----

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| 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 |
|---|------------------------------------------------------------------------------------------|

| West Virginia(State or other jurisdiction of incorporation or organization) |   | 03-0398338(IRS Employer Identification No.) |
|----------------------------------------------------------------------------------|--------|---------------------------------------------|

| 823 Eighth Street, Huntington, West Virginia(Address of Principal Executive Offices) |   | 25701(Zip Code) |
|--------------------------------------------------------------------------------------|--------|-----------------|

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

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|       |                                                                                                               |  Page |
|------------|--------------------------------------------------------------------------------------------------------------------|------------|
| ITEM 1.    | Business                                                                                                           | 1          |
| ITEM 1A.   | Risk Factors                                                                                                       | 32         |
| ITEM 1B.   | Unresolved Staff Comments                                                                                          | 32         |
| ITEM 2.    | Properties                                                                                                         | 32         |
| ITEM 3.    | Legal Proceedings                                                                                                  | 32         |
| ITEM 4.    | Reserved                                                                                                           | 33         |
| ITEM 5.    | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | 33         |
| ITEM 6.    | Selected Financial Data                                                                                            | 33         |
| ITEM 7.    | Management’s Discussion and Analysis of Financial Condition and Results of Operations                        | 35         |
| ITEM 7A.   | Quantitative and Qualitative Disclosures About Market Risk                                                         | 48         |
| ITEM 8.    | Financial Statements and Supplementary Data                                                                        | 49         |
| ITEM 9.    | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure                               | 79         |
| ITEM 9A.   | Controls and Procedures                                                                                            | 79         |
| ITEM 9B.   | Other Information                                                                                                  | 80         |
| ITEM 10.   | Directors, Executive Officers and Corporate Governance                                                             | 80         |
| ITEM 11.   | Executive Compensation                                                                                             | 81         |
| ITEM 12.   | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters                     | 81         |
| ITEM 13.   | Certain Relationships and Related Transactions, and Director Independence                                          | 81         |
| ITEM 14.   | Principal Accountant Fees and Services                                                                             | 81         |
| ITEM 15.   | Exhibits and Financial Statement Schedules                                                                         | 81         |
| Signatures |                                                                                                               | 82         |

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| ITEM 1. | Business |
|---------|----------|

| ·   | statements of our goals, intentions and expectations; |
|--------------------|-------------------------------------------------------|

| ·   | statements regarding our business plans and prospects and growth and operating strategies; |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | statements regarding the asset quality of our loan and investment portfolios; and |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | estimates of our risks and future costs and benefits. |
|--------------------|-------------------------------------------------------|

| ·   | our ability to manage the risk in our loan portfolio; |
|--------------------|-------------------------------------------------------|

| ·   | significantly increased competition among depository and other financial institutions; |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | our ability to execute our plan to grow our assets on a profitable basis; |
|--------------------|---------------------------------------------------------------------------|

| ·   | the expected growth opportunities and cost savings from our recent merger may not be fully realized or may take longer to realize than expected; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to execute on a favorable basis any plan we may have to acquire other institutions or branches or establish new offices; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes in the interest rate environment that reduce our margins or reduce the fair value of financial instruments and inflation; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------|

| ·   | general economic conditions, either nationally or in our market area; |
|--------------------|-----------------------------------------------------------------------|

| ·   | adverse changes in the securities and national and local real estate markets (including real estate values); |
|--------------------|--------------------------------------------------------------------------------------------------------------|

| ·   | legislative or regulatory changes that adversely affect our business, including regulatory changes imposed by the Dodd-Frank Wall Street Reform and Consumer Protection Act and related regulations; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | our ability to enter new markets successfully and take advantage of growth opportunities; |
|--------------------|-------------------------------------------------------------------------------------------|

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| ·   | changes in consumer spending, borrowing and savings habits; |
|--------------------|-------------------------------------------------------------|

| ·   | the effect of a weak economy on our lending portfolio; |
|--------------------|--------------------------------------------------------|

| ·   | the impact of the U.S. government’s economic stimulus program and its various financial institution rescue plans including TARP; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes in accounting policies and practices, as may be adopted by the bank regulatory agencies and the authoritative accounting and auditing bodies; and |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | changes in our organization, compensation and benefit plans. |
|--------------------|--------------------------------------------------------------|

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|                                                                                                                                                                                                                                      |   | At December 31,        |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------|---------|
|                                                                                                                                                                                                                                      |   | 2010                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                                                                                                                                                                                                      |   | Amount                 |    |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |   | Amount |   |   | Percent |   |
|                                                                                                                                                                                                                                      |   | (Dollars in thousands) |    |
| Loans:                                                                                                                                                                                                                                    |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                                                                                                                                                                                                    |   | $                      | 173,898 |   |   |   | 48.71 | % |   | $ | 170,515 |   |   |   | 46.64 | % |   | $ | 107,458 |   |   |   | 47.93 | % |   | $ | 98,583 |   |   |   | 47.55 | % |   | $ | 95,568 |   |   |   | 47.75 | % |
| Commercial                                                 |   |                   | 107,388 |   |   |   | 30.08 |   |   |   | 115,996 |   |   |   | 31.73 |   |   |   | 68,116 |   |   |   | 30.38 |   |   |   | 64,103 |   |   |   | 30.92 |   |   |   | 59,381 |   |   |   | 29.67 |   |
| Residential real estate                                    |   |                   | 55,406  |   |   |   | 15.52 |   |   |   | 55,332 |   |   |   | 15.13 |   |   |   | 35,543 |   |   |   | 15.85 |   |   |   | 31,341 |   |   |   | 15.12 |   |   |   | 31,930 |   |   |   | 15.95 |   |
| Consumer                                                   |   |                   | 20,308  |   |   |   | 5.69 |   |   |   | 23,767 |   |   |   | 6.50 |   |   |   | 13,091 |   |   |   | 5.84 |   |   |   | 13,297 |   |   |   | 6.41 |   |   |   | 13,260 |   |   |   | 6.63 |   |
| Total loans                                                                                                                                                                                                                               |   |                   | 357,000 |   |   |   | 100.00 | % |   |   | 365,610 |   |   |   | 100.00 | % |   |   | 224,208 |   |   |   | 100.00 | % |   |   | 207,324 |   |   |   | 100.00 | % |   |   | 200,139 |   |   |   | 100.00 | % |
|                                                                                                                                                                                                                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other items:                                                                                                                                                                                                                              |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unearned fees and discounts, net                                                                                                                                                                                                          |   |                   | (94     | ) |   |   |   |   |   |   | (64 | ) |   |   |   |   |   |   | (36 | ) |   |   |   |   |   |   | (34 | ) |   |   |   |   |   |   | (36 | ) |   |   |   |   |
| Undisbursed loan funds                                                                                                                                                                                                                    |   |                   | — |   |   |   |   |   |   |   | — |   |   |   |   |   |   |   | — |   |   |   |   |   |   |   | — |   |   |   |   |   |   |   | — |   |   |   |   |   |
| Allowance for loan losses                                                                                                                                                                                                                 |   |                   | (5,005  | ) |   |   |   |   |   |   | (4,785 | ) |   |   |   |   |   |   | (3,227 | ) |   |   |   |   |   |   | (2,852 | ) |   |   |   |   |   |   | (2,659 | ) |   |   |   |   |
|                                                                                                                                                                                                                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans, net                                                                                                                                                                                                                          |   | $                      | 351,901 |   |   |   |   |   |   | $ | 360,761 |   |   |   |   |   |   | $ | 220,945 |   |   |   |   |   |   | $ | 204,438 |   |   |   |   |   |   | $ | 197,444 |   |   |   |   |   |

|                                     |   | Commercial real estate |    |   | Commercial            |   |   | Residential real estate |   |   | Consumer              |   |   | Total  |   |
|------------------------------------------|--------|------------------------|---------|--------|-----------------------|--------|--------|-------------------------|--------|--------|-----------------------|--------|--------|--------|--------|
|                                     |   | Amount                 |    |   | Weighted Average Rate |   |   | Amount                  |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |   | Amount |   |   | Weighted Average Rate |   |
|                                     |   | (Dollars in thousands) |    |
| Due During the Years Ending December 31, |   |                   |    |   |                  |   |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2011                                     |   | $                      | 47,651  |   |                  |   | 5.35   | %                       |   | $      | 46,631                |   |   |   | 4.64   | % |   | $ | 9,980 |   |   |   | 6.04 | % |   | $ | 3,447 |   |   |   | 5.41 | % |   | $ | 107,709 |   |   |   | 5.12 | % |
| 2012 to 2013                             |   |                   | 44,331  |   |                  |   | 6.24   |                    |   |   | 18,673                |   |   |   | 5.26   |   |   |   | 9,599 |   |   |   | 5.94 |   |   |   | 5,058 |   |   |   | 7.65 |   |   |   | 77,661 |   |   |   | 6.06 |   |
| 2014 to 2015                             |   |                   | 60,268  |   |                  |   | 5.68   |                    |   |   | 15,205                |   |   |   | 5.46   |   |   |   | 15,935 |   |   |   | 5.41 |   |   |   | 5,275 |   |   |   | 7.17 |   |   |   | 96,683 |   |   |   | 5.68 |   |
| 2016 to 2020                             |   |                   | 7,798   |   |                  |   | 5.27   |                    |   |   | 11,573                |   |   |   | 4.84   |   |   |   | 15,976 |   |   |   | 4.71 |   |   |   | 5,959 |   |   |   | 7.59 |   |   |   | 41,306 |   |   |   | 5.27 |   |
| 2021 and beyond                          |   |                   | 13,850  |   |                  |   | 5.80   |                    |   |   | 15,306                |   |   |   | 4.05   |   |   |   | 3,916 |   |   |   | 6.25 |   |   |   | 569 |   |   |   | 7.51 |   |   |   | 33,641 |   |   |   | 5.09 |   |
|                                     |   |                   |    |   |                  |   |   |                    |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                    |   | $                      | 173,898 |   |                  |   | 5.72   | %                       |   | $      | 107,388               |   |   |   | 4.80   | % |   | $ | 55,406 |   |   |   | 5.47 | % |   | $ | 20,308 |   |   |   | 7.12 | % |   | $ | 357,000 |   |   |   | 5.49 | % |

----

|                                                                                                                                                                                                                                                                                                                                                        |   | Due After December 31, 2011 |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|---------|
|                                                                                                                                                                                                                                                                                                                                                        |   | Fixed                       |    |   | Adjustable |   |   | Total |   |
|                                                                                                                                                                                                                                                                                                                                                        |   | (In thousands)              |    |
|  Loans:                                                                                                                                                                                                                                                                                                                                                |   |                        |    |   |   |   |   |   |   |
| Commercial real estate                                                        |   | $                           | 79,467  |   |   | $ | 46,780 |   |   | $ | 126,247 |   |
| Commercial                                                                    |   |                        | 18,977  |   |   |   | 41,780 |   |   |   | 60,757 |   |
| Residential real estate                                                       |   |                        | 32,349  |   |   |   | 13,077 |   |   |   | 45,426 |   |
| Consumer                                                                      |   |                        | 15,801  |   |   |   | 1,060 |   |   |   | 16,861 |   |
|                                                                                                                                                                                                                                                                                                                                                        |   |                        |    |   |   |   |   |   |   |   |   |   |
| Total loans                                                                                                                                                                                                                                                                                                                                                 |   | $                           | 146,594 |   |   | $ | 102,697 |   |   | $ | 249,291 |   |

----

----

----

----

|                                                         |   | At December 31,        |    |
|--------------------------------------------------------------|--------|------------------------|---------|
|                                                         |   | 2010                   |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                         |   | (Dollars in thousands) |    |
| Non-accrual loans:                                           |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                       |   | $                      | 1,500   |   |   | $ | 1,783 |   |   | $ | 911 |   |   | $ | 883 |   |   | $ | 2,159 |   |
| Commercial                                                   |   |                   | 1,190   |   |   |   | — |   |   |   | 14 |   |   |   | — |   |   |   | 6 |   |
| Residential real estate                                      |   |                   | 1       |   |   |   | 5 |   |   |   | 155 |   |   |   | 12 |   |   |   | — |   |
| Consumer                                                     |   |                   | 4       |   |   |   | 99 |   |   |   | 9 |   |   |   | 15 |   |   |   | 1 |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-accrual loans                                      |   |                   | 2,695   |   |   |   | 1,887 |   |   |   | 1,089 |   |   |   | 910 |   |   |   | 2,166 |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans delinquent 90 days or greater and still accruing:      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                       |   |                   | 1,059   |   |   |   | — |   |   |   | — |   |   |   | 57 |   |   |   | 382 |   |
| Commercial                                                   |   |                   | 136     |   |   |   | — |   |   |   | 14 |   |   |   | — |   |   |   | 35 |   |
| Residential real estate                                      |   |                   | 401     |   |   |   | 523 |   |   |   | — |   |   |   | 302 |   |   |   | 173 |   |
| Consumer                                                     |   |                   | 164     |   |   |   | 26 |   |   |   | 8 |   |   |   | 29 |   |   |   | 74 |   |
| Total loans delinquent 90 days or greater and still accruing |   |                   | 1,760   |   |   |   | 549 |   |   |   | 22 |   |   |   | 388 |   |   |   | 664 |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing loans                                   |   |                   | 4,455   |   |   |   | 2,436 |   |   |   | 1,111 |   |   |   | 1,298 |   |   |   | 2,830 |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other real estate owned:                                     |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                       |   |                   | 1,783   |   |   |   | 1,774 |   |   |   | 1,306 |   |   |   | 1,249 |   |   |   | — |   |
| Commercial                                                   |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Residential real estate                                      |   |                   | 320     |   |   |   | 495 |   |   |   | 185 |   |   |   | 450 |   |   |   | — |   |
| Consumer                                                     |   |                   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Total real estate owned                                      |   |                   | 2,103   |   |   |   | 2,269 |   |   |   | 1,491 |   |   |   | 1,699 |   |   |   | — |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total non-performing assets                                  |   | $                      | 6,558   |   |   | $ | 4,705 |   |   | $ | 2,602 |   |   | $ | 2,997 |   |   | $ | 2,830 |   |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                      |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing loans to total loans                          |   |                   | 1.25    | % |   |   | 0.67 | % |   |   | 0.50 | % |   |   | 0.66 | % |   |   | 1.41 | % |
| Non-performing assets to total assets                        |   |                   | 1.34    | % |   |   | 0.96 | % |   |   | 0.77 | % |   |   | 1.11 | % |   |   | 1.13 | % |
|                                                         |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                    |   | Loans Delinquent For   |    |   |             |   |
|-------------------------|--------|------------------------|---------|--------|------------------|--------|
|                    |   | 60-89 Days             |    |   | 90 Days and Over |   |   | Total |   |
|                    |   | Number                 |    |   | Amount           |   |   | Number |   |   | Amount |   |   | Number |   |   | Amount |   |
|                    |   | (Dollars in thousands) |    |
|                    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2010    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                  |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate  |   |                   | 1       |   |             | $      | 365 |   |   |   | 6 |   |   | $ | 2,559 |   |   |   | 7 |   |   | $ | 2,924 |   |
| Commercial              |   |                   | 3       |   |             |   | 47 |   |   |   | 9 |   |   |   | 1,326 |   |   |   | 12 |   |   |   | 1,373 |   |
| Residential real estate |   |                   | 3       |   |             |   | 228 |   |   |   | 7 |   |   |   | 402 |   |   |   | 10 |   |   |   | 630 |   |
| Consumer                |   |                   | 17      |   |             |   | 126 |   |   |   | 23 |   |   |   | 168 |   |   |   | 40 |   |   |   | 294 |   |
| Total loans             |   |                   | 24      |   |             | $      | 766 |   |   |   | 45 |   |   | $ | 4,455 |   |   |   | 69 |   |   | $ | 5,221 |   |
|                    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2009    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                  |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate  |   |                   | 1       |   |             | $      | 465 |   |   |   | 5 |   |   | $ | 1,783 |   |   |   | 6 |   |   | $ | 2,248 |   |
| Commercial              |   |                   | — |   |             |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Residential real estate |   |                   | 2       |   |             |   | 31 |   |   |   | 8 |   |   |   | 528 |   |   |   | 10 |   |   |   | 559 |   |
| Consumer                |   |                   | 12      |   |             |   | 94 |   |   |   | 21 |   |   |   | 125 |   |   |   | 33 |   |   |   | 219 |   |
| Total loans             |   |                   | 15      |   |             | $      | 590 |   |   |   | 34 |   |   | $ | 2,436 |   |   |   | 49 |   |   | $ | 3,026 |   |
|                    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2008    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                  |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate  |   |                   | — |   |             | $      | — |   |   |   | 5 |   |   | $ | 911 |   |   |   | 5 |   |   | $ | 911 |   |
| Commercial              |   |                   | 1       |   |             |   | 196 |   |   |   | 2 |   |   |   | 28 |   |   |   | 3 |   |   |   | 224 |   |
| Residential real estate |   |                   | 2       |   |             |   | 119 |   |   |   | 3 |   |   |   | 155 |   |   |   | 5 |   |   |   | 274 |   |
| Consumer                |   |                   | 2       |   |             |   | 23 |   |   |   | 3 |   |   |   | 17 |   |   |   | 5 |   |   |   | 40 |   |
| Total loans             |   |                   | 5       |   |             | $      | 338 |   |   |   | 13 |   |   | $ | 1,111 |   |   |   | 18 |   |   | $ | 1,449 |   |
|                    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2007    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                  |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate  |   |                   | 1       |   |             | $      | 1 |   |   |   | 5 |   |   | $ | 940 |   |   |   | 6 |   |   | $ | 941 |   |
| Commercial              |   |                   | 2       |   |             |   | 78 |   |   |   | — |   |   |   | — |   |   |   | 2 |   |   |   | 78 |   |
| Residential real estate |   |                   | 1       |   |             |   | 74 |   |   |   | 6 |   |   |   | 314 |   |   |   | 7 |   |   |   | 388 |   |
| Consumer                |   |                   | 4       |   |             |   | 24 |   |   |   | 6 |   |   |   | 44 |   |   |   | 10 |   |   |   | 68 |   |
| Total loans             |   |                   | 8       |   |             | $      | 177 |   |   |   | 17 |   |   | $ | 1,298 |   |   |   | 25 |   |   | $ | 1,475 |   |
|                    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2006    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                  |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate  |   |                   | 2       |   |             | $      | 646 |   |   |   | 6 |   |   | $ | 2,540 |   |   |   | 8 |   |   | $ | 3,186 |   |
| Commercial              |   |                   | 2       |   |             |   | 526 |   |   |   | 2 |   |   |   | 41 |   |   |   | 4 |   |   |   | 567 |   |
| Residential real estate |   |                   | 2       |   |             |   | 45 |   |   |   | 3 |   |   |   | 173 |   |   |   | 5 |   |   |   | 218 |   |
| Consumer                |   |                   | 6       |   |             |   | 31 |   |   |   | 7 |   |   |   | 76 |   |   |   | 13 |   |   |   | 107 |   |
| Total loans             |   |                   | 12      |   |             | $      | 1,248 |   |   |   | 18 |   |   | $ | 2,830 |   |   |   | 30 |   |   | $ | 4,078 |   |
|                    |   |                   |    |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

----

|                                                             |   | At or For the Years Ended December 31, |   |
|------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                             |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                             |   | (Dollars in thousands)                 |   |
|                                                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at beginning of year                                     |   | $                                      | 4,785  |   |   | $ | 3,227 |   |   | $ | 2,852 |   |   | $ | 2,659 |   |   | $ | 2,700 |   |
|                                                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs:                                                     |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                           |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                           |   |                                   | 199    |   |   |   | 1,036 |   |   |   | 50 |   |   |   | 161 |   |   |   | 221 |   |
| Commercial                                                       |   |                                   | 4,720  |   |   |   | 295 |   |   |   | 692 |   |   |   | 1,127 |   |   |   | 1,443 |   |
| Residential real estate                                          |   |                                   | 24     |   |   |   | 58 |   |   |   | 48 |   |   |   | 24 |   |   |   | — |   |
| Consumer                                                         |   |                                   | 58     |   |   |   | 117 |   |   |   | 35 |   |   |   | 78 |   |   |   | 91 |   |
| Total charge-offs                                                |   |                                   | 5,001  |   |   |   | 1,506 |   |   |   | 825 |   |   |   | 1,390 |   |   |   | 1,755 |   |
|                                                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                                      |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                           |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                           |   |                                   | 2      |   |   |   | — |   |   |   | 1 |   |   |   | 9 |   |   |   | 7 |   |
| Commercial                                                       |   |                                   | 36     |   |   |   | 33 |   |   |   | 5 |   |   |   | 5 |   |   |   | 6 |   |
| Residential real estate                                          |   |                                   | 40     |   |   |   | 3 |   |   |   | 5 |   |   |   | 12 |   |   |   | — |   |
| Consumer                                                         |   |                                   | 31     |   |   |   | 3 |   |   |   | — |   |   |   | 14 |   |   |   | 7 |   |
| Total recoveries                                                 |   |                                   | 109    |   |   |   | 39 |   |   |   | 11 |   |   |   | 40 |   |   |   | 20 |   |
|                                                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net (charge-offs)                                                |   |                                   | (4,892 | ) |   |   | (1,467 | ) |   |   | (814 | ) |   |   | (1,350 | ) |   |   | (1,735 | ) |
| Provision for   loan losses                       |   |                                   | 5,112  |   |   |   | 3,025 |   |   |   | 1,189 |   |   |   | 1,543 |   |   |   | 1,694 |   |
|                                                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of year                                           |   | $                                      | 5,005  |   |   | $ | 4,785 |   |   | $ | 3,227 |   |   | $ | 2,852 |   |   | $ | 2,659 |   |
|                                                             |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios:                                                          |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net charge-offs to average loans outstanding                     |   |                                   | 1.35   | % |   |   | 0.55 | % |   |   | 0.38 | % |   |   | 0.67 | % |   |   | 0.90 | % |
| Allowance for loan losses to non-performing loans at end of year |   |                                   | 112.35 | % |   |   | 196.43 | % |   |   | 290.46 | % |   |   | 219.72 | % |   |   | 93.96 | % |
| Allowance for loan losses to total loans at end of year          |   |                                   | 1.40   | % |   |   | 1.31 | % |   |   | 1.44 | % |   |   | 1.38 | % |   |   | 1.33 | % |

----

|                                                                                                                                                                                                                                            |   | At December 31,           |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                                                                                                                                                                                            |   | 2010                      |   |   | 2009 |   |   | 2008 |   |
|                                                                                                                                                                                                                                            |   | Allowance for Loan Losses |   |   | Percent of Loans in Each Category to Total Loans |   |   | Allowance for Loan Losses |   |   | Percent of Loans in Each Category to Total Loans |   |   | Allowance for Loan Losses |   |   | Percent of Loans in Each Category to Total Loans |   |
|                                                                                                                                                                                                                                            |   | (Dollars in thousands)    |   |
|                                                                                                                                                                                                                                            |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans:                                                                                                                                                                                                                                          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                                                                                                                                                                                                          |   | $                         | 1,215  |   |   |   | 48.71 | % |   | $ | 1,214 |   |   |   | 46.64 | % |   | $ | 1,144 |   |   |   | 47.93 | % |
| Commercial                                                       |   |                      | 3,252  |   |   |   | 30.08 |   |   |   | 2,993 |   |   |   | 31.73 |   |   |   | 1,730 |   |   |   | 30.38 |   |
| Residential real estate                                          |   |                      | 331    |   |   |   | 15.52 |   |   |   | 351 |   |   |   | 15.13 |   |   |   | 225 |   |   |   | 15.85 |   |
| Consumer                                                         |   |                      | 135    |   |   |   | 5.69 |   |   |   | 105 |   |   |   | 6.50 |   |   |   | 114 |   |   |   | 5.84 |   |
| Total allocated allowance                                                                                                                                                                                                                       |   |                      | 4,933  |   |   |   | 100.00 | % |   |   | 4,663 |   |   |   | 100.00 | % |   |   | 3,213 |   |   |   | 100.00 | % |
| Unallocated                                       |   |                      | 72     |   |   |   |   |   |   |   | 122 |   |   |   |   |   |   |   | 14 |   |   |   |   |   |
| Total                                                            |   | $                         | 5,005  |   |   |   |   |   |   | $ | 4,785 |   |   |   |   |   |   | $ | 3,227 |   |   |   |   |   |

|                                                                                                                                                                                                                                            |   | At December 31,           |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|
|                                                                                                                                                                                                                                            |   | 2007                      |   |   | 2006 |   |
|                                                                                                                                                                                                                                            |   | Allowance for Loan Losses |   |   | Percent of Loans in Each Category to Total Loans |   |   | Allowance for Loan Losses |   |   | Percent of Loans in Each Category to Total Loans |   |
|                                                                                                                                                                                                                                            |   | (Dollars in thousands)    |   |
| Loans:                                                                                                                                                                                                                                          |   |                      |   |   |   |   |   |   |   |   |   |   |
| Commercial real estate                                                                                                                                                                                                                          |   | $                         | 939    |   |   |   | 47.55 | % |   | $ | 958 |   |   |   | 47.75 | % |
| Commercial                                                       |   |                      | 1,567  |   |   |   | 30.92 |   |   |   | 1,300 |   |   |   | 29.67 |   |
| Residential real estate                                          |   |                      | 225    |   |   |   | 15.12 |   |   |   | 216 |   |   |   | 15.95 |   |
| Consumer                                                         |   |                      | 119    |   |   |   | 6.41 |   |   |   | 143 |   |   |   | 6.63 |   |
| Total allocated allowance                                                                                                                                                                                                                       |   |                      | 2,850  |   |   |   | 100.00 | % |   |   | 2,617 |   |   |   | 100.00 | % |
| Unallocated                                       |   |                      | 2      |   |   |   |   |   |   |   | 42 |   |   |   |   |   |
| Total                                                            |   | $                         | 2,852  |   |   |   |   |   |   | $ | 2,659 |   |   |   |   |   |

----

----

----

|                                           |   | At December 31, |
|------------------------------------------------|--------|-----------------|
|                                           |   | 2010            |   |   | 2009 |   |   | 2008 |
|                                           |   | Amortized Cost  |   |   | Fair Value |   |   | Amortized Cost |   |   | Fair Value |   |   | Amortized Cost |   |   | Fair Value |
|                                           |   | (In thousands)  |   |   |
| Investment securities available for sale:      |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage backed securities                     |   | $               | 14,698 |   |   | $ | 14,680 |   |   | $ | 15,536 |   |   | $ | 16,006 |   |   | $ | 11,394 |   |   | $ | 11,836 |   |
| U.S. agency securities                         |   |            | 35,533 |   |   |   | 35,353 |   |   |   | 39,284 |   |   |   | 39,399 |   |   |   | 50,241 |   |   |   | 50,969 |   |
| State and political                            |   |            | 11,542 |   |   |   | 11,515 |   |   |   | 10,306 |   |   |   | 10,299 |   |   |   | 8,495 |   |   |   | 7,854 |   |
| Corporate bonds                                |   |            | — |   |   |   | — |   |   |   | 97 |   |   |   | 97 |   |   |   | — |   |   |   | — |   |
| Total investment securities available for sale |   | $               | 61,773 |   |   | $ | 61,548 |   |   | $ | 65,223 |   |   | $ | 65,801 |   |   | $ | 70,130 |   |   | $ | 70,659 |   |
|                                           |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities held-to-maturity:        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage backed securities                     |   | $               | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |   | $ | — |   |
| U.S. agency securities                         |   |            | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| State and political                            |   |            | 21,626 |   |   |   | 21,260 |   |   |   | 14,778 |   |   |   | 14,873 |   |   |   | 7,459 |   |   |   | 7,459 |   |
| Corporate bonds                                |   |            | 1,384 |   |   |   | 1,526 |   |   |   | 1,356 |   |   |   | 1,497 |   |   |   | 1,827 |   |   |   | 1,827 |   |
| Total investment securities held-to-maturity   |   | $               | 23,010 |   |   | $ | 22,786 |   |   | $ | 16,134 |   |   | $ | 16,370 |   |   | $ | 9,286 |   |   | $ | 9,286 |   |
|                                           |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                           |   | One Year or Less       |    |   | More than One Year through Five Years |   |    | More than Five Years through Ten Years |   |   | More than Ten Years    |   |   | Total Securities |    |
|------------------------------------------------|--------|------------------------|---------|--------|---------------------------------------|--------|---------|----------------------------------------|--------|--------|------------------------|--------|--------|------------------|---------|
|                                           |   | Amortized Cost         |    |   | Weighted Average Yield                |   |    | Amortized Cost                         |   |   | Weighted Average Yield |   |   | Amortized Cost   |    |   | Weighted Average Yield |   |   | Amortized Cost |   |   | Weighted Average Yield |   |   | Amortized Cost |   |   | Fair Value |   |   | Weighted Average Yield |   |
|                                           |   | (Dollars in thousands) |    |
|                                           |   |                   |    |   |                                  |   |    |                                   |   |   |                   |   |   |             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities available for sale:      |   |                   |    |   |                                  |   |    |                                   |   |   |                   |   |   |             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage backed securities                     |   | $                      | 228     |   |                                  |   | 1.93    | %                                      |   | $      | —                |   |   |             | — | % |   | $ | 1,499 |   |   |   | 2.70 | % |   | $ | 12,971 |   |   |   | 3.11 | % |   | $ | 14,698 |   |   | $ | 14,680 |   |   |   | 3.05 | % |
| U.S. agency securities                         |   |                   | 1,011   |   |                                  |   | 2.09    |                                   |   |   | 4,297                  |   |   |             | 2.32    |   |   |   | 4,946 |   |   |   | 2.61 |   |   |   | 25,279 |   |   |   | 2.17 |   |   |   | 35,533 |   |   |   | 35,353 |   |   |   | 2.25 |   |
| State and political(1)                    |   |                   | 1,012   |   |                                  |   | 2.10    |                                   |   |   | 3,851                  |   |   |             | 2.36    |   |   |   | 3,644 |   |   |   | 3.93 |   |   |   | 3,035 |   |   |   | 4.79 |   |   |   | 11,542 |   |   |   | 11,515 |   |   |   | 3.47 |   |
| Corporate bonds                                |   |                   | — |   |                                  |   | — |                                   |   |   | —                |   |   |             | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Total investment securities available for sale |   | $                      | 2,251   |   |                                  |   | 2.08    | %                                      |   | $      | 8,148                  |   |   |             | 2.34    | % |   | $ | 10,089 |   |   |   | 3.10 | % |   | $ | 41,285 |   |   |   | 2.66 | % |   | $ | 61,773 |   |   | $ | 61,548 |   |   |   | 2.67 | % |
|                                           |   |                   |    |   |                                  |   |    |                                   |   |   |                   |   |   |             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |                   |    |   |                                  |   |    |                                   |   |   |                   |   |   |             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Investment securities held-to-maturity:        |   |                   |    |   |                                  |   |    |                                   |   |   |                   |   |   |             |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State and political(2)                         |   | $                      | 1,621   |   |                                  |   | 2.94    | %                                      |   | $      | 1,606                  |   |   |             | 5.44    | % |   | $ | 8,164 |   |   |   | 3.54 | % |   | $ | 10,235 |   |   |   | 3.91 | % |   | $ | 21,626 |   |   | $ | 21,260 |   |   |   | 3.81 | % |
| Corporate bonds                                |   |                   | 498     |   |                                  |   | 5.52    |                                   |   |   | —                |   |   |             | — |   |   |   | — |   |   |   | — |   |   |   | 886 |   |   |   | 9.07 |   |   |   | 1,384 |   |   |   | 1,526 |   |   |   | 7.79 |   |
| Total investment securities held-to-maturity   |   | $                      | 2,119   |   |                                  |   | 3.55    | %                                      |   | $      | 1,606                  |   |   |             | 5.44    | % |   | $ | 8,164 |   |   |   | 3.54 | % |   | $ | 11,121 |   |   |   | 4.32 | % |   | $ | 23,010 |   |   | $ | 22,786 |   |   |   | 4.05 | % |

| (1) | The tax equivalent yield of the state and political securities portfolio was 2.98% for maturities of one year or less, 3.38% for maturities of more than one year through five years, 5.76% for maturities of more than five years through 10 years, 7.06% for maturities of more than 10 years and 5.06% for the total state and political securities portfolio at December 31, 2010. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | The tax equivalent yield of the state and political securities portfolio was 4.26% for maturities of one year or less, 8.04% for maturities of more than one year through five years, 5.17% for maturities of more than five years through 10 years, 5.73% for maturities of more than 10 years and 5.57% for the total state and political securities portfolio at December 31, 2010. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                    |   | For the Years Ended         |    |
|-------------------------|--------|-----------------------------|---------|
|                    |   | 2010                        |    |   | 2009 |   |   | 2008 |   |
|                    |   | Average Outstanding Balance |    |   | Percent |   |   | Weighted Average Rate |   |   | Average Outstanding Balance |   |   | Percent |   |   | Weighted Average Rate |   |   | Average Outstanding Balance |   |   | Percent |   |   | Weighted Average Rate |   |
|                    |   | (Dollars in thousands)      |    |
| Deposit type:           |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts        |   | $                           | 19,334  |   |   |   | 4.79 | % |   |   | 0.18 | % |   | $ | 14,037 |   |   |   | 4.66 | % |   |   | 0.20 | % |   | $ | 9,623 |   |   |   | 4.10 | % |   |   | 0.42 | % |
| Certificates of deposit |   |                        | 222,753 |   |   |   | 55.18 |   |   |   | 2.40 |   |   |   | 171,847 |   |   |   | 57.02 |   |   |   | 3.46 |   |   |   | 130,090 |   |   |   | 55.46 |   |   |   | 4.71 |   |
| Money market            |   |                        | 59,489  |   |   |   | 14.74 |   |   |   | 0.45 |   |   |   | 33,521 |   |   |   | 11.12 |   |   |   | 0.50 |   |   |   | 30,6264 |   |   |   | 13.06 |   |   |   | 1.81 |   |
| NOW                     |   |                        | 48,877  |   |   |   | 12.11 |   |   |   | 0.35 |   |   |   | 40,139 |   |   |   | 13.32 |   |   |   | 0.30 |   |   |   | 30,476 |   |   |   | 12.99 |   |   |   | 1.56 |   |
| Checking                |   |                        | 53,195  |   |   |   | 13.18 |   |   |   | — |   |   |   | 41,839 |   |   |   | 13.88 |   |   |   | — |   |   |   | 33,751 |   |   |   | 14.39 |   |   |   | — |   |
|                    |   |                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits          |   | $                           | 403,648 |   |   |   | 100.00 | % |   |   | 1.44 | % |   | $ | 301,383 |   |   |   | 100.00 | % |   |   | 2.08 | % |   | $ | 234,586 |   |   |   | 100.00 | % |   |   | 3.07 | % |

|   |                                                                                                                                                                                                                                                                                   |   | AtDecember 31, 2010 |    |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------|---------|
|   |                                                                                                                                                                                                                                                                                   |   | (In thousands)      |    |
|   |                                                                                                                                                                                                                                                                                   |   |                |    |
|   | Three months or less                                            |   | $                   | 24,949  |   |
|   | Over three months through six months                                                                                                                                                                                                                                                   |   |                | 14,447  |   |
|   | Over six months through one year                                                                                                                                                                                                                                                       |   |                | 34,239  |   |
|   | Over one year to three years                                                                                                                                                                                                                                                           |   |                | 30,752  |   |
|   | Over three years                                                |   |                | 10,510  |   |
|   |                                                                                                                                                                                                                                                                                   |   |                |    |   |
|   | Total                                                           |   | $                   | 114,897 |   |

|                                          |   | At or For the Years Ended December 31, |   |
|-----------------------------------------------|--------|----------------------------------------|--------|
|                                          |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                                          |   | (Dollars in thousands)                 |   |
|                                          |   |                                   |   |   |   |   |   |   |   |
| Balance at end of year                        |   | $                                      | 33,721 |   |   | $ | 39,891 |   |   | $ | 35,560 |   |
| Average balance during year                   |   | $                                      | 28,647 |   |   | $ | 37,247 |   |   | $ | 29,970 |   |
| Maximum outstanding at any month end          |   | $                                      | 36,221 |   |   | $ | 49,184 |   |   | $ | 42,462 |   |
| Weighted average interest rate at end of year |   |                                   | 2.03   | % |   |   | 2.30 | % |   |   | 3.07 | % |
| Average interest rate during year             |   |                                   | 2.44   | % |   |   | 3.05 | % |   |   | 3.57 | % |

----

|                                          |   | At or For the Years Ended December 31, |   |
|-----------------------------------------------|--------|----------------------------------------|--------|
|                                          |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |
|                                          |   | (Dollars in thousands)                 |   |
|                                          |   |                                   |   |   |   |   |   |   |   |
| Balance at end of year                        |   | $                                      | 19,375 |   |   | $ | 20,730 |   |   | $ | 12,498 |   |
| Average balance during year                   |   | $                                      | 19,191 |   |   | $ | 14,667 |   |   | $ | 11,604 |   |
| Maximum outstanding at any month end          |   | $                                      | 20,675 |   |   | $ | 25,204 |   |   | $ | 12,952 |   |
| Weighted average interest rate at end of year |   |                                   | 1.96   | % |   |   | 1.96 | % |   |   | 3.66 | % |
| Average interest rate during year             |   |                                   | 2.07   | % |   |   | 2.84 | % |   |   | 4.21 | % |

----

----

----

----

----

| ·   | establishes a comprehensive framework of activities in which the Bank can engage; |
|--------------------|-----------------------------------------------------------------------------------|

| ·   | limits the types and amounts of investments permissible for the Bank; |
|--------------------|-----------------------------------------------------------------------|

| ·   | limits the ability of the Bank to extend credit to any given borrower; |
|--------------------|------------------------------------------------------------------------|

| ·   | significantly limits the transactions in which the Bank may engage with its affiliates; |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | places limitations on capital distributions by the Bank; |
|--------------------|----------------------------------------------------------|

| ·   | imposes assessments to the West Virginia Division of Banking to fund its operations; |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | establishes a continuing and affirmative obligation, consistent with the bank’s safe and sound operation, to help meet the credit needs of its community, including low- and moderate-income neighborhoods; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | requires the Bank to maintain certain non-interest-bearing reserves against its transaction accounts; |
|--------------------|-------------------------------------------------------------------------------------------------------|

| ·   | establishes various capital categories resulting in various levels of regulatory scrutiny applied to the institution in a particular category; and |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | establishes standards for safe and sound operations. |
|--------------------|------------------------------------------------------|

----

----

----

| ·   | “well capitalized” if it has a total risk-based capital ratio of 10% or greater and a leverage ratio of 5% or greater; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | “adequately capitalized” if it has a total risk-based capital ratio of 8% or greater, a Tier I risk-based capital ratio of 4% or greater and generally a leverage ratio of 4% or greater; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | “undercapitalized” if it has a total risk-based capital ratio of less than 8%, a Tier I risk-based capital ratio of less than 4%, or generally a leverage ratio of less than 4%; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6%, a Tier I risk-based capital ratio of less than 3%, or a leverage ratio of less than 3%; and |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2%. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| ITEM 1A. | Risk Factors |
|----------|--------------|

| ITEM 1B. | Unresolved Staff Comments |
|----------|---------------------------|

| ITEM 2. | Properties |
|---------|------------|

| Location                                                       |   | Leased or Owned |   | Year Acquired or Leased |   | Square Footage |   |   | Net Book Value of Real Property |   |
|----------------------------------------------------------------|--------|-----------------|--------|------------------------------|--------|----------------|--------|--------|---------------------------------|--------|
|                                                           |   |            |   |                         |   |           |   |   | (In thousands)                  |   |
| Main Office:                                                   |   |            |   |                         |   |           |   |   |                            |   |
|                                                           |   |            |   |                         |   |           |   |   |                            |   |
| 823 Eighth Street,Huntington, West Virginia                    |   | Owned           |   | 1998                         |   |           | 16,800 |   |                            | $      | 2,922 |   |
|                                                           |   |            |   |                         |   |           |   |   |                            |   |   |   |
| Branch Offices:                                                |   |            |   |                         |   |           |   |   |                            |   |   |   |
|                                                           |   |            |   |                         |   |           |   |   |                            |   |   |   |
| 6501 Mud River Road, Barboursville, West Virginia              |   | Land lease      |   | 2004                         |   |           | 3,200  |   |                            |   | 940 |   |
|                                                           |   |            |   |                         |   |           |   |   |                            |   |   |   |
| 5604 US Route 60 East, Huntington, West Virginia               |   | Leased          |   | 2009                         |   |           | 3,161  |   |                            |   | — |   |
|                                                           |   |            |   |                         |   |           |   |   |                            |   |   |   |
| 5 Second Street, Hamlin, West Virginia                         |   | Land lease      |   | 2009                         |   |           | 1,440  |   |                            |   | 70 |   |
|                                                           |   |            |   |                         |   |           |   |   |                            |   |   |   |
| 517 Ninth Street,Huntington, West Virginia(drive-through only) |   | Leased          |   | 2009                         |   |           | N/A    |   |                            |   | — |   |

| ITEM 3. | Legal Proceedings |
|---------|-------------------|

----

| ITEM 4. | Removed and Reserved |
|---------|----------------------|

| ITEM 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities |
|---------|--------------------------------------------------------------------------------------------------------------------|

|   Fiscal 2010                            |   | High Bid |   |   | Low Bid |    |   | Dividends |   |
|----------------------------------------------------|--------|----------|--------|--------|---------|---------|--------|-----------|--------|
|    Quarter ended December 31, 2010       |   |  $  | 25.00  |   |    |  $ | 24.50  |      |   |  $ | 0.20 |   |
|    Quarter ended September 30, 2010 |   |     | 25.00  |   |    |    | 25.00  |      |   |   | 0.20 |   |
|    Quarter ended June 30, 2010      |   |     | 25.00  |   |    |    | 25.00  |      |   |   | 0.20 |   |
|    Quarter ended March 31, 2010     |   |     | 25.00  |   |    |    | 25.00  |      |   |   | 0.20 |   |

| Fiscal 2009                                        |   | High Bid |   |   | Low Bid |   |   | Dividends |   |
|----------------------------------------------------|--------|----------|--------|--------|---------|--------|--------|-----------|--------|
|    Quarter ended December 31, 2009       |   | $        | 25.00  |   |    | $      | 25.00  |      |   | $ | 0.20 |   |
|    Quarter ended September 30, 2009 |   |     | 25.00  |   |    |   | 25.00  |      |   |   | 0.20 |   |
|    Quarter ended June 30, 2009      |   |     | 25.00  |   |    |   | 25.00  |      |   |   | 0.20 |   |
|    Quarter ended March 31, 2009     |   |     | 25.00  |   |    |   | 25.00  |      |   |   | 0.20 |   |

| ITEM 6. | Selected Financial Data |
|---------|-------------------------|

----

|                                           |   | At December 31, |    |
|------------------------------------------------|--------|-----------------|---------|
|                                           |   | 2010            |    |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                           |   | (In thousands)  |    |
| Selected Financial Condition Data:             |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                                   |   | $               | 490,684 |   |   | $ | 488,500 |   |   | $ | 338,496 |   |   | $ | 269,025 |   |   | $ | 249,762 |   |
| Cash and cash equivalents                      |   |            | 21,120  |   |   |   | 17,943 |   |   |   | 7,534 |   |   |   | 7,129 |   |   |   | 13,937 |   |
| Interest-earning deposits                      |   |            | 12,331  |   |   |   | 5,832 |   |   |   | 18,677 |   |   |   | 2,000 |   |   |   | — |   |
| Trading assets                                 |   |            | — |   |   |   | — |   |   |   | — |   |   |   | 3,996 |   |   |   | — |   |
| Investment securities available for sale       |   |            | 61,548  |   |   |   | 65,801 |   |   |   | 70,659 |   |   |   | 41,346 |   |   |   | 20,948 |   |
| Investment securities held to maturity         |   |            | 23,010  |   |   |   | 16,134 |   |   |   | 9,286 |   |   |   | — |   |   |   | 9,085 |   |
| Federal Home Loan Bank stock, at cost          |   |            | 2,886   |   |   |   | 3,038 |   |   |   | 2,177 |   |   |   | 1,176 |   |   |   | 723 |   |
| Loans, net of allowance                        |   |            | 351,901 |   |   |   | 360,761 |   |   |   | 220,945 |   |   |   | 204,438 |   |   |   | 197,444 |   |
| Deposits                                       |   |            | 398,672 |   |   |   | 389,471 |   |   |   | 265,200 |   |   |   | 214,895 |   |   |   | 209,712 |   |
| Securities sold under agreements to repurchase |   |            | 19,375  |   |   |   | 20,730 |   |   |   | 12,498 |   |   |   | 10,922 |   |   |   | 10,285 |   |
| Federal Home Loan Bank advances                |   |            | 33,721  |   |   |   | 39,891 |   |   |   | 35,560 |   |   |   | 19,221 |   |   |   | 8,721 |   |
| Trust Preferred Securities                     |   |            | 9,000   |   |   |   | 9,000 |   |   |   | 5,000 |   |   |   | 5,000 |   |   |   | 4,000 |   |
| Stockholders’ equity                     |   |            | 29,009  |   |   |   | 28,110 |   |   |   | 18,684 |   |   |   | 17,837 |   |   |   | 16,252 |   |

|                                                |   | Years Ended December 31,                 |   |
|-----------------------------------------------------|--------|------------------------------------------|--------|
|                                                |   | 2010                                     |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |
|                                                |   | (In thousands, except per share amounts) |   |
| Selected Operating Data:                            |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest income                                     |   | $                                        | 23,533 |   |   | $ | 19,684 |   |   | $ | 17,845 |   |   | $ | 17,947 |   |   | $ | 16,380 |   |
| Interest expense                                    |   |                                     | 7,160  |   |   |   | 7,979 |   |   |   | 8,999 |   |   |   | 9,049 |   |   |   | 7,743 |   |
| Net interest income                                 |   |                                     | 16,373 |   |   |   | 11,705 |   |   |   | 8,846 |   |   |   | 8,898 |   |   |   | 8,637 |   |
| Provision for loan losses                           |   |                                     | 5,112  |   |   |   | 3,025 |   |   |   | 1,189 |   |   |   | 1,543 |   |   |   | 1,694 |   |
| Net interest income after provision for loan losses |   |                                     | 11,261 |   |   |   | 8,680 |   |   |   | 7,657 |   |   |   | 7,355 |   |   |   | 6,943 |   |
| Other income                                        |   |                                     | 2,203  |   |   |   | 761 |   |   |   | 735 |   |   |   | 1,121 |   |   |   | 1,084 |   |
| Other expenses                                      |   |                                     | 9,907  |   |   |   | 8,620 |   |   |   | 5,661 |   |   |   | 5,137 |   |   |   | 4,815 |   |
| Income before income tax                            |   |                                     | 3,557  |   |   |   | 821 |   |   |   | 2,731 |   |   |   | 3,339 |   |   |   | 3,212 |   |
| Income tax expense                                  |   |                                     | 1,006  |   |   |   | 93 |   |   |   | 876 |   |   |   | 1,185 |   |   |   | 1,196 |   |
| Net income                                          |   | $                                        | 2,551  |   |   | $ | 728 |   |   | $ | 1,855 |   |   | $ | 2,154 |   |   | $ | 2,016 |   |
| Income per common share                             |   | $                                        | 1.77   |   |   | $ | 0.63 |   |   | $ | 1.76 |   |   | $ | 2.04 |   |   | $ | 1.91 |   |

----

|                                                                   |   | At or For the Years Ended December 31, |
|------------------------------------------------------------------------|--------|----------------------------------------|
|                                                                   |   | 2010                                   |   |   | 2009 |   |   | 2008 |   |   | 2007 |   |   | 2006 |
|                                                                   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selected Financial Ratios and Other Data:                              |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performance Ratios:                                                    |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average assets (ratio of net income to average total assets) |   |                                   | 0.52 | % |   |   | 0.19 | % |   |   | 0.62 | % |   |   | 0.84 | % |   |   | 0.85 | % |
| Return on average equity (ratio of net income to average equity)       |   |                                   | 8.63 | % |   |   | 3.32 | % |   |   | 9.97 | % |   |   | 12.65 | % |   |   | 12.72 | % |
| Dividend payout ratio(1)                                          |   |                                   | 45.08 | % |   |   | 126.51 | % |   |   | 45.55 | % |   |   | 29.42 | % |   |   | 31.43 | % |
| Interest rate spread (2)                                          |   |                                   | 3.34 | % |   |   | 2.85 | % |   |   | 2.52 | % |   |   | 2.87 | % |   |   | 3.12 | % |
| Net interest margin(3)                                            |   |                                   | 3.55 | % |   |   | 3.19 | % |   |   | 3.05 | % |   |   | 3.64 | % |   |   | 3.81 | % |
| Efficiency ratio (4)                                              |   |                                   | 53.33 | % |   |   | 66.48 | % |   |   | 59.09 | % |   |   | 51.27 | % |   |   | 49.53 | % |
| Non-interest expense to average total assets                           |   |                                   | 2.02 | % |   |   | 2.25 | % |   |   | 1.88 | % |   |   | 2.01 | % |   |   | 2.03 | % |
| Average interest-earning assets to averageinterest-bearing liabilities |   |                                   | 113.22 | % |   |   | 115.62 | % |   |   | 117.11 | % |   |   | 120.65 | % |   |   | 120.17 | % |
| Average equity to average total assets                                 |   |                                   | 6.02 | % |   |   | 5.72 | % |   |   | 6.19 | % |   |   | 6.67 | % |   |   | 6.69 | % |
|                                                                   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset Quality Ratios:                                                  |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing assets to total assets                                  |   |                                   | 1.34 | % |   |   | 0.96 | % |   |   | 0.77 | % |   |   | 1.11 | % |   |   | 1.13 | % |
| Non-performing loans to total loans                                    |   |                                   | 1.25 | % |   |   | 0.67 | % |   |   | 0.50 | % |   |   | 0.63 | % |   |   | 1.41 | % |
| Allowance for loan losses to non-performing loans                      |   |                                   | 112.35 | % |   |   | 196.43 | % |   |   | 290.46 | % |   |   | 219.72 | % |   |   | 93.96 | % |
| Allowance for loan losses to total loans                               |   |                                   | 1.40 | % |   |   | 1.31 | % |   |   | 1.44 | % |   |   | 1.38 | % |   |   | 1.33 | % |
|                                                                   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Capital Ratios:                                                        |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total capital (to risk-weighted assets)                                |   |                                   | 11.65 | % |   |   | 10.88 | % |   |   | 11.90 | % |   |   | 12.70 | % |   |   | 12.02 | % |
| Tier I capital (to risk-weighted assets)                               |   |                                   | 10.39 | % |   |   | 9.63 | % |   |   | 10.65 | % |   |   | 11.45 | % |   |   | 10.77 | % |
| Tier I capital (to average assets)                                     |   |                                   | 7.23 | % |   |   | 6.90 | % |   |   | 7.24 | % |   |   | 8.63 | % |   |   | 8.22 | % |
|                                                                   |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Data:                                                            |   |                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Number of full service offices                                         |   |                                   | 4 |   |   |   | 4 |   |   |   | 2 |   |   |   | 2 |   |   |   | 2 |   |
| Full time equivalent employees                                         |   |                                   | 80 |   |   |   | 77 |   |   |   | 54 |   |   |   | 51 |   |   |   | 47 |   |

| (1) | The dividend payout ratio is calculated using dividends declared divided by net income.  |
|-----|-----------------------------------------------------------------------------------------------|

| (2) | The average interest rate spread represents the difference between the weighted-average yield on interest-earning assets and the weighted- average cost of interest-bearing liabilities for the year.  |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The net interest margin represents net interest income as a percent of average interest-earning assets for the year.  |
|-----|----------------------------------------------------------------------------------------------------------------------------|

| (4) | The efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income. |
|-----|-------------------------------------------------------------------------------------------------------------------------|

| ITEM 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

----

----

| ·   | Maintaining a community focus. Our management and Board of Directors have strong ties to the Huntington and Barboursville, West Virginia communities.  Many members of the management team are Huntington natives and are active in the community through non-profit board membership, local business development organizations, and industry associations.  In addition, our Board members are well established professionals and respected business people in the Huntington area and throughout West Virginia.  Management and the Board are interested in making a lasting contribution to the Huntington community and have succeeded in attracting deposits and loans through attentive and personalized service. To better serve our customers, we have also expanded our products and services by introducing such products as internet and telephone banking, ATM debit cards and CDARS (a type of brokered certificate of deposit that allows a bank to gather large local certificates of deposit that may exceed Federal Deposit Insurance Corporation insurance limits and trade portions of such certificates of deposit with other network members to lower such balances to below Federal Deposit Insurance Corporation insurance limits). On September 25, 2009, in connection with the merger of Guaranty Financial Services, Inc., we acquired a full service branch in Hamlin, West Virginia, located in Lincoln County.  We continue to operate at this location as we look to increase our customer base in Lincoln County. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | Continuing our Focus on Commercial Real Estate Lending and Commercial Lending.  We intend to continue to increase our origination of higher-yielding commercial real estate loans and commercial loans.  These loans generally are originated with adjustable interest rates and/or shorter terms, which assists us in managing our interest rate risk.  To support this initiative, we have built an infrastructure of seasoned lenders, business developers and underwriters.  We originated $44.4 million of commercial real estate loans and $45.2 million of commercial loans during the year ended December 31, 2010.  At December 31, 2010, our commercial real estate loans totaled $173.9 million, or 48.7% of total loans, compared to $170.5 million, or 46.6% of total loans at December 31, 2009, and $107.5 million, or 47.9% of total loans at December 31, 2008.  Our commercial loans totaled $107.4 million, or 30.1% at December 31, 2010, and $116.0 million, or 31.7% and $68.1 million, or 30.4% at December 31, 2009 and 2008, respectively. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Maintaining High Asset Quality.  We have emphasized maintaining strong asset quality by following conservative underwriting guidelines, and originating a substantial amount of our loans secured by real estate.  We will continue to emphasize high quality assets as we continue to strive to meet the credit needs of the communities we serve. Our non-performing assets at December 31, 2010 were $6.6 million, or 1.34% of total assets, compared to $4.7 million or 0.96% of total assets at December 31, 2009, and $2.6 million or 0.77% of total assets at December 31, 2008. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Controlling and Managing Operating Expenses. We intend to continue to manage our operating expenses to maximize our growth in a challenging financial market. Historically, we have maintained a low efficiency ratio as compared to our peers. An efficiency ratio represents non-interest expense divided by the sum of net interest income and non-interest income. For the year ended December 31, 2010, our efficiency ratio was 53.33% and for the years ended December 31, 2009 and 2008, our efficiency ratio was 66.48% and 59.09%, respectively.  This means, for example, that we had to spend approximately $0.53 in order to generate $1.00 of income during the year ended December 31, 2010. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                                                                                                                                                                                                |   |                             |                                    |   |    |         |   |        |      |   |   |                        |   |   |   |         |   |   |        |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|-----------------------------------------|--------|---------|--------------|--------|-------------|-----------|--------|--------|-----------------------------|--------|--------|--------|--------------|--------|--------|-------------|--------|
|                                                                                                                                                                                                                |   | For the Years Ended December 31, |                                    |
|                                                                                                                                                                                                                |   | 2010                             |                                    |   | 2009    |         |   | 2008        |      |
|                                                                                                                                                                                                                |   |                             | Average Outstanding Balance   |   |    | Interest     |   | Yield/ Rate |      |   |   | Average Outstanding Balance |   |   |   | Interest     |   |   | Yield/ Rate |   |   |   | Average Outstanding Balance |   |   |   | Interest |   |   | Yield/ Rate |   |   |
|                                                                                                                                                                                                                |   | (Dollars in thousands)           |                                    |
| Interest-earning assets:                                                                                                                                                                                            |   |                             |                                    |   |    |         |   |        |      |   |   |                        |   |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                               |   | $                                | 362,096                                 |   | $       | 20,434       |   | 5.64        | %         |   | $      | 267,281                     |   |   | $      | 15,788       |   |   | 5.91        | %      |   | $ | 212,553 |   |   | $ | 14,387 |   |   | 6.77 | % |   |
| Investment securities                                                                                                                                                                                               |   |                             | 82,720                                  |   |    | 2,959        |   | 3.58        |  (1) |   |   | 83,054                      |   |   |   | 3,404        |   |   | 4.10        | (1)    |   |   | 58,966 |   |   |   | 2,799 |   |   | 4.75 | (1) |   |
| Cash and cash equivalents                                                                                                                                                                                           |   |                             | 13,302                                  |   |    | 140          |   | 1.05        |      |   |   | 14,363                      |   |   |   | 492          |   |   | 3.43        |   |   |   | 16,500 |   |   |   | 609 |   |   | 3.69 |   |   |
| Federal Home Loan Bank stock                                                                                                                                                                                        |   |                             | 3,011                                   |   |    | —      |   | —     |      |   |   | 2,423                       |   |   |   | —      |   |   | —     |   |   |   | 1,651 |   |   |   | 47 |   |   | 2.85 |   |   |
| Trading assets                                      |   |                             | —                                 |   |    | —      |   | —     |      |   |   | —                     |   |   |   | —      |   |   | —     |   |   |   | 76 |   |   |   | 2 |   |   | 2.63 |   |   |
| Total interest-earning assets                                                                                                                                                                                       |   |                             | 461,129                                 |   |    | 23,533       |   | 5.10        |      |   |   | 367,121                     |   |   |   | 19,684       |   |   | 5.36        |   |   |   | 289,746 |   |   |   | 17,844 |   |   | 6.16 |   |   |
| Non-interest-earning assets                                                                                                                                                                                         |   |                             | 30,289                                  |   |    |         |   |        |      |   |   | 15,448                      |   |   |   |         |   |   |        |   |   |   | 10,934 |   |   |   |   |   |   |   |   |   |
| Total assets                                                  |   | $                                | 491,418                                 |   |    |         |   |        |      |   | $      | 382,569                     |   |   |   |         |   |   |        |   |   | $ | 300,680 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                |   |                             |                                    |   |    |         |   |        |      |   |   |                        |   |   |   |         |   |   |        |   |   |   | 0 |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                                                                                                       |   |                             |                                    |   |    |         |   |        |      |   |   |                        |   |   |   |         |   |   |        |   |   |   | 0 |   |   |   |   |   |   |   |   |   |
| Savings accounts                                    |   | $                                | 19,334                                  |   |    | 35           |   | 0.18        |      |   | $      | 14,037                      |   |   |   | 28           |   |   | 0.20        |   |   | $ | 9,623 |   |   |   | 40 |   |   | 0.42 |   |   |
| Certificates of deposit                                                                                                                                                                                             |   |                             | 222,753                                 |   |    | 5,354        |   | 2.40        |      |   |   | 171,847                     |   |   |   | 5,948        |   |   | 3.46        |   |   |   | 130,090 |   |   |   | 6,127 |   |   | 4.71 |   |   |
| Money market                                        |   |                             | 59,489                                  |   |    | 267          |   | 0.45        |      |   |   | 33,521                      |   |   |   | 167          |   |   | 0.50        |   |   |   | 30,646 |   |   |   | 556 |   |   | 1.81 |   |   |
| NOW                                                 |   |                             | 48,877                                  |   |    | 169          |   | 0.35        |      |   |   | 40,139                      |   |   |   | 119          |   |   | 0.30        |   |   |   | 30,476 |   |   |   | 474 |   |   | 1.56 |   |   |
| Total interest-bearing deposits                                                                                                                                                                                     |   |                             | 350,453                                 |   |    | 5,825        |   | 1.66        |      |   |   | 259,544                     |   |   |   | 6,262        |   |   | 2.41        |   |   |   | 200,835 |   |   |   | 7,197 |   |   | 3.58 |   |   |
| Federal Home Loan Bank advances                                                                                                                                                                                     |   |                             | 28,647                                  |   |    | 699          |   | 2.44        |      |   |   | 37,247                      |   |   |   | 1,136        |   |   | 3.05        |   |   |   | 29,970 |   |   |   | 1,070 |   |   | 3.57 |   |   |
| Securities sold under agreements to repurchase                                                                                                                                                                      |   |                             | 19,191                                  |   |    | 397          |   | 2.07        |      |   |   | 14,667                      |   |   |   | 417          |   |   | 2.84        |   |   |   | 11,604 |   |   |   | 488 |   |   | 4.21 |   |   |
| Trust preferred securities                                                                                                                                                                                          |   |                             | 9,000                                   |   |    | 239          |   | 2.66        |      |   |   | 6,074                       |   |   |   | 164          |   |   | 2.70        |   |   |   | 5,000 |   |   |   | 244 |   |   | 4.88 |   |   |
| Total interest-bearing liabilities                                                                                                                                                                                  |   |                             | 407,291                                 |   |    | 7,160        |   | 1.76        |      |   |   | 317,532                     |   |   |   | 7,979        |   |   | 2.51        |   |   |   | 247,409 |   |   |   | 8,999 |   |   | 3.64 |   |   |
| Non-interest-bearing checking                                                                                                                                                                                       |   |                             | 53,195                                  |   |    |         |   |        |      |   |   | 41,839                      |   |   |   |         |   |   |        |   |   |   | 33,751 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities                                                                                                                                                                              |   |                             | 1,363                                   |   |    |         |   |        |      |   |   | 1,301                       |   |   |   |         |   |   |        |   |   |   | 906 |   |   |   |   |   |   |   |   |   |
| Total liabilities                                             |   |                             | 461,849                                 |   |    |         |   |        |      |   |   | 360,672                     |   |   |   |         |   |   |        |   |   |   | 282,066 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                                                                                                                                                                                          |   |                             | 29,569                                  |   |    |         |   |        |      |   |   | 21,897                      |   |   |   |         |   |   |        |   |   |   | 18,614 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders’ equity                                                                                                                                                                    |   | $                                | 491,418                                 |   |    |         |   |        |      |   | $      | 382,569                     |   |   |   |         |   |   |        |   |   | $ | 300,680 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                |   |                             |                                    |   |    |         |   |        |      |   |   |                        |   |   |   |         |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                 |   |                             |                                    |   |  $ | 16,373  |   |        |      |   |   |                        |   |   | $      | 11,705  |   |   |        |   |   |   |   |   |   | $ | 8,845  |   |   |   |   |   |
| Net interest rate spread (2)                                                                                                                                                                                        |   |                             |                                    |   |    |         |   | 3.34   | %         |   |   |                        |   |   |   |         |   |   | 2.85        | %      |   |   |   |   |   |   |   |   |   | 2.52 | % |   |
| Net interest-earning assets (3)                                                                                                                                                                                     |   | $                                | 53,838                                  |   |    |         |   |        |      |   | $      | 49,589                      |   |   |   |         |   |   |        |   |   | $ | 42,337 |   |   |   |   |   |   |   |   |   |
| Net interest margin (4)                                                                                                                                                                                             |   |                             |                                    |   |    |         |   | 3.55   | %         |   |   |                        |   |   |   |         |   |   | 3.19        | %      |   |   |   |   |   |   |   |   |   | 3.05  | % |   |
| Average interest-earning assets to interest-bearing liabilities                                                                                                                                                     |   |                             | 113,22                                  | %      |    |         |   |        |      |   |   | 115.62                 | %      |   |   |         |   |   |        |   |   |   |   |   |   |   | 117.11 | % |   |   |   |   |

| (1)   | The tax equivalent yield of the investment securities portfolio was 4.86%, 5.40% and 5.05% for the years ended December 31, 2010, 2009 and 2008, respectively. |
|-----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)   | Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3)   | Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. |
|-----------------|---------------------------------------------------------------------------------------------------------------|

| (4)   | Net interest margin represents net interest income divided by average total interest-earning assets. |
|-----------------|------------------------------------------------------------------------------------------------------|

----

|                                                                                                                                                                                                                       |   | Years Ended December 31,2010 vs. 2009 |    |   | Years Ended December 31,2009 vs. 2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------|--------|---------------------------------------|--------|
|                                                                                                                                                                                                                       |   | Increase (Decrease) Due to            |    |   | TotalIncrease                         |   |   | Increase (Decrease)Due to |   |   | Total Increase |   |
|                                                                                                                                                                                                                       |   | Volume                                |    |   | Rate                                  |   |   | (Decrease) |   |   | Volume |   |   | Rate |   |   | (Decrease) |   |
|                                                                                                                                                                                                                       |   | (In thousands)                        |    |
| Interest-earning assets:                                                                                                                                                                                                   |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                                                                                                                                                                                                      |   | $                                     | 5,362   |   |                                  | $      | (716 | ) |   | $ | 4,646 |   |   | $ | 3,229 |   |   | $ | (1,828 | )  |   | $ | 1,401 |   |
| Investment securities                                                                                                                                                                                                      |   |                                  | (12     |   |                                  |   | (433 | ) |   |   | (445 | ) |   |   | 988 |   |   |   | (383 | ) |   |   | 605 |   |
| Cash and cash equivalents                                                                                                                                                                                                  |   |                                  | (11     |   |                                  |   | (341 | ) |   |   | (352 | ) |   |   | (74 | ) |   |   | (43 | ) |   |   | (117 | ) |
| Federal Home Loan Bank stock                                                                                                                                                                                               |   |                                  | — |   |                                  |   | — |   |   |   | — |   |   |   | — |   |   |   | (47 | ) |   |   | (47 | ) |
| Trading assets                                   |   |                                  | — |   |                                  |   | — |   |   |   | — |   |   |   | — |   |   |   | (2 | ) |   |   | (2 | ) |
|                                                                                                                                                                                                                       |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-earning assets                                                                                                                                                                                              |   |                                  | 5,339   |   |                                  |   | (1,490 | ) |   |   | 3,849 |   |   |   | 4,143 |   |   |   | (2,303 | ) |   |   | 1,840 |   |
|                                                                                                                                                                                                                       |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:                                                                                                                                                                                              |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Savings accounts                                           |   |                                  | 10      |   |                                  |   | (3 | ) |   |   | 7 |   |   |   | 9 |   |   |   | (21 | ) |   |   | (12 | ) |
| Certificates of deposit                                                                                                                                                                                                    |   |                                  | 1,224   |   |                                  |   | (1,818 | ) |   |   | (594 | ) |   |   | 1,445 |   |   |   | (1,624 | ) |   |   | (179 | ) |
| Money market                                               |   |                                  | 117     |   |                                  |   | (17 | ) |   |   | 100 |   |   |   | 14 |   |   |   | (403 | ) |   |   | (389 | ) |
|  NOW                                                  |   |                                  | 30      |   |                                  |   | 20 |   |   |   | 50 |   |   |   | 29 |   |   |   | (384 | ) |   |   | (355 | ) |
| Total deposits                                                            |   |                                  | 1,381   |   |                                  |   | (1,818 | ) |   |   | (437 | ) |   |   | 1,497 |   |   |   | (2,432 | ) |   |   | (935 | ) |
| Federal Home Loan Bank advances                                                                                                                                                                                            |   |                                  | (210    |   |                                  |   | (227 | ) |   |   | (437 | ) |   |   | 222 |   |   |   | (156 | ) |   |   | 66 |   |
| Securities sold under agreement to repurchase                                                                                                                                                                              |   |                                  | 94      |   |                                  |   | (114 | ) |   |   | (20 | ) |   |   | 87 |   |   |   | (158 | ) |   |   | (71 | ) |
| Trust preferred securities                                                                                                                                                                                                 |   |                                  | 77      |   |                                  |   | (2 | ) |   |   | 75 |   |   |   | 29 |   |   |   | (109 | ) |   |   | (80 | ) |
|                                                                                                                                                                                                                       |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities                                                                                                                                                                                         |   |                                  | 1,342   |   |                                  |   | (2,161 | ) |   |   | (819 | ) |   |   | 1,835 |   |   |   | (2,855 | ) |   |   | (1,020 | ) |
|                                                                                                                                                                                                                       |   |                                  |    |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Change in net interest income                                                                                                                                                                                              |   | $                                     | 3,997   |   |                                  | $      | 671 |   |   | $ | 4,668 |   |   | $ | 2,308 |   |   | $ | 552 |   |   | $ | 2,860 |   |

----

----

----

----

| ITEM 7A. | Quantitative and Qualitative Disclosures About Market Risk |
|----------|------------------------------------------------------------|

----

| ITEM 8. | Financial Statements and Supplementary Data |
|---------|---------------------------------------------|

----

|                                                               |   | 2010   |        |   | 2009   |   |
|--------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| ASSETS                                                             |   |   |        |   |   |   |
| Cash and due from banks                                            |   | $      | 16,700,486  |   |   | $      | 17,942,673 |   |
| Federal funds sold                                                 |   |   | 4,420,000   |   |   |   | - |   |
| Cash and cash equivalents                                          |   |   | 21,120,486  |   |   |   | 17,942,673 |   |
|                                                               |   |   |        |   |   |   |   |   |
| Interest-earning deposits                                          |   |   | 12,331,000  |   |   |   | 5,832,000 |   |
| Investments available-for-sale                                     |   |   | 61,548,052  |   |   |   | 65,801,101 |   |
| Investments held-to-maturity (fair value approximates $22,785,603  |   |   |        |   |   |
| and $16,370,083 at December 31, 2010 and 2009, respectively)       |   |   | 23,010,026  |   |   |   | 16,134,092 |   |
| Federal Home Loan Bank stock, at cost                              |   |   | 2,885,900   |   |   |   | 3,037,800 |   |
|                                                               |   |   |        |   |   |   |   |   |
| Total loans                                                        |   |   | 356,905,826 |   |   |   | 365,546,355 |   |
| Allowance for loan losses                                          |   |   | (5,005,000  | )      |   |   | (4,785,000 | ) |
| Net loans                                                          |   |   | 351,900,826 |   |   |   | 360,761,355 |   |
| Interest receivable                                                |   |   | 1,964,514   |   |   |   | 2,152,315 |   |
| Bank premises and equipment, net                                   |   |   | 6,695,002   |   |   |   | 6,928,684 |   |
| Other assets                                                       |   |   | 9,228,511   |   |   |   | 9,910,296 |   |
|                                                               |   |   |        |   |   |   |   |   |
|                                                               |   | $      | 490,684,317 |   |   | $      | 488,500,316 |   |
|                                                               |   |   |        |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                               |   |   |        |   |   |   |   |   |
| LIABILITIES                                                        |   |   |        |   |   |   |   |   |
| Deposits:                                                          |   |   |        |   |   |   |   |   |
| Noninterest-bearing                                                |   | $      | 56,661,811  |   |   | $      | 59,073,303 |   |
| Interest-bearing                                                   |   |   | 342,009,960 |   |   |   | 330,397,695 |   |
| Total deposits                                                     |   |   | 398,671,771 |   |   |   | 389,470,998 |   |
| Securities sold under agreements to repurchase                     |   |   | 19,374,521  |   |   |   | 20,729,501 |   |
| Federal Home Loan Bank advances                                    |   |   | 33,720,577  |   |   |   | 39,890,597 |   |
| Interest payable                                                   |   |   | 506,336     |   |   |   | 589,772 |   |
| Other liabilities                                                  |   |   | 402,053     |   |   |   | 709,831 |   |
|                                                               |   |   | 452,675,258 |   |   |   | 451,390,699 |   |
|                                                               |   |   |        |   |   |   |   |   |
| TRUST PREFERRED SECURITIES                                         |   |   | 9,000,000   |   |   |   | 9,000,000 |   |
|                                                               |   |   |        |   |   |   |   |   |
| STOCKHOLDERS' EQUITY                                               |   |   |        |   |   |   |   |   |
| Common stock, $1 par value, 5,280,000 shares authorized, 1,437,651 |   |   |        |   |   |
| issued and outstanding at December 31, 2010 and 2009               |   |   | 1,437,651   |   |   |   | 1,437,651 |   |
| Additional paid-in capital                                         |   |   | 15,293,748  |   |   |   | 15,293,748 |   |
| Retained earnings                                                  |   |   | 12,658,288  |   |   |   | 11,257,159 |   |
| Accumulated other comprehensive income (loss)                      |   |   | (380,628    | )      |   |   | 121,059 |   |
|                                                               |   |   | 29,009,059  |   |   |   | 28,109,617 |   |
|                                                               |   |   |        |   |   |   |   |   |
|                                                               |   | $      | 490,684,317 |   |   | $      | 488,500,316 |   |
| See Notes to Consolidated Financial Statements                     |   |   |        |   |   |   |   |   |
|                                                               |   |   |        |   |   |   |   |   |

----

|                                             |   | 2010   |       |   | 2009   |   |
|--------------------------------------------------|--------|--------|------------|--------|--------|--------|
| INTEREST INCOME                                  |   |   |       |   |   |   |
| Loans, including fees                            |   | $      | 20,433,823 |   |   | $      | 15,788,146 |   |
| Investment securities                            |   |   | 2,959,300  |   |   |   | 3,403,930 |   |
| Federal funds sold and interest-earning deposits |   |   | 140,015    |   |   |   | 491,925 |   |
|                                             |   |   | 23,533,138 |   |   |   | 19,684,001 |   |
| INTEREST EXPENSE                                 |   |   |       |   |   |   |   |   |
| Deposits                                         |   |   | 5,824,255  |   |   |   | 6,262,085 |   |
| Securities sold under agreements to repurchase   |   |   | 397,593    |   |   |   | 416,781 |   |
| Trust preferred securities                       |   |   | 239,040    |   |   |   | 164,167 |   |
| Advances                                         |   |   | 698,789    |   |   |   | 1,136,336 |   |
|                                             |   |   | 7,159,677  |   |   |   | 7,979,369 |   |
|                                             |   |   |       |   |   |   |   |   |
| NET INTEREST INCOME                              |   |   | 16,373,461 |   |   |   | 11,704,632 |   |
|                                             |   |   |       |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                        |   |   | 5,112,101  |   |   |   | 3,025,098 |   |
|                                             |   |   |       |   |   |   |   |   |
| NET INTEREST INCOME AFTER                        |   |   |       |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                        |   |   | 11,261,360 |   |   |   | 8,679,534 |   |
|                                             |   |   |       |   |   |   |   |   |
| OTHER INCOME                                     |   |   |       |   |   |   |   |   |
| Service fees                                     |   |   | 83,752     |   |   |   | 69,263 |   |
| Securities gains (losses)                        |   |   | 643,510    |   |   |   | (2,997 | ) |
| Impairment losses on held-to-maturity securities |   |   | -          |   |   |   | (500,000 | ) |
| Other charges, commissions and fees              |   |   | 1,475,772  |   |   |   | 1,194,916 |   |
|                                             |   |   | 2,203,034  |   |   |   | 761,182 |   |
| OTHER EXPENSES                                   |   |   |       |   |   |   |   |   |
| Salaries and employee benefits                   |   |   | 4,109,524  |   |   |   | 3,120,343 |   |
| Equipment and occupancy expenses                 |   |   | 1,367,561  |   |   |   | 1,102,189 |   |
| Data processing                                  |   |   | 394,962    |   |   |   | 278,713 |   |
| Professional fees                                |   |   | 790,320    |   |   |   | 896,955 |   |
| Taxes, other than payroll, property and income   |   |   | 272,615    |   |   |   | 215,602 |   |
| Insurance                                        |   |   | 787,645    |   |   |   | 747,676 |   |
| Other expenses                                   |   |   | 2,184,316  |   |   |   | 2,258,293 |   |
|                                             |   |   | 9,906,943  |   |   |   | 8,619,771 |   |
|                                             |   |   |       |   |   |   |   |   |
| INCOME BEFORE INCOME TAX                         |   |   | 3,557,451  |   |   |   | 820,945 |   |
|                                             |   |   |       |   |   |   |   |   |
| INCOME TAX EXPENSE                               |   |   | 1,006,203  |   |   |   | 93,195 |   |
|                                             |   |   |       |   |   |   |   |   |
| NET INCOME                                       |   | $      | 2,551,248  |   |   | $      | 727,750 |   |
|                                             |   |   |       |   |   |   |   |   |
| EARNINGS PER SHARE                               |   | $      | 1.77       |   |   | $      | 0.63 |   |
|                                             |   |   |       |   |   |   |   |   |
| See Notes to Consolidated Financial Statements   |   |   |       |   |   |   |   |   |

----

|                                                                                   |   | 2010   |      |   | 2009   |   |
|----------------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                                   |   |   |      |   |   |   |
| NET INCOME                                                                             |   | $      | 2,551,248 |   |   | $      | 727,750 |   |
|                                                                                   |   |   |      |   |   |   |   |   |
| Other comprehensive income:                                                            |   |   |      |   |   |   |   |   |
| Unrealized gains (losses) on securities:                                               |   |   |      |   |   |   |   |   |
| Unrealized holding gains (losses) arising during the period                            |   |   | (803,205  | )      |   |   | 49,778 |   |
| Less:  reclassification adjustment for (gains) losses included in net income |   |   | (643,510  | )      |   |   | 2,997 |   |
|                                                                                   |   |   |      |   |   |   |   |   |
|                                                                                   |   |   | (159,695  | )      |   |   | 52,775 |   |
| Cumulative-effect adjustment to apply                                                  |   |   |      |   |   |   |   |   |
| GAAP for transfer of securities fromavailable-for-sale to held-to-maturity             |   |   | (1,561    | )      |   |   | 51,003 |   |
|                                                                                   |   |   |      |   |   |   |   |   |
| Adjustment for income tax expense                                                      |   |   | (340,431  | )      |   |   | (15,801 | ) |
|                                                                                   |   |   |      |   |   |   |   |   |
| Other comprehensive income (loss), net of tax                                          |   |   | (501,687  | )      |   |   | 87,977 |   |
|                                                                                   |   |   |      |   |   |   |   |   |
| COMPREHENSIVE INCOME                                                                   |   | $      | 2,049,561 |   |   | $      | 815,727 |   |
|                                                                                   |   |   |      |   |   |   |   |   |
| See Notes to Consolidated Financial Statements                                         |   |   |      |   |   |   |   |   |

----

|                                           |   |   |      |   |       |   |       |     |   |   | Accumulated   |   |   |          |     |
|------------------------------------------------|--------|--------|-----------|--------|------------|--------|------------|----------|--------|--------|---------------|--------|--------|---------------|----------|
|                                           |   |   |      |   | Additional |   |       |     |   |   | Other         |   |   | Total         |     |
|                                           |   | Common |      |   | Paid-in    |   |       | Retained |   |   | Comprehensive |   |   | Stockholders' |     |
|                                           |   | Stock  |      |   | Capital    |   |       | Earnings |   |   | Income (Loss) |   |   | Equity        |     |
|                                           |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |
| BALANCE, December 31, 2008                     |   | $      | 1,056,000 |   |       | $      | 6,144,000  |     |   | $      | 11,450,539    |   |   | $             | 33,082   |   |   | $ | 18,683,621 |   |
|                                           |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |
| Net income                                     |   |   | -         |   |       |   | -          |     |   |   | 727,750       |   |   |          | -        |   |   |   | 727,750 |   |
| Change in unrealized gain on securities        |   |   | -         |   |       |   | -          |     |   |   | -             |   |   |          | 36,974   |   |   |   | 36,974 |   |
| Amortization under GAAP for transferred        |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |
| securities to held-to-maturity                 |   |   | -         |   |       |   | -          |     |   |   | -             |   |   |          | 51,003   |   |   |   | 51,003 |   |
| Issuance of 381,651 shares common stock        |   |   | 381,651   |   |       |   | 9,149,748  |     |   |   | -             |   |   |          | -        |   |   |   | 9,531,399 |   |
| Dividends, $0.80 per share                     |   |   | -         |   |       |   | -          |     |   |   | (921,130      | )      |   |          | -        |   |   |   | (921,130 | ) |
|                                           |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |
| BALANCE, December 31, 2009                     |   |   | 1,437,651 |   |       |   | 15,293,748 |     |   |   | 11,257,159    |   |   |          | 121,059  |   |   |   | 28,109,617 |   |
|                                           |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |
| Net income                                     |   |   | -         |   |       |   | -          |     |   |   | 2,551,248     |   |   |          | -        |   |   |   | 2,551,248 |   |
| Change in unrealized loss on securities        |   |   | -         |   |       |   | -          |     |   |   | -             |   |   |          | (500,126 | ) |   |   | (500,126 | ) |
| Change in unrealized loss on securities        |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |
| transferred from available-for-sale to         |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |
| held-to-maturity                               |   |   | -         |   |       |   | -          |     |   |   | -             |   |   |          | (54,259  | ) |   |   | (54,259 | ) |
| Amortization under GAAP for transferred        |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |
| securities held-to-maturity                    |   |   | -         |   |       |   | -          |     |   |   | -             |   |   |          | 52,698   |   |   |   | 52,698 |   |
| Dividends, $0.80 per share                     |   |   | -         |   |       |   | -          |     |   |   | (1,150,119    | )      |   |          | -        |   |   |   | (1,150,119 | ) |
|                                           |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |
| BALANCE, December 31, 2010                     |   | $      | 1,437,651 |   |       | $      | 15,293,748 |     |   | $      | 12,658,288    |   |   | $             | (380,628 | ) |   | $ | 29,009,059 |   |
|                                           |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |
| See Notes to Consolidated Financial Statements |   |   |      |   |       |   |       |     |   |   |          |   |   |          |     |   |   |   |   |   |

----

|                                                                             |   | 2010   |        |   | 2009   |   |
|----------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| CASH FLOWS FROM OPERATING ACTIVITIES                                             |   |   |        |   |   |   |
| Net income                                                                       |   | $      | 2,551,248   |   |   | $      | 727,750 |   |
| Adjustments to reconcile net income to net cashprovided by operating activities: |   |   |        |   |   |   |   |   |
| Provision for loan losses                                                        |   |   | 5,112,101   |   |   |   | 3,025,098 |   |
| Depreciation and amortization                                                    |   |   | 573,576     |   |   |   | 394,475 |   |
| Subsequent write-downs on other real estate                                      |   |   | 204,779     |   |   |   | 752,704 |   |
| Investment securities amortization net of accretion                              |   |   | 483,494     |   |   |   | 591,278 |   |
| Amortization of core deposit intangible                                          |   |   | 34,867      |   |   |   | 8,717 |   |
| Securities and trading asset losses (gains)                                      |   |   | (643,510    | )      |   |   | 2,997 |   |
| Impairment loss on held-to-maturity securities                                   |   |   | -           |   |   |   | 500,000 |   |
| Loss on sale of assets                                                           |   |   | 40,751      |   |   |   | - |   |
| Deferred income taxes                                                            |   |   | 630,446     |   |   |   | (593,405 | ) |
| Changes in:                                                                      |   |   |        |   |   |   |   |   |
|    Interest receivable                                            |   |   | 187,801     |   |   |   | 39,738 |   |
|    Other assets                                                   |   |   | (64,728     | )      |   |   | (2,675,403 | ) |
|    Interest payable                                               |   |   | (83,436     | )      |   |   | (620,836 | ) |
|    Income taxes payable                                           |   |   | -           |   |   |   | (10,762 | ) |
|    Other liabilities                                              |   |   | (307,778    | )      |   |   | 291,875 |   |
| NET CASH PROVIDED BY OPERATING ACTIVITIES                                        |   |   | 8,719,611   |   |   |   | 2,434,226 |   |
|                                                                             |   |   |        |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                             |   |   |        |   |   |   |   |   |
| Net (increase) decrease in interest-earning deposits                             |   |   | (6,499,000  | )      |   |   | 12,845,000 |   |
| Maturities of investments available-for-sale                                     |   |   | 945,000     |   |   |   | 1,765,000 |   |
| Redemptions of investments available-for-sale                                    |   |   | 66,594,214  |   |   |   | 60,125,054 |   |
| Maturities of investments held-to-maturity                                       |   |   | 760,000     |   |   |   | 1,129,700 |   |
| Redemptions of investments held-to-maturity                                      |   |   | 362,888     |   |   |   | 100,000 |   |
| Purchase of investments available-for-sale                                       |   |   | (63,652,014 | )      |   |   | (39,567,131 | ) |
| Purchase of investments held-to-maturity                                         |   |   | (8,068,974  | )      |   |   | (870,000 | ) |
| Purchase (sale) of Federal Home Loan Bank Stock                                  |   |   | 151,900     |   |   |   | (52,100 | ) |
| Net (increase) decrease in loans                                                 |   |   | 3,418,428   |   |   |   | (35,370,138 | ) |
| Proceeds from sale of foreclosed properties                                      |   |   | 260,000     |   |   |   | - |   |
| Purchases of premises and equipment                                              |   |   | (339,894    | )      |   |   | (625,784 | ) |
| NET CASH USED IN INVESTING ACTIVITIES                                            |   |   | (6,067,452  | )      |   |   | (520,399 | ) |
|                                                                             |   |   |        |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                             |   |   |        |   |   |   |   |   |
| Net increase in deposits                                                         |   |   | 9,200,773   |   |   |   | 10,822,761 |   |
| Net change in agreements to repurchase securities                                |   |   | (1,354,980  | )      |   |   | (2,724,837 | ) |
| Net change in FHLB advances                                                      |   |   | (6,170,020  | )      |   |   | (8,339,349 | ) |
| Net decrease in federal funds purchased                                          |   |   | -           |   |   |   | (518,000 | ) |
| Cash dividends paid                                                              |   |   | (1,150,119  | )      |   |   | (921,130 | ) |
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES                              |   |   | 525,654     |   |   |   | (1,680,555 | ) |
|                                                                             |   |   |        |   |   |   |   |   |
| NET CHANGE IN CASH AND CASH EQUIVALENTS                                          |   |   | 3,177,813   |   |   |   | 233,272 |   |
|                                                                             |   |   |        |   |   |   |   |   |
| CASH ACQUIRED IN MERGER                                                          |   |   | -           |   |   |   | 10,175,218 |   |
| CASH AND CASH EQUIVALENTS, BEGINNING                                             |   |   | 17,942,673  |   |   |   | 7,534,183 |   |
|                                                                             |   |   |        |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, ENDING                                                |   | $      | 21,120,486  |   |   | $      | 17,942,673 |   |
|                                                                             |   |   |        |   |   |   |   |   |
|                                                                             |   |   |        |   |   |   |   |   |
| See Notes to Consolidated Financial Statements                                   |   |   |        |   |   |   |   |   |

----

|                                              |   |   |      |   |   |   |
|---------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                              |   | 2010   |      |   | 2009   |   |
|                                              |   |   |      |   |   |   |
| SUPPLEMENTAL DISCLOSURES                          |   |   |      |   |   |   |
|                                              |   |   |      |   |   |   |
| Cash paid for interest on deposits and borrowings |   | $      | 7,243,113 |   |   | $      | 8,096,863 |   |
| Cash paid for income taxes                        |   |   | 1,144,303 |   |   |   | 641,900 |   |
|                                              |   |   |      |   |   |   |   |   |
|                                              |   |   |      |   |   |   |   |   |
| SUPPLEMENTAL SCHEDULE OF NONCASH                  |   |   |      |   |   |   |   |   |
| INVESTING ACTIVITIES                              |   |   |      |   |   |   |   |   |
|                                              |   |   |      |   |   |   |   |   |
| Loans transferred to foreclosed real estate       |   | $      | 330,000   |   |   | $      | 1,530,746 |   |
| Business acquisitions:                            |   |   |      |   |   |   |   |   |
| Assets acquired at fair value                     |   |   | -         |   |   |   | 149,501,288 |   |
| Liabilities acquired at fair value                |   |   | -         |   |   |   | 141,676,971 |   |
| Common stock issued                               |   |   | -         |   |   |   | 381,651 |   |

----

----

----

----

----

----

| Level 1 | Valuation is based upon quoted prices in active markets for identical instruments traded in active markets.                                                                                                                                                                                                                                                                                                  |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Level 2 | Valuation is based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques for which all significant assumptions are observable in the market.                                                                                                                                 |
| Level 3 | Valuation is generated from model-based techniques that use at least one significant assumption not observable in the market.  These unobservable assumptions reflect estimates of assumptions that market participants would use in pricing the asset or liability.  Valuation techniques include the use of option pricing models, discounted cash flow models and similar techniques. |

----

|                                                                                       |   |    |       |   | Fair Value Measurements at Reporting Date Using: |   |
|--------------------------------------------------------------------------------------------|--------|---------|------------|--------|--------------------------------------------------|--------|
|                                                                                       |   |    |       |   | Quoted Prices                                    |   |   | Significant |   |   |   |   |
|                                                                                       |   |    |       |   | Active Markets                                   |   |   | Other |   |   | Significant |   |
|                                                                                       |   |    |       |   | for Identical                                    |   |   | Observable |   |   | Unobservable |   |
|                                                                                       |   |    |       |   | Assets                                           |   |   | Inputs |   |   | Inputs |   |
|                                                                                       |   | Balance |       |   | (Level 1)                                        |   |   | (Level 2) |   |   | (Level 3) |   |
| December 31, 2010:                                                                         |   |    |       |   |                                             |   |   |   |   |   |   |   |
|      Assets:                                                      |   |    |       |   |                                             |   |   |   |   |   |   |   |
|          Investment securities:               |   |    |       |   |                                             |   |   |   |   |   |   |   |
|             Available-for-sale |   | $       | 61,548,052 |   |                                             | $      | - |   |   | $ | 61,548,052 |   |   | $ | - |   |
|                                                                                       |   |    |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                                                                         |   |    |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
|      Assets:                                                      |   |    |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
|          Investment securities:               |   |    |       |   |                                             |   |   |   |   |   |   |   |   |   |   |   |
|             Available-for-sale |   | $       | 65,801,101 |   |                                             | $      | - |   |   | $ | 65,801,101 |   |   | $ | - |   |

----

|                           |   | Amortized Cost |       |   | Unrealized Gains |   |      | Amortized Losses |   |   | Fair Value |   |
|--------------------------------|--------|----------------|------------|--------|------------------|--------|-----------|------------------|--------|--------|------------|--------|
| December 31, 2010:             |   |           |       |   |             |   |      |             |   |   |       |   |
| Held-to-maturity:              |   |           |       |   |             |   |      |             |   |   |       |   |
| State and political securities |   | $              | 21,626,024 |   |             | $      | 148,718   |             |   | $      | 514,679    |   |   | $ | 21,260,063 |   |
| Corporate securities           |   |           | 1,384,002  |   |             |   | 141,538   |             |   |   | -          |   |   |   | 1,525,540 |   |
|                           |   |           | 23,010,026 |   |             |   | 290,256   |             |   |   | 514,679    |   |   |   | 22,785,603 |   |
| Available-for-sale:            |   |           |       |   |             |   |      |             |   |   |       |   |   |   |   |   |
| Mortgage-backed securities     |   |           | 14,697,482 |   |             |   | 205,400   |             |   |   | 222,918    |   |   |   | 14,679,964 |   |
| U.S. agency securities         |   |           | 35,533,382 |   |             |   | 241,896   |             |   |   | 422,044    |   |   |   | 35,353,234 |   |
| State and political securities |   |           | 11,542,318 |   |             |   | 66,154    |             |   |   | 93,618     |   |   |   | 11,514,854 |   |
|                           |   |           | 61,773,182 |   |             |   | 513,450   |             |   |   | 738,580    |   |   |   | 61,548,052 |   |
|                           |   |           |       |   |             |   |      |             |   |   |       |   |   |   |   |   |
|                           |   | $              | 84,783,208 |   |             | $      | 803,706   |             |   | $      | 1,253,259  |   |   | $ | 84,333,655 |   |
| December 31, 2009:             |   |           |       |   |             |   |      |             |   |   |       |   |   |   |   |   |
| Held-to-maturity:              |   |           |       |   |             |   |      |             |   |   |       |   |   |   |   |   |
| State and political securities |   | $              | 14,778,108 |   |             | $      | 197,861   |             |   | $      | 102,753    |   |   | $ | 14,873,216 |   |
| Corporate securities           |   |           | 1,355,984  |   |             |   | 140,883   |             |   |   | -          |   |   |   | 1,496,867 |   |
|                           |   |           | 16,134,092 |   |             |   | 338,744   |             |   |   | 102,753    |   |   |   | 16,370,083 |   |
| Available-for-sale:            |   |           |       |   |             |   |      |             |   |   |       |   |   |   |   |   |
| Mortgage-backed securities     |   |           | 15,536,388 |   |             |   | 490,819   |             |   |   | 20,841     |   |   |   | 16,006,366 |   |
| U.S. agency securities         |   |           | 39,284,446 |   |             |   | 377,577   |             |   |   | 262,529    |   |   |   | 39,399,494 |   |
| Corporate securities           |   |           | 96,570     |   |             |   | -         |             |   |   | -          |   |   |   | 96,570 |   |
| State and political securities |   |           | 10,305,622 |   |             |   | 76,482    |             |   |   | 83,433     |   |   |   | 10,298,671 |   |
|                           |   |           | 65,223,026 |   |             |   | 944,878   |             |   |   | 366,803    |   |   |   | 65,801,101 |   |
|                           |   |           |       |   |             |   |      |             |   |   |       |   |   |   |   |   |
|                           |   | $              | 81,357,118 |   |             | $      | 1,283,622 |             |   | $      | 469,556    |   |   | $ | 82,171,184 |   |
|                           |   |           |       |   |             |   |      |             |   |   |       |   |   |   |   |   |

----

|                                    |   | Held-to-Maturity |       |   | Available-for-Sale |   |
|-----------------------------------------|--------|------------------|------------|--------|--------------------|--------|
|                                    |   | Amortized Cost   |       |   | Fair Value         |   |   | Amortized Cost |   |   | Fair Value |   |
|  December 31, 2010:                |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| One year or less                        |   | $                | 2,118,579  |   |               | $      | 2,132,573 |   |   | $ | 2,250,793 |   |   | $ | 2,263,560 |   |
| After one year through five years       |   |             | 1,605,499  |   |               |   | 1,604,434 |   |   |   | 8,148,803 |   |   |   | 8,174,152 |   |
| After five years through ten years |   |             | 8,164,296  |   |               |   | 8,098,597 |   |   |   | 10,088,730 |   |   |   | 10,183,000 |   |
| After ten years                    |   |             | 11,121,652 |   |               |   | 10,949,999 |   |   |   | 41,284,856 |   |   |   | 40,927,340 |   |
|                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   | $                | 23,010,026 |   |               | $      | 22,785,603 |   |   | $ | 61,773,182 |   |   | $ | 61,548,052 |   |
| December 31, 2009:                      |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
| One year or less                        |   | $                | 768,156    |   |               | $      | 770,150 |   |   | $ | 947,498 |   |   | $ | 955,036 |   |
| After one year through five years       |   |             | 3,429,108  |   |               |   | 3,462,665 |   |   |   | 12,231,531 |   |   |   | 12,344,303 |   |
| After five years through ten years      |   |             | 3,954,065  |   |               |   | 3,997,165 |   |   |   | 15,751,793 |   |   |   | 15,951,805 |   |
| After ten years                         |   |             | 7,982,763  |   |               |   | 8,140,103 |   |   |   | 36,292,204 |   |   |   | 36,549,957 |   |
|                                    |   |             |       |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                                    |   | $                | 16,134,092 |   |               | $      | 16,370,083 |   |   | $ | 65,223,026 |   |   | $ | 65,801,101 |   |

----

|                           |   | Less Than Twelve Months |      |   | Over Twelve Months |   |
|--------------------------------|--------|-------------------------|-----------|--------|--------------------|--------|
|                           |   | Gross Unrealized Losses |      |   | Fair Value         |   |   | Gross Unrealized Losses |   |   | Fair Value |   |
| December 31, 2010:             |   |                    |      |   |               |   |   |   |   |   |   |   |
| Held-to-maturity               |   |                    |      |   |               |   |   |   |   |   |   |   |
| State and political securities |   | $                       | 514,679   |   |               | $      | 10,570,280 |   |   | $ | - |   |   | $ | - |   |
| Available-for-sale             |   |                    |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| U.S. agency securities         |   |                    | 422,044   |   |               |   | 23,709,073 |   |   |   | - |   |   |   | - |   |
| Mortgage-backed securities     |   |                    | 222,918   |   |               |   | 7,644,311 |   |   |   | - |   |   |   | - |   |
| State and political securities |   |                    | 93,618    |   |               |   | 3,480,664 |   |   |   | - |   |   |   | .- |   |
|                           |   |                    |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | $                       | 1,253,259 |   |               | $      | 45,404,328 |   |   | $ | - |   |   | $ | - |   |
| December 31, 2009:             |   |                    |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity               |   |                    |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| State and political securities |   | $                       | 65,764    |   |               | $      | 4,638,041 |   |   | $ | 36,989 |   |   | $ | 575,192 |   |
| Available-for-sale             |   |                    |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| U.S. agency securities         |   |                    | 262,529   |   |               |   | 17,012,130 |   |   |   | - |   |   |   | - |   |
| Mortgage-backed securities     |   |                    | 20,841    |   |               |   | 3,391,748 |   |   |   | - |   |   |   | - |   |
| State and political securities |   |                    | 22,064    |   |               |   | 2,200,112 |   |   |   | 61,369 |   |   |   | 441,445 |   |
|                           |   |                    |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
|                           |   | $                       | 371,198   |   |               | $      | 27,242,031 |   |   | $ | 98,358 |   |   | $ | 1,016,637 |   |

----

----

|                                                                          |   | December 31, |        |
|-------------------------------------------------------------------------------|--------|--------------|-------------|
|                                                                          |   | 2010         |        |   | 2009 |   |
|      Loans                                           |   |         |        |   |   |   |
|          Commercial              |   | $            | 107,388,340 |   |   | $ | 115,995,984 |   |
|          Commercial real estate  |   |         | 173,897,754 |   |   |   | 170,515,459 |   |
|          Residential real estate |   |         | 55,405,724  |   |   |   | 55,332,538 |   |
|          Consumer                |   |         | 20,307,622  |   |   |   | 23,766,660 |   |
|                                                                          |   |         | 356,999,440 |   |   |   | 365,610,641 |   |
|      Less deferred loan fees                         |   |         | (93,614     | ) |   |   | (64,286 | ) |
|                                                                          |   |         | 356,905,826 |   |   |   | 365,546,355 |   |
|                                                                          |   |         |        |   |   |   |   |   |
|      Allowance for loan losses                       |   |         | (5,005,000  | ) |   |   | (4,785,000 | ) |
|                                                                          |   |         |        |   |   |   |   |   |
|                                                                          |   | $            | 351,900,826 |   |   | $ | 360,761,355 |   |

|                                                   |   |   |       |
|--------------------------------------------------------|--------|--------|------------|
|                                                   |   |   | 2010       |   |   |   | 2009 |   |
|                                                   |   |   |       |   |   |   |   |   |
|    Balance at beginning of year         |   | $      | 4,785,000  |   |   | $ | 3,227,000 |   |
|                                                   |   |   |       |   |   |   |   |   |
|    Charge-offs:                         |   |   |       |   |   |   |   |   |
|    Loans:                               |   |   |       |   |   |   |   |   |
|     Commercial real estate         |   |   | 199,031    |   |   |   | 1,034,946 |   |
|     Commercial                     |   |   | 4,719,746  |   |   |   | 295,417 |   |
|     Residential real estate        |   |   | 23,879     |   |   |   | 58,289 |   |
|     Consumer                       |   |   | 58,179     |   |   |   | 116,934 |   |
|       Total charge-offs  |   |   | 5,000,835  |   |   |   | 1,505,586 |   |
|                                                   |   |   |       |   |   |   |   |   |
|    Recoveries:                          |   |   |       |   |   |   |   |   |
|    Loans:                               |   |   |       |   |   |   |   |   |
|     Commercial real estate         |   |   | 2,318      |   |   |   | - |   |
|     Commercial                     |   |   | 35,821     |   |   |   | 32,724 |   |
|     Residential real estate        |   |   | 39,828     |   |   |   | 2,521 |   |
|     Consumer                       |   |   | 30,767     |   |   |   | 3,243 |   |
|      Total recoveries         |   |   | 108,734    |   |   |   | 38,488 |   |
|                                                   |   |   |       |   |   |   |   |   |
|    Net charge-offs                      |   |   | (4,892,101 | ) |   |   | (1,467,098 | ) ) |
|    Provision for  loan losses |   |   | 5,112,101  |   |   |   | 3,025,098 |   |
|                                                   |   |   |       |   |   |   |   |   |
|    Balance at end of year               |   | $      | 5,005,000  |   |   | $ | 4,785,000 |   |

----

|   |                                                                  |   | 2010   |        |
|--------|-----------------------------------------------------------------------|--------|--------|-------------|
|   |                                                                  |   |   |        |
|   |      Three months or less                    |   | $      | 60,861,862  |   |
|   |      Over three months through twelve months |   |   | 46,846,972  |   |
|   |      Over one year through three years       |   |   | 77,661,202  |   |
|   |      Over three years through five years     |   |   | 96,683,161  |   |
|   |      Over five years through fifteen years   |   |   | 58,535,253  |   |
|   |      Over fifteen years                      |   |   | 16,411,490  |   |
|   |                                                                  |   |   |        |   |
|   |                                                                  |   | $      | 356,999,940 |   |

|                                                                      |   | 2010   |      |   | 2009   |   |
|---------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|   Non-accrual loans:                                            |   |   |      |   |   |   |
|    Commercial real estate                                  |   | $      | 1,499,531 |   |   | $      | 1,782,920 |   |
|    Commercial                                              |   |   | 1,190,000 |   |   |   | - |   |
|    Residential real estate                                 |   |   | 1,441     |   |   |   | 5,000 |   |
|    Consumer                                                |   |   | 3,952     |   |   |   | 98,965 |   |
|   Total non-accrual loans                                       |   |   | 2,694,924 |   |   |   | 1,886,885 |   |
|                                                                      |   |   |      |   |   |   |   |   |
|    Loans delinquent 90 days or greater and still accruing: |   |   |      |   |   |   |   |   |
|    Commercial real estate                                  |   |   | 1,059,213 |   |   |   | - |   |
|    Commercial                                              |   |   | 135,565   |   |   |   | - |   |
|    Residential real estate                                 |   |   | 400,978   |   |   |   | 523,083 |   |
|    Consumer                                                |   |   | 163,789   |   |   |   | 25,822 |   |
|   Total loans delinquent 90 days or greater and still accruing  |   |   | 1,759,545 |   |   |   | 548,905 |   |
|                                                                      |   |   |      |   |   |   |   |   |
|    Total non-performing loans                              |   | $      | 4,454,469 |   |   | $      | 2,435,790 |   |

----

|                                                    |   | December 31, |      |
|---------------------------------------------------------|--------|--------------|-----------|
|                                                    |   | 2010         |      |   | 2009 |   |
|                                                    |   |         |      |   |   |   |
|   Gross impaired loans                        |   | $            | 4,454,469 |   |   | $ | 2,435,790 |   |
|   Less valuation allowance for impaired loans |   |         | 1,298,946 |   |   |   | 515,390 |   |
|                                                    |   |         |      |   |   |   |   |   |
|   Recorded investment in impaired loans       |   | $            | 3,155,523 |   |   | $ | 1,920,400 |   |

|                                                                          |   |   |        |   | Special |   |      |        |   |
|-------------------------------------------------------------------------------|--------|--------|-------------|--------|---------|--------|-----------|-------------|--------|
|                                                                          |   | Pass   |        |   | Mention |   |      | Substandard |   |
|      Loans                                           |   |   |        |   |    |   |      |        |   |
|          Commercial              |   | $      | 103,532,236 |   |    | $      | 1,355,967 |        |   | $ | 2,500,137 |   |
|          Commercial real estate  |   |   | 160,165,443 |   |    |   | 7,891,920 |        |   |   | 5,840,391 |   |
|          Residential real estate |   |   | 53,650,624  |   |    |   | 661,292   |        |   |   | 1,093,808 |   |
|          Consumer                |   |   | 20,245,843  |   |    |   | 55,170    |        |   |   | 6,609 |   |
|                                                                          |   |   |        |   |    |   |      |        |   |   |   |   |
|                                                                          |   | $      | 337,594,146 |   |    | $      | 9,964,349 |        |   | $ | 9,440,945 |   |

|                                               |   | December 31, |       |
|----------------------------------------------------|--------|--------------|------------|
|                                               |   | 2010         |       |   | 2009 |   |
|                                               |   |         |       |   |   |   |
|      Beginning balance    |   | $            | 9,054,520  |   |   | $ | 4,987,233 |   |
|      New loans            |   |         | 4,889,903  |   |   |   | 394,652 |   |
|      Relationship changes |   |         | -          |   |   |   | 3,945,036 |   |
|                                               |   |         | 13,944,423 |   |   |   | 9,326,921 |   |
|      Less payments        |   |         | 1,499,050  |   |   |   | 272,401 |   |
|                                               |   |         |       |   |   |   |   |   |
|      Ending balance       |   | $            | 12,445,373 |   |   | $ | 9,054,520 |   |

|                                                             |   | December 31, |      |
|------------------------------------------------------------------|--------|--------------|-----------|
|                                                             |   | 2010         |      |   | 2009 |   |
|                                                             |   |         |      |   |   |   |
|      Land and improvements              |   | $            | 3,260,569 |   |   | $ | 3,251,047 |   |
|      Buildings                          |   |         | 3,629,964 |   |   |   | 3,539,381 |   |
|      Furniture, fixtures, and equipment |   |         | 2,547,082 |   |   |   | 2,537,647 |   |
|      Automobiles                        |   |         | 51,234    |   |   |   | 51,234 |   |
|                                                             |   |         | 9,488,849 |   |   |   | 9,379,309 |   |
|      Less accumulated depreciation      |   |         | 2,793,847 |   |   |   | 2,450,625 |   |
|                                                             |   |         |      |   |   |   |   |   |
|                                                             |   | $            | 6,695,002 |   |   | $ | 6,928,684 |   |

----

|                                                    |   | 2010   |      |   | 2009   |   |
|---------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                    |   |   |      |   |   |   |
|    Balance at beginning of year          |   | $      | 2,268,704 |   |   | $      | 1,490,734 |   |
|      Properties acquired       |   |   | 330,000   |   |   |   | 1,530,674 |   |
|      Subsequent write-downs    |   |   | (204,779  | )      |   |   | (752,704 |   |
|      Gross proceeds from sales |   |   | (260,000  | )      |   |   | - |   |
|      Gains (losses) recorded   |   |   | (31,067   | )      |   |   | - |   |
|                                                    |   |   |      |   |   |   |   |   |
|                                                    |   | $      | 2,102,858 |   |   | $      | 2,268,704 |   |

|                                                                                |   | December 31, |        |
|-------------------------------------------------------------------------------------|--------|--------------|-------------|
|                                                                                |   | 2010         |        |   | 2009 |   |
|                                                                                |   |         |        |   |   |   |   | Weighted |   |   |   |   |   |   |   |   | Weighted |   |
|                                                                                |   |         |        |   |   |   |   | Average |   |   |   |   |   |   |   |   | Average |   |
|                                                                                |   | Balance      |        |   | % |   |   | Rate |   |   | Balance |   |   | % |   |   | Rate |   |
|                                                                                |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|           Savings                 |   | $            | 18,699,236  |   |   |   | 4.69 |   |   |   | 0.18 | % |   | $ | 18,249,349 |   |   |   | 4.68 |   |   |   | 0.20 | % |
|           Certificates of deposit |   |         | 211,010,113 |   |   |   | 52.93 |   |   |   | 2.40 |   |   |   | 222,258,011 |   |   |   | 57.07 |   |   |   | 3.46 |   |
|           Money market            |   |         | 67,291,744  |   |   |   | 16.88 |   |   |   | 0.45 |   |   |   | 42,340,174 |   |   |   | 10.87 |   |   |   | 0.50 |   |
|           Now                     |   |         | 45,008,867  |   |   |   | 11.29 |   |   |   | 0.35 |   |   |   | 47,550,161 |   |   |   | 12.21 |   |   |   | 0.30 |   |
|           Checking                |   |         | 56,661,811  |   |   |   | 14.21 |   |   |   | - |   |   |   | 59,073,303 |   |   |   | 15.17 |   |   |   | - |   |
|                                                                                |   |         |        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   | $            | 398,671,771 |   |   |   | 100.00 |   |   |   | 1.44 |   |   | $ | 389,470,998 |   |   |   | 100.00 |   |   |   | 2.08 |   |

|                                                                           |   | 2010   |      |   | 2009   |   |
|--------------------------------------------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                                                           |   |   |      |   |   |   |
|          Savings                  |   | $      | 34,930    |   |   | $      | 28,014 |   |
|          Certificates of deposits |   |   | 5,353,127 |   |   |   | 5,948,008 |   |
|          Money market             |   |   | 267,210   |   |   |   | 167,449 |   |
|          Now                      |   |   | 168,988   |   |   |   | 118,614 |   |
|                                                                           |   |   |      |   |   |   |   |   |
|                                                                           |   | $      | 5,824,255 |   |   | $      | 6,262,085 |   |

----

|                                                                  |   | 2010   |        |
|-----------------------------------------------------------------------|--------|--------|-------------|
|                                                                  |   |   |        |
|      Three months or less                    |   | $      | 41,287,393  |   |
|      Over three months through twelve months |   |   | 87,822,804  |   |
|      Over one year through three years       |   |   | 58,848,776  |   |
|      Over three years                        |   |   | 23,051,140  |   |
|                                                                  |   |   |        |   |
|                                                                  |   | $      | 211,010,113 |   |

|                                             |   | 2010   |       |   | 2009   |   |
|--------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                             |   |   |       |   |   |   |
| Average balance during the year                  |   | $      | 19,190,556 |   |   | $      | 14,667,000 |   |
| Average interest rate during the year            |   |   | 2.07       | %      |   |   | 2.84 | % |
| Maximum month-end balance during the year        |   | $      | 20,675,303 |   |   | $      | 25,204,318 |   |
| U.S. agency securities underlying the agreements |   |   | 28,614,911 |   |   |   | 24,544,858 |   |

|   | Year       |   |   | Amount |       |
|--------|------------|--------|--------|--------|------------|
|   |       |   |   |   |       |
|   | 2011       |   |   | $      | 17,499,999 |   |
|   | 2012       |   |   |   | 5,000,000  |   |
|   | 2013       |   |   |   | -          |   |
|   | 2014       |   |   |   | -          |   |
|   | 2015       |   |   |   | -          |   |
|   | Thereafter |   |   |   | 11,220,578 |   |
|   |       |   |   |   |       |   |
|   |       |   |   | $      | 33,720,577 |   |

----

----

|                                                 |   | 2010   |       |   | 2009   |   |
|------------------------------------------------------|--------|--------|------------|--------|--------|--------|
|                                                 |   |   |       |   |   |   |
|     Commitments to extend credit |   | $      | 51,098,474 |   |   | $      | 49,912,068 |   |
|     Standby letters of credit    |   |   | 7,800,962  |   |   |   | 9,124,712 |   |

----

|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   | To Be Well       |   |
|----------------------------------------------------------------------|--------|--------|------------|--------|-------------------|--------|--------|-------------------|--------|--------|------------|--------|--------|------------------|--------|
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   | Capitalized      |   |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   | Under The Prompt |   |
|                                                                 |   |   |       |   |              |   |   | For Capital       |   |   | Corrective |   |
|                                                                 |   | Actual |       |   | Adequate Purposes |   |   | Action Provisions |   |
|                                                                 |   | Amount |       |   | Ratio             |   |   | Amount            |   |   | Ratio      |   |   | Amount           |   |   | Ratio |   |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |
| December 31, 2010:                                                   |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |
| Total Risk-Based Capital                                             |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |
|         (to Risk-Weighted Assets) |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |
|      Bank                                   |   | $      | 39,770,000 |   |              |   | 11.62  | %                 |   | $      | 27,381,000 |   |   |             | 8      | % |   | $ | 34,226,000 |   |   |   | 10 | % |
|      Consolidated                           |   |   | 39,826,000 |   |              |   | 11.65  | %                 |   |   | 27,349,000 |   |   |             | 8      | % |   |   | 34,186,000 |   |   |   | 10 | % |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Tier l Capital                                                       |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|        (to Risk-Weighted Assets)       |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|      Bank                                   |   |   | 35,484,000 |   |              |   | 10.37  | %                 |   |   | 13,688,000 |   |   |             | 4      | % |   |   | 20,531,000 |   |   |   | 6 | % |
|      Consolidated                           |   |   | 35,542,000 |   |              |   | 10.39  | %                 |   |   | 13,684,000 |   |   |             | 4      | % |   |   | 20,525,000 |   |   |   | 6 | % |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Tier l Capital                                                       |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|        (to Adjusted Total Assets)      |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|      Bank                                   |   |   | 35,484,000 |   |              |   | 7.19   | %                 |   |   | 19,741,000 |   |   |             | 4      | % |   |   | 24,676,000 |   |   |   | 5 | % |
|      Consolidated                           |   |   | 35,542,000 |   |              |   | 7.23   | %                 |   |   | 19,664,000 |   |   |             | 4      | % |   |   | 24,580,000 |   |   |   | 5 | % |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
| December 31, 2009:                                                   |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|    Total Risk-Based Capital                                |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|     (to Risk-Weighted Assets)                         |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|      Bank                                   |   | $      | 38,165,000 |   |              |   | 10.81  | %                 |   | $      | 28,249,000 |   |   |             | 8      | % |   | $ | 35,311,000 |   |   |   | 10 | % |
|      Consolidated                           |   |   | 38,404,000 |   |              |   | 10.88  | %                 |   |   | 28,238,000 |   |   |             | 8      | % |   |   | 35,298,000 |   |   |   | 10 | % |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Tier l Capital                                                       |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|         (to Risk-Weighted Assets) |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|      Bank                                   |   |   | 33,747,000 |   |              |   | 9.56   | %                 |   |   | 14,124,000 |   |   |             | 4      | % |   |   | 21,187,000 |   |   |   | 6 | % |
|      Consolidated                           |   |   | 38,404,000 |   |              |   | 9.63   | %                 |   |   | 15,952,000 |   |   |             | 4      | % |   |   | 23,928,000 |   |   |   | 6 | % |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
| Tier l Capital                                                       |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
| (to Adjusted Total Assets)                                           |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |
|      Bank                                   |   |   | 33,747,000 |   |              |   | 6.91   | %                 |   |   | 19,529,000 |   |   |             | 4      | % |   |   | 24,411,000 |   |   |   | 5 | % |
|      Consolidated                           |   |   | 33,988,000 |   |              |   | 6.90   | %                 |   |   | 19,703,000 |   |   |             | 4      | % |   |   | 24,629,000 |   |   |   | 5 | % |
|                                                                 |   |   |       |   |              |   |   |              |   |   |       |   |   |             |   |   |   |   |   |   |   |   |   |   |

----

|                                                          |   | Years Ended December 31, |      |
|---------------------------------------------------------------|--------|--------------------------|-----------|
|                                                          |   | 2010                     |      |   | 2009 |   |
|      Current tax expense             |   |                     |      |   |   |   |
|          Federal |   | $                        | 274,802   |   |   | $ | 542,953 |   |
|          State   |   |                     | 100,955   |   |   |   | 143,647 |   |
|      Deferred tax expense (benefit)  |   |                     |      |   |   |   |   |   |
|          Federal |   |                     | 539,022   |   |   |   | (459,417 | ) |
|          State   |   |                     | 91,424    |   |   |   | (133,988 | ) |
|                                                          |   |                     |      |   |   |   |   |   |
|                                                          |   | $                        | 1,006,203 |   |   | $ | 93,195 |   |

|                                                           |   | Year Ended December 31, |      |
|----------------------------------------------------------------|--------|-------------------------|-----------|
|                                                           |   | 2010                    |      |   | 2009 |   |
|                                                           |   |                    |      |   |   |   |
|      Federal statutory income tax     |   | $                       | 1,209,533 |   |   | $ | 279,121 |   |
|      State income tax, net of federal |   |                    |      |   |   |   |   |   |
|         tax benefit    |   |                    | 66,630    |   |   |   | 94,807 |   |
|      Tax exempt interest income       |   |                    | (382,888  | ) |   |   | (276,294 | ) |
|      Other                            |   |                    | 112,928   |   |   |   | (4,439 | ) |
|                                                           |   |                    |      |   |   |   |   |   |
|                                                           |   | $                       | 1,006,203 |   |   | $ | 93,195 |   |

----

|                                                                                            |   | December 31, |      |
|-------------------------------------------------------------------------------------------------|--------|--------------|-----------|
|                                                                                            |   | 2010         |      |   | 2009 |   |
|      Deferred tax assets:                                              |   |         |      |   |   |   |
|           Allowance for loan losses           |   | $            | 965,631   |   |   | $ | 1,116,104 |   |
|           NOL carryforward                    |   |         | -         |   |   |   | 774,857 |   |
|           Acquisition costs                   |   |         | 137,731   |   |   |   | 137,731 |   |
|           OREO write-downs                    |   |         | 374,004   |   |   |   | 291,688 |   |
|           Nonaccrual interest                 |   |         | 54,940    |   |   |   | - |   |
|           AMT credit carryforward             |   |         | 83,942    |   |   |   | - |   |
|           OTTI securities                     |   |         | 179,278   |   |   |   | 179,278 |   |
|           Unrealized loss on securities       |   |         | 85,549    |   |   |   | - |   |
|                                                                                            |   |         | 1,881,075 |   |   |   | 2,499,658 |   |
|      Deferred tax liabilities:                                         |   |         |      |   |   |   |   |   |
|           Depreciation                        |   |         | 243,400   |   |   |   | 216,569 |   |
|           Accretion of discounts, net         |   |         | 54,477    |   |   |   | 45,700 |   |
|            Unrealized gain on securities |   |         | -         |   |   |   | 217,529 |   |
|                                                                                            |   |         | 297,877   |   |   |   | 479,798 |   |
|                                                                                            |   |         |      |   |   |   |   |   |
|           Net deferred tax asset              |   | $            | 1,583,198 |   |   | $ | 2,019,860 |   |

----

|   |                    |   |   |   |    |
|--------|-------------------------|--------|--------|--------|---------|
|   | Year EndingDecember 31, |   |   | Amount |    |
|   | 2011                    |   |   | $      | 117,000 |   |
|   | 2012                    |   |   |   | 109,500 |   |
|   | 2013                    |   |   |   | 72,000  |   |
|   | 2014                    |   |   |   | 72,000  |   |
|   | 2015                    |   |   |   | 76,500  |   |
|   | Thereafter              |   |   |   | 331,500 |   |
|   |                    |   |   |   |    |   |
|   |                    |   |   | $      | 778,500 |   |
|   |                    |   |   |   |    |   |

----

| BALANCE SHEETS                                                 |   | December 31,             |       |
|----------------------------------------------------------------|--------|--------------------------|------------|
|                                                           |   | 2010                     |       |   | 2009 |   |
| ASSETS                                                         |   |                     |       |   |   |   |
|      Investments in subsidiary        |   | $                        | 37,949,696 |   |   | $ | 36,819,489 |   |
|      Other assets                     |   |                     | 71,369     |   |   |   | 299,710 |   |
|                                                           |   |                     |       |   |   |   |   |   |
|                                                           |   | $                        | 38,021,065 |   |   | $ | 37,119,199 |   |
|                                                           |   |                     |       |   |   |   |   |   |
| LIABILITIES                                                    |   |                     |       |   |   |   |   |   |
|      Total liabilities                |   | $                        | 9,012,006  |   |   | $ | 9,009,582 |   |
|      Total stockholders’ equity |   |                     | 29,009,059 |   |   |   | 28,109,617 |   |
|                                                           |   |                     |       |   |   |   |   |   |
|                                                           |   | $                        | 38,021,065 |   |   | $ | 37,119,199 |   |
|                                                           |   |                     |       |   |   |   |   |   |
| STATEMENTS OF INCOME                                           |   | Years Ended December 31, |       |
|                                                           |   |                     | 2010       |   |   |   | 2009 |   |
| Income:                                                        |   |                     |       |   |   |   |   |   |
|     Dividends from subsidiary              |   | $                        | 899,735    |   |   | $ | 916,505 |   |
|     Other income                           |   |                     | 31,627     |   |   |   | 25,243 |   |
|                                                           |   |                     | 931,362    |   |   |   | 941,748 |   |
| Expenses:                                                      |   |                     |       |   |   |   |   |   |
|     Other                                  |   |                     | -          |   |   |   | - |   |
|                                                           |   |                     |       |   |   |   |   |   |
| Income before income taxes and equity                          |   |                     |       |   |   |   |   |   |
|     in undistributed income of subsidiary  |   |                     | 931,362    |   |   |   | 941,748 |   |
|                                                           |   |                     |       |   |   |   |   |   |
| Federal and state income tax expense                           |   |                     | (12,006    | ) |   |   | (9,582 | ) |
|                                                           |   |                     |       |   |   |   |   |   |
| Income before equity in undistributed income                   |   |                     |       |   |   |   |   |   |
|     of subsidiary                          |   |                     | 919,356    |   |   |   | 932,166 |   |
|                                                           |   |                     |       |   |   |   |   |   |
| Equity in undistributed income of subsidiary                   |   |                     | 1,631,892  |   |   |   | (204,416 | ) |
|                                                           |   |                     |       |   |   |   |   |   |
|                                                           |   | $                        | 2,551,248  |   |   | $ | 727,750 |   |

----

| STATEMENTS OF CASH FLOWS                                                                                  |   | Years Ended December 31, |       |
|-----------------------------------------------------------------------------------------------------------|--------|--------------------------|------------|
|                                                                                                      |   |                     | 2010  |   |   |   |  2009 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                                      |   |                     |       |   |   |   |   |   |
|     Net income                                                                        |   | $                        | 2,551,248  |   |   | $ | 727,750 |   |
|     Adjustments to reconcile net income to net cash                                   |   |                     |       |   |   |   |   |   |
|        provided by operating activities:                               |   |                     |       |   |   |   |   |   |
|           Increase in equity in undistributed income of |   |                     |       |   |   |   |   |   |
|              subsidiary                  |   |                     | (1,631,892 | ) |   |   | 204,416 |   |
|           Decrease in other  assets           |   |                     | 228,339    |   |   |   | 20 |   |
|           Increase in other liabilities                 |   |                     | 2,424      |   |   |   | (1,180 | ) |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| NET CASH PROVIDED BY OPERATING ACTIVITIES                                                                 |   |                     | 1,150,119  |   |   |   | 931,006 |   |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING                                                                                 |   |                     |       |   |   |   |   |   |
|  ACTIVITIES                                                                                          |   |                     |       |   |   |   |   |   |
|     Capitalization of subsidiaries                                                    |   |                     | -          |   |   |   | (9,876 |  ) |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| NET CASH USED IN INVESTING ACTIVITIES                                                                     |   |                     | -          |   |   |   | (9,876 |   |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                      |   |                     |       |   |   |   |   |   |
|     Cash dividends paid                                                               |   |                     | (1,150,119 | ) |   |   | (921,130 | ) |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| NET CASH USED IN FINANCING ACTIVITIES                                                                     |   |                     | (1,150,119 | ) |   |   | (921,130 | ) |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| NET CHANGE IN CASH                                                                                        |   |                     | -          |   |   |   | - |   |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| CASH, BEGINNING                                                                                           |   |                     | -          |   |   |   | - |   |
|                                                                                                      |   |                     |       |   |   |   |   |   |
| CASH, ENDING                                                                                              |   | $                        | -          |   |   | $ | - |   |

| ITEM 9. | Changes In and Disagreements With Accountants on Accounting and Financial Disclosure |
|---------|--------------------------------------------------------------------------------------|

| ITEM 9A. | Controls and Procedures |
|----------|-------------------------|

----

| ITEM 9B. | Other Information |
|----------|-------------------|

| ITEM 10. | Directors, Executive Officers and Corporate Governance |
|----------|--------------------------------------------------------|

----

| ITEM 11. | Executive Compensation |
|----------|------------------------|

| ITEM 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters |
|----------|------------------------------------------------------------------------------------------------|

| ITEM 13. | Certain Relationships and Related Transactions, and Director Independence |
|----------|---------------------------------------------------------------------------|

| ITEM 14. | Principal Accountant Fees and Services |
|----------|----------------------------------------|

| ITEM 15. | Exhibits and Financial Statement Schedules |
|----------|--------------------------------------------|

|   | 3.1 | Articles of Incorporation of First Sentry Bancshares, Inc.* |
|--------|-----|-------------------------------------------------------------|

|   | 3.2 | Bylaws of First Sentry Bancshares, Inc.* |
|--------|-----|------------------------------------------|

|   | 4 | Form of Common Stock Certificate of First Sentry Bancshares, Inc.* |
|--------|---|--------------------------------------------------------------------|

|   | 10.1 | Employment Agreement with Geoffrey S. Sheils* |
|--------|------|-----------------------------------------------|

|   | 10.2 | Form of Consulting Agreement for Marc A. Sprouse* |
|--------|------|---------------------------------------------------|

|   | 10.3 | Form of Retention Agreement for Larry E. Plantz* |
|--------|------|--------------------------------------------------|

|   | 14 | Code of Ethics** |
|--------|----|------------------|

|   | 21 | Subsidiaries of Registrant* |
|--------|----|-----------------------------|

|   | 31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
|--------|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 32 | Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  ______ | ______________________________ |
|--------------|--------------------------------|

| * | Incorporated by reference to the Registration Statement on Form S-4 of First Sentry Bancshares, Inc. (File No. 333-156180), originally filed with the Securities and Exchange Commission on December 16, 2008, as amended. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ** | Incorporated by reference to Exhibit 14 to the Annual Report on Form 10-K of First Sentry Bancshares, Inc. filed with the Securities and Exchange Commission on March 31, 2010 (File No. 000-53790). |
|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

SIG

|                 | FIRST SENTRY BANCSHARES, INC.         |
|----------------------|---------------------------------------|
|                 |                                  |   |
|                 |                                  |   |
| Date: March 25, 2011 | By:                                   | /s/ Geoffrey S. Sheils |
|                 | Geoffrey S. Sheils                    |
|                 | President and Chief Executive Officer |
|                 | (Duly Authorized Representative)      |

| Signatures                                                                                                                                                                                                                                                     |   | Title                                                                |   | Date            |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|----------------------|
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ Geoffrey S. Sheils                                                                                                                                                                                                                                         |   | President and Chief                                                  |   |  March 25, 2011 |
| Geoffrey S. Sheils                                                                                                                                                                                                                                             |   | Executive Officer (Principal Executive Officer)                      |   |            |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Richard D. Hardy                                                                                                                                                                                                                                     |   | Senior Vice President and                                            |   |                 |
| Richard D. Hardy                                                                                                                                                                                                                                               |   | Chief Financial Officer (Principal Financial and Accounting Officer) |   | March 25, 2011       |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ Robert H. Beymer                                                                                                                                                                                                                                           |   | Chairman of the Board                                                |   | March 25, 2011       |
| Robert H. Beymer                                                                                                                                                                                                                                          |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ Kerry P. Dillard                                        |   | Director                                                             |   | March 25, 2011       |
|  Kerry P. Dillard                                                                                                                                                                                                                                         |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Jeffrey E. Hood                                                                                                                                                                                                                                      |   | Director                                                             |   |  March 25, 2011 |
| Jeffrey E. Hood                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Johnnie Jones                                                                                                                                                                                                                         |   | Director                                                             |   | March 25, 2011       |
| Johnnie Jones                                                                                                                                                                                                                                             |   |                                                            |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Nester S. Logan                                                                                                                                                                                                                            |   | Director                                                             |   | March 25, 2011       |
| Nester S. Logan                                                                                                                                                                                                                                           |   |                                                            |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Charles H. McKown, Jr. MD                                                                                                                                                                                                                            |   | Director                                                             |   | March 25, 2011       |
| Charles H. McKown, Jr. MD                                                                                                                                                                                                                                 |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ Robert L. Shell, Jr.                                                                                                                                                                                                                        |   | Director                                                             |   | March 25, 2011       |
| Robert L. Shell, Jr.                                                                                                                                                                                                                                      |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Paul L. Turman, II                                                                                                                                                                                                                    |   | Director                                                             |   | March 25, 2011       |
| Paul L. Turman, II                                                                                                                                                                                                                                        |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ Joseph Williams                                                                                                                                                                                                                                  |   | Director                                                             |   | March 25, 2011       |
| Joseph Williams                                                                                                                                                                                                                                           |   |                                                            |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ S. Kenneth Wolfe, MD                                                                                                                                                                                                                                  |   | Director                                                             |   | March 25, 2011       |
| S. Kenneth Wolfe, MD                                                                                                                                                                                                                                      |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ Marc A. Sprouse                                                                                                                                                                                                                                            |   | Director                                                             |   | March 25, 2011       |
| Marc A. Sprouse                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ David Fox, III                                                                                                                                                                                                                                             |   | Director                                                             |   | March 25, 2011       |
| David Fox, III                                                                                                                                                                                                                                            |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ J. Grant McGuire                                                                                                                                                                                                                                |   | Director                                                             |   | March 25, 2011       |
| J. Grant McGuire                                                                                                                                                                                                                                          |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
| /s/ Edward W. Morrison, Jr.                                                                                                                                                                                                                               |   | Director                                                             |   | March 25, 2011       |
| Edward W. Morrison, Jr.                                                                                                                                                                                                                                   |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Sally C.B. Oxley                                                                                                                                                                                                                                |   | Director                                                             |   | March 25, 2011       |
| Sally C.B. Oxley                                                                                                                                                                                                                                          |   |                                                            |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ George A. Patterson, III                                                                                                                                                                                                                        |   | Director                                                             |   | March 25, 2011       |
| /George A. Patterson, III                                                                                                                                                                                                                                 |   |                                                            |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ Paul B. Riedel                                                                                                                                                                                                                   |   | Director                                                             |   | March 25, 2011       |
| Paul B. Riedel                                                                                                                                                                                                                                            |   |                                                                 |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ J. Roger Smith                                                                                                                                                                                                              |   | Director                                                             |   | March 25, 2011       |
| J. Roger Smith                                                                                                                                                                                                                                            |   |                                                            |   |                 |
|                                                                                                                                                                                                                                                           |   |                                                                 |   |                 |
|  /s/ John Jay White                                                                                                                                                                                                                             |   |  Director                                                       |   |  March 25, 2011 |
| John Jay White                                                                                                                                                                                                                                            |   |                                                                 |   |                 |

----