                        |         |   | For Capital Adequacy Purposes |   |   | To be Well Capitalized under Prompt Corrective Action Provisions |   |
|------------------------------------------|--------|-------------------------------|--------------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                                     |   | Amount                        |         |   | Ratio                         |   |   | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                     |   | (Dollar Amounts in Thousands) |         |
| December 31, 2010:                       |   |                          |         |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)  |   | $                             | 40,142       |   |                          |   | 11.2   | %                                                                |   | $ | >   28,047 |   |   |   | >   8.0 | % |   | $ | >   N/A |   |   |   | >   - | % |
| Tier 1 capital (to risk-weighted assets) |   |                          |  36,433 |   |                          |   | 10.1   |                                                             |   |   | >   14,024 |   |   |   | >   4.0 |   |   |   | >   N/A |   |   |   | >   - |   |
| Tier 1 capital (to average assets)       |   |                          |  36,433 |   |                          |   | 7.1    |                                                             |   |   | >   20,502 |   |   |   | >   4.0 |   |   |   | >   N/A |   |   |   | >   - |   |

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| Description                                     |   | (Level 1) Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2) Significant Other Observable Inputs |   |   | (Level 3) Significant Unobservable Inputs |   |   | Total  |   |
|-------------------------------------------------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|--------|--------|--------|
|                                            |   | (In Thousands)                                                 |   |
| US Treasury and agency obligations              |   | $                                                              | -      |   |                                          | $      | 32,622 |                                      |   | $      | -      |   |   | $ | 32,622 |   |
| Municipal bonds                                 |   |                                                           | -      |   |                                          |   | 36,546 |                                      |   |   | -      |   |   |   | 36,546 |   |
| Mortgage-backed securities - residential        |   |                                                           | -      |   |                                          |   | 16,749 |                                      |   |   | -      |   |   |   | 16,749 |   |
| Corporate bonds                                 |   |                                                           | -      |   |                                          |   | 3,954  |                                      |   |   | -      |   |   |   | 3,954 |   |
|                                            |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |   |   |   |
| December 31, 2010 Securities available for sale |   | $                                                              | -      |   |                                          | $      | 89,871 |                                      |   | $      | -      |   |   | $ | 89,871 |   |
| US Treasury and agency obligations              |   | $                                                              | -      |   |                                          | $      | 17,083 |                                      |   | $      | -      |   |   | $ | 17,083 |   |
| Municipal bonds                                 |   |                                                           | -      |   |                                          |   | 28,574 |                                      |   |   | -      |   |   |   | 28,574 |   |
| Mortgage-backed securities - residential        |   |                                                           | -      |   |                                          |   | 23,119 |                                      |   |   | -      |   |   |   | 23,119 |   |
| Corporate bonds                                 |   |                                                           | -      |   |                                          |   | 4,019  |                                      |   |   | -      |   |   |   | 4,019 |   |
|                                            |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |   |   |   |   |
| December 31, 2009 Securities available for sale |   | $                                                              | -      |   |                                          | $      | 72,795 |                                      |   | $      | -      |   |   | $ | 72,795 |   |

| Description                               |   | (Level 1) Quoted Prices in Active Markets for Identical Assets |   |   | (Level 2) Significant Other Observable Inputs |   |   | (Level 3) Significant Unobservable Inputs |   |   | Total  |   |
|-------------------------------------------|--------|----------------------------------------------------------------|--------|--------|-----------------------------------------------|--------|--------|-------------------------------------------|--------|--------|--------|--------|
|                                      |   | (In Thousands)                                                 |   |
|                                      |   |                                                           |   |   |                                          |   |   |                                      |   |   |   |   |
| December 31, 2010 Impaired loans          |   | $                                                              | -      |   |                                          | $      | -      |                                      |   | $      | 144    |   |   | $ | 144 |   |
| December 31, 2010 Other real estate owned |   | $                                                              | -      |   |                                          | $      | -      |                                      |   | $      | 3,069  |   |   | $ | 3,069 |   |
| December 31, 2009 Impaired loans          |   | $                                                              | -      |   |                                          | $      | -      |                                      |   | $      | 328    |   |   | $ | 328 |   |

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|                                                                       |   | December 31, 2010 |    |   | December 31, 2009 |   |
|----------------------------------------------------------------------------|--------|-------------------|---------|--------|-------------------|--------|
|                                                                       |   | Carrying Amount   |    |   | Fair Value        |   |   | Carrying Amount |   |   | Fair Value |   |
|                                                                       |   | (In Thousands)    |    |
| Financial assets:                                                          |   |              |    |   |              |   |   |   |   |   |   |   |
| Cash and cash equivalents                                                  |   | $                 | 19,643  |   |              | $      | 19,643 |   |   | $ | 26,464 |   |   | $ | 26,464 |   |
| Interest bearing time deposits                                             |   |              | 8,326   |   |              |   | 8,434 |   |   |   | 10,724 |   |   |   | 10,857 |   |
| Securities available-for-sale                                              |   |              | 89,871  |   |              |   | 89,871 |   |   |   | 72,795 |   |   |   | 72,795 |   |
| Loans receivable, net of allowance                                         |   |              | 384,456 |   |              |   | 388,794 |   |   |   | 346,320 |   |   |   | 351,075 |   |
| Restricted investments in bank stock                                       |   |              | 2,006   |   |              |   | 2,006 |   |   |   | 2,109 |   |   |   | 2,109 |   |
| Accrued interest receivable                                                |   |              | 1,503   |   |              |   | 1,503 |   |   |   | 1,615 |   |   |   | 1,615 |   |
|                                                                       |   |              |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                                                     |   |              |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                                   |   |              | 415,267 |   |              |   | 401,468 |   |   |   | 381,284 |   |   |   | 373,087 |   |
| Securities sold under agreements to repurchase and federal funds purchased |   |              | 46,433  |   |              |   | 46,435 |   |   |   | 30,964 |   |   |   | 30,974 |   |
| Long-term borrowings                                                       |   |              | 13,586  |   |              |   | 14,006 |   |   |   | 17,016 |   |   |   | 17,197 |   |
| Accrued interest payable                                                   |   |              | 941     |   |              |   | 941 |   |   |   | 1,457 |   |   |   | 1,457 |   |
|                                                                       |   |              |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Off-balance sheet finanacial instruments:                                  |   |              |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Commitments to grant loans                                                 |   |              | -       |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Unfunded commitments under lines of credit                                 |   |              | -       |   |              |   | - |   |   |   | - |   |   |   | - |   |
| Standby letters of credit                                                  |   |              | -       |   |              |   | - |   |   |   | - |   |   |   | - |   |

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|                                             |   | As of December 31, |   |
|--------------------------------------------------|--------|--------------------|--------|
|                                             |   | 2010               |   |   | 2009 |   |
|                                             |   | (in Thousands)     |   |
| ASSETS                                           |   |               |   |   |   |   |
|                                             |   |               |   |   |   |   |
| Cash                                             |   | $                  | 399    |   |   | $ | 467 |   |
| Other assets                                     |   |               | 22     |   |   |   | 16 |   |
| Investment in subsidiary                         |   |               | 42,008 |   |   |   | 38,849 |   |
| Total Assets                                     |   | $                  | 42,429 |   |   | $ | 39,332 |   |
|                                             |   |               |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY       |   |               |   |   |   |   |   |   |
|                                             |   |               |   |   |   |   |   |   |
| Long-term borrowings                             |   | $                  | 5,700  |   |   | $ | 5,650 |   |
| Other liabilities                                |   |               | -      |   |   |   | 5 |   |
| Stockholders’ equity                       |   |               | 36,729 |   |   |   | 33,677 |   |
| Total Liabilities and Stockholders’ Equity |   | $                  | 42,429 |   |   | $ | 39,332 |   |

|                                           |   | Years Ending December 31, |   |
|------------------------------------------------|--------|---------------------------|--------|
|                                           |   | 2010                      |   |   | 2009 |   |
|                                           |   | (In Thousands)            |   |
|                                           |   |                      |   |   |   |   |
| Interest income on interest bearing deposits   |   | $                         | 2      |   |   | $ | 4 |   |
| Interest expense on borrowings                 |   |                      | (432   | ) |   |   | (282 | ) |
| Other expenses                                 |   |                      | (102   | ) |   |   | (99 | ) |
| Undistributed net income of banking subsidiary |   |                      | 5,017  |   |   |   | 2,989 |   |
| Income before income taxes                     |   |                      | 4,485  |   |   |   | 2,612 |   |
| Income tax benefit                             |   |                      | 177    |   |   |   | 121 |   |
| Net income                                     |   | $                         | 4,662  |   |   | $ | 2,733 |   |

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|                                                     |   | Years Ending December 31, |   |
|----------------------------------------------------------|--------|---------------------------|--------|
|                                                     |   | 2010                      |   |   | 2009 |   |
|                                                     |   | (in Thousands)            |   |
|                                                     |   |                      |   |   |   |   |
| Cash Flows from Operating Activities:                    |   |                      |   |   |   |   |
| Net income                                               |   | $                         | 4,662  |   |   | $ | 2,733 |   |
| Adjustments to reconcile net income to net cash used in  |   |                      |   |   |   |   |   |   |
| operating activities:                                    |   |                      |   |   |   |   |   |   |
| Net change in other assets and liabilities               |   |                      | (11    | ) |   |   | (19 | ) |
| Equity in undistributed net income of banking subsidiary |   |                      | (5,017 | ) |   |   | (2,989 | ) |
| Net Cash Used in Operating Activities                    |   |                      | (366   | ) |   |   | (275 | ) |
|                                                     |   |                      |   |   |   |   |   |   |
| Cash Flows from Investing Activities:                    |   |                      |   |   |   |   |   |   |
| Capital contribution to banking subsidiary               |   |                      | -      |   |   |   | (3,771 | ) |
| Dividend from banking subsidiary                         |   |                      | 770    |   |   |   | - |   |
| Net Cash Provided by (Used in) Investing Activities      |   |                      | 770    |   |   |   | (3,771 | ) |
|                                                     |   |                      |   |   |   |   |   |   |
| Cash Flows from Financing Activities:                    |   |                      |   |   |   |   |   |   |
| Proceeds from long-term borrowings                       |   |                      | 50     |   |   |   | 4,250 |   |
| Proceeds from exercise of stock options                  |   |                      | -      |   |   |   | 163 |   |
| Stock tendered for options                               |   |                      | (381   | ) |   |   | - |   |
| Dividends Paid                                           |   |                      | (141   | ) |   |   | - |   |
| Purchase of treasury stock                               |   |                      | -      |   |   |   | - |   |
| Net Cash Provided by (Used in) Financing Activities      |   |                      | (472   | ) |   |   | 4,413 |   |
| Net Increase in Cash                                     |   |                      | (68    | ) |   |   | 367 |   |
|                                                     |   |                      |   |   |   |   |   |   |
| Cash – Beginning                                   |   |                      | 467    |   |   |   | 100 |   |
|                                                     |   |                      |   |   |   |   |   |   |
| Cash - Ending                                            |   | $                         | 399    |   |   | $ | 467 |   |

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 9. CHANGES IN AND DISAGREEMENTS 

CONTROLS AND 

| /s/ David M. Lobach, Jr.                        |   |
|-------------------------------------------------|--------|
| David M. Lobach, Jr.                            |   |
| Chairman, President and Chief Executive Officer |   |

| /s/ Judith A. Hunsicker                                   |   |
|-----------------------------------------------------------|--------|
| Judith A. Hunsicker                                       |   |
| Senior Executive Vice President, Chief Operating Officer, |   |
| Secretary and Chief Financial Officer                     |   |

Item 9B. OTHER 

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DIRECTORS, EXECUTIVE 

EXECUTIVE COMPENSATION

12.  SECURITY 

Item 13.  CERTAIN 

PRINCIPAL ACCOUNTANT 

|                   |   | 2010   |    |   | 2009   |   |
|------------------------|--------|--------|---------|--------|--------|--------|
| Audit fees (1)         |   | $      | 67,914  |   |   | $      | 73,549 |   |
| Audit -related fees(2) |   |   | 1,500   |   |   |   | 3,452 |   |
| Tax fees(3)            |   |   | 8,139   |   |   |   | 8,384 |   |
| All other fees (4)     |   |   | 24,000  |   |   |   | - |   |
|                   |   |   |    |   |   |   |   |   |
|                   |   | $      | 101,553 |   |   | $      | 85,385 |   |

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Part 

| Exhibit |                                                                                                                                                                                                                                  |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Number  | Description                                                                                                                                                                                                                           |
|    |                                                                                                                                                                                                                                  |
| 3.1     | Articles of Incorporation, as amended (conformed) (Incorporated by reference to Exhibit 3.1 of Registrants Form 10-Q filed on May 14, 2010).                                                                                          |
| 3.2     | By-Laws (Incorporated by reference to Exhibit 2 of Registrant’s Form 8-A filed on December 11, 2008).                                                                                                                           |
| 10.1    | Embassy Bancorp, Inc. Option Plan (Incorporated by reference to Exhibit 10.1 of Registrant’s Registration Statement on Form S-8 filed on February 22, 2010).                                                                    |
| 10.2    | Embassy Bancorp, Inc. 2010 Stock Incentive Plan (Incorporated by reference to Annex A of Registrant’s definitive proxy statement filed on April 30, 2010).                                                                      |
| 10.3    | Form of Stock Option Grant Agreement – Directors (Incorporated by reference to Exhibit 10.1 of Registrant’s Form 10-Q filed on May 14, 2010).                                                                             |
| 10.4    | Form of Stock Option Grant Agreement – Executive Officers (Incorporated by reference to Exhibit 10.2 of Registrant’s Form 10-Q filed on May 14, 2010).                                                                    |
| 10.5    | Lease Agreement for the Rte. 512 Bethlehem Office (Incorporated by reference to Exhibit 10.2 of Registrant’s Form 10-K filed on March 31, 2009).                                                                                |
| 10.6    | Lease Agreement dated October 21, 2005 for Hamilton Blvd. and Mill Creek Rd., Lower Macungie Township, Pennsylvania (Incorporated by reference to Exhibit 10.3 of Registrant’s Form 10-K filed on March 31, 2009).              |
| 10.7    | Lease Addendum for additional space in the Rte. 512, Bethlehem Office (Incorporated by reference to Exhibit 10.4 of Registrant’s Form 10-K filed on March 31, 2009).                                                            |
| 10.8    | Lease Agreement dated March 11, 2009 for Cedar Crest Blvd., Allentown, Pennsylvania (Incorporated by reference to Exhibit 10.5 of Registrant’s Form 10-K filed on March 31, 2009).                                              |
| 10.9    | Lease Agreement for Tilghman Street location (Incorporated by reference to Exhibit 10.6 of Registrant’s Form 10-K filed on March 31, 2009).                                                                                     |
| 10.10   | Lease Agreement dated March 17, 2006 for 925 West Broad St, Bethlehem PA (Incorporated by reference to Exhibit 10.7 of Registrant’s Form 10-K filed on March 31, 2009).                                                         |
| 10.11   | Lease Agreement dated June 17, 2008 for 5828 Old Bethlehem Pike, Center Valley, PA (Incorporated by reference to Exhibit 10.8 of Registrant’s Form 10-K filed on March 31, 2009).                                               |
| 10.12   | Lease Agreement dated March 19, 2009 for Corriere Road and Route 248 in Lower Nazareth Township, PA (Incorporated by reference to Exhibit 10.9 of Registrant’s Form 10-K filed on March 31, 2009).                              |
| 10.13   | Employment Agreement – D. Lobach, dated January 1, 2006 (Incorporated by reference to Exhibit 10.10 of Registrant’s Form 10-K filed on March 31, 2009).                                                                   |
| 10.14   | Amendment to Employment Agreement between Embassy Bank for the Lehigh Valley and David M. Lobach, Jr., dated November 19, 2010 (Incorporated by reference to Exhibit 10.5 of Registrant’s Form 8-K filed on November 23, 2010). |
| 10.15   | Employment Agreement – J. Hunsicker, dated January 1, 2006 (Incorporated by reference to Exhibit 10.11 of Registrant’s Form 10-K filed on March 31, 2009).                                                                |
| 10.16   | Amendment to Employment Agreement between Embassy Bank for the Lehigh Valley and Judith A. Hunsicker, dated November 19, 2010 (Incorporated by reference to Exhibit 10.6 of Registrant’s Form 8-K filed on November 23, 2010).  |

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| 10.17 | Employment Agreement – J. Bartholomew, dated February 20, 2009 (Incorporated by reference to Exhibit 10.12 of Registrant’s Form 10-K filed on March 31, 2009).                                                                                                |
|-------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.18 | Amendment to Employment Agreement between Embassy Bank for the Lehigh Valley and James R. Bartholomew, dated November 19, 2010 (Incorporated by reference to Exhibit 10.7 of Registrant’s Form 8-K filed on November 23, 2010).                                     |
| 10.19 | Amended and Restated Supplemental Executive Retirement Plan Agreement between Embassy Bank for the Lehigh Valley and David M. Lobach, Jr., dated November 19, 2010 (Incorporated by reference to Exhibit 10.2 of Registrant’s Form 8-K filed on November 23, 2010). |
| 10.20 | Supplemental Executive Retirement Plan Agreement between Embassy Bank for the Lehigh Valley and David M. Lobach, Jr., dated November 19, 2010 (Incorporated by reference to Exhibit 10.1 of Registrant’s Form 8-K filed on November 23, 2010).                      |
| 10.21 | Amended and Restated Supplemental Executive Retirement Plan Agreement between Embassy Bank for the Lehigh Valley and Judith A. Hunsicker, dated November 19, 2010 (Incorporated by reference to Exhibit 10.3 of Registrant’s Form 8-K filed on November 23, 2010).  |
| 10.22 | Amended and Restated Supplemental Executive Retirement Plan Agreement between Embassy Bank for the Lehigh Valley and James R. Bartholomew, dated November 19, 2010 (Incorporated by reference to Exhibit 10.4 of Registrant’s Form 8-K filed on November 23, 2010). |
| 10.23 | Loan Agreement, dated as of December 22, 2009, by and between Embassy Bancorp, Inc. and Univest National Bank and Trust Co. (Incorporated by reference to Exhibit 10.1 of Registrant's Form 8-K filed on December 24, 2009).                                              |
| 10.24 | Subordinated Term Loan Note, dated as of December 22, 2009, by Embassy Bancorp, Inc. in favor of Univest National Bank and Trust Co. (Incorporated by reference to Exhibit 10.2 of Registrant's Form 8-K filed on December 24, 2009).                                     |
| 10.25 | Stock Pledge Agreement, dated as of December 22, 2009, by and between Embassy Bancorp, Inc. and Univest National Bank and Trust Co. (Incorporated by reference to Exhibit 10.3 of Registrant's Form 8-K filed on December 24, 2009).                                      |
| 10.26 | Loan Agreement, dated as of November 11, 2008, by and between Embassy Bancorp, Inc. and Univest National Bank and Trust Co. (Incorporated by reference to Exhibit 10.4 of Registrant's Form 8-K filed on December 24, 2009).                                              |
| 10.27 | Subordinated Term Loan Note, dated as of November 11, 2008, by Embassy Bancorp, Inc. in favor of Univest National Bank and Trust Co. (Incorporated by reference to Exhibit 10.5 of Registrant's Form 8-K filed on December 24, 2009).                                     |
| 10.28 | Stock Pledge Agreement, dated as of November 11, 2008, by and between Embassy Bancorp, Inc. and Univest National Bank and Trust Co. (Incorporated by reference to Exhibit 10.6 of Registrant's Form 8-K filed on December 24, 2009).                                      |
| 10.29 | First Allonge to Subordinated Term Note, dated as of December 22, 2009, by Embassy Bancorp, Inc. and Univest National Bank and Trust Co. (Incorporated by reference to Exhibit 10.7 of Registrant's Form 8-K filed on December 24, 2009).                                 |
| 11.1  | The statement regarding computation of per share earnings required by this exhibit is contained in Note 5 to the financial statements captions “Basic and Diluted Earnings Per Share.”                                                                        |
| 21.1  | Subsidiaries of the Registrant.                                                                                                                                                                                                                                           |
| 23.1  | Consent of ParenteBeard LLC.                                                                                                                                                                                                                                              |
| 31.1  | Certification of Principal Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                        |
| 31.2  | Certification of Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).                                                                                                                                                                                        |
| 32.1  | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 1350 of the Sarbanes-Oxley Act of 2002.                                                                                                                                  |

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NATURE

|   |           |   | EMBASSY BANCORP, INC.                            |
|--------|----------------|--------|--------------------------------------------------|
|   |           |   |                                             |
|   |           |   |                                             |
|   |           | By     | /s/ David M. Lobach, Jr.                         |
|   |           |   | David M. Lobach, Jr.                             |
| Dated: | March 31, 2011 |   | Chairman, President and Chief Executive Officer  |
|   |           |   |                                             |
|   |           |   |                                             |
| Dated: | March 31, 2011 | By     | /s/ Judith A. Hunsicker                          |
|   |           |   | Judith A. Hunsicker                              |
|   |           |   | Senior Executive Vice President, Chief Operating |
|   |           |   | Officer, Secretary and Chief Financial Officer   |

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|   | Dated: March 31, 2011 | /s/ Geoffrey F. Boyer                                    |   |
|--------|-----------------------|----------------------------------------------------------|--------|
|   |                  | Geoffrey F. Boyer, Director                              |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ John B. Brew Jr.                                     |   |
|   |                  | John B. Brew, Jr., Director                              |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ Robert P. Daday                                      |   |
|   |                  | Robert P. Daday, Director                                |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ John G. Englesson                                    |   |
|   |                  | John G. Englesson, Director                              |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ Elmer D. Gates                                       |   |
|   |                  | Elmer D. Gates, Lead Director                            |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ M. Bernadette Holland                                |   |
|   |                  | M. Bernadette Holland, Director                          |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ Bernard M. Lesavoy                                   |   |
|   |                  | Bernard M. Lesavoy, Director                             |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ David M. Lobach Jr.                                  |   |
|   |                  | David M. Lobach, Jr., Director and Chairman of the Board |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ John C. Pittman                                      |   |
|   |                  | John C. Pittman, Director                                |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ Frank Banko                                          |   |
|   |                  | Frank Banko, Director                                    |   |
|   |                  |                                                     |   |
|   | Dated: March 31, 2011 | /s/ John T. Yurconic                                     |   |
|   |                  | John T. Yurconic, Director                               |   |

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