----

----

| T | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF |   |
|---|--------------------------------------------------|--------|

| o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF |   |
|---|------------------------------------------------------|--------|

| Florida                                                        | 59-3543956                           |
|----------------------------------------------------------------|--------------------------------------|
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
|                                                           |                                 |
| 1315 South Third Street, Jacksonville Beach, Florida           | 32250                                |
| (Address of principal executive offices)                       | (Zip Code)                           |

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

----

----

----

| · | Identified the composition of assets classified by the FDIC in its November 2008 exam and the issues identified by the FDIC that gave rise to their classifications. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Address how the required reductions in the classified assets are expected to affect our losses. |
|--------|-------------------------------------------------------------------------------------------------|

| · | More clearly describe how the regulatory requirement to reduce these balances was considered in developing our allowance for loan losses at December 31, 2009 and for interim periods in 2010. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | ASC 450-20 (formerly SFAS No. 5, Accounting for Contingencies) |
|--------|----------------------------------------------------------------|

| · | ASC 310-10-35 (formerly SFAS No. 114, Accounting by Creditors for Impairment of a Loan) |
|--------|-----------------------------------------------------------------------------------------|

----

ATLAN

|     |                                                                                       |   | Page   |
|----------|--------------------------------------------------------------------------------------------|--------|--------|
| PART II  |
|     |                                                                                       |   |   |
| Item 7.  | Management’s Discussion and Analysis of Financial Condition and Results of Operation |   | 1      |
|     |                                                                                       |   |   |
|     |                                                                                       |   |   |
| Item 8.  | Financial Statements and Supplementary Data -                                              |   |   |
|     | Report of Registered Public Accounting Firm                                                |   | 31     |
|     |                                                                                       |   |   |
|     |                                                                                       |   |   |
| PART IV  |
|     |                                                                                       |   |   |
| Item 15. | Exhibits                                                                                   |   | 66     |
|     |                                                                                       |   |   |
|     | Signatures                                                                                 |   | 67     |

----

Table of Contents

| ITEM 7. | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. |
|---------|----------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

| · | Atlantic has a prior history of taxable earnings prior to losses that began in 2008. Since inception in 1997, Atlantic has reported taxable income in 10 of 12 years through 2008, with cumulative taxable income of nearly $9.0 million through 2008. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Atlantic has reported and believes that changes have been made to allow Atlantic to return to a taxable earnings position, including reductions in payroll and other operating costs.  Within the next 2-5 years, internal projections indicate that book and taxable income are more likely than not to return to levels approaching those prior to 2008. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Management has received and considered offers to purchase two of its branch locations and relocate to leased space (or lease-back its existing facilities).  While the sale-leaseback would not likely generate significant book income immediately, the taxable income was projected to exceed $1.3 million. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Management and the Board of Directors have discussed a tax strategy that would generate taxable income of approximately $1.2 from the liquidation of bank-owned life insurance policies. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Converting tax-exempt investment income to taxable investment income, which could increase taxable income by almost $1.0 million and book income by $0.4 million. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Repurchase of junior subordinated debentures at a discount. |
|--------|-------------------------------------------------------------|

| · | Termination of all or a portion of the Bank’s deferred compensation plan, which would generate up to $1.6 million in book taxable income and reduce the deferred tax asset by $0.6 million. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| · | Our income from average interest-earning assets decreased 9.4%. |
|--------|-----------------------------------------------------------------|

| · | Our provision for loan losses increased $1,844,000, or 41.7%, over 2008. |
|--------|--------------------------------------------------------------------------|

| · | Noninterest income declined $758,000, or 50.2% in 2009 over 2008. |
|--------|-------------------------------------------------------------------|

| · | Noninterest expenses grew $842,000, or 11.0%. |
|--------|-----------------------------------------------|

| · | The establishment of a deferred tax valuation allowance of $2,768,000 in 2009 caused the income tax provision to increase by $2,019,000. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------|

| · | A decrease in gains on the sale of securities from $346,000 to $56,000; |
|--------|-------------------------------------------------------------------------|

| · | Losses on the sale of foreclosed assets of $142,000 in 2009 versus a gain of $4,000 in 2008; and |
|--------|--------------------------------------------------------------------------------------------------|

| · | A loss of $179,000 on restricted stock issued by a correspondent bank that was taken over by the FDIC in 2009. |
|--------|----------------------------------------------------------------------------------------------------------------|

| · | The cost of deposit insurance assessments soared from $229,000 in 2008 to $1,014,000 in 2009, an increase of $785,000, or 342.8%, as a result of increased assessments from the FDIC. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Processing and settlement fees increased from $773,000 in 2008 to $836,000 in 2009, an increase of $63,000, or 8.2%.  Through 2008, statements were rendered in-house and the expense was recorded as postage, stationary, and supplies.  At the beginning of 2009, the statement rendering process was outsourced and all related costs were recorded as processing and settlement fees.  As a result, there was a reduction in postage, stationary, and supplies in 2009. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Company expensed $177,000 in 2009 for costs to raise capital to meet regulatory requirements versus $-0- in 2008. |
|--------|-----------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| · | The write-down of other real estate owned totaled $586,000 in 2009 versus $315,000 in 2008, as a result of the continued decline in real estate values in 2009. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Professional, legal, and accounting fees were $589,000 in 2009 versus $459,000 in 2008, an increase of $130,000, or 28.3%, as a result of increased costs of corporate governance, regulatory compliance, and addressing regulatory enforcement actions. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Salaries and employee benefits decreased by $282,000, or 9.0%. |
|--------|----------------------------------------------------------------|

| · | Expenses of bank premises and fixed assets decreased by $63,000, or 5.8%. |
|--------|---------------------------------------------------------------------------|

| · | Directors fees were eliminated, decreasing costs by $78,000. |
|--------|--------------------------------------------------------------|

| · | Advertising and business development decreased by $50,000, or 34.5%.  Stationery, printing, and supplies decreased by $36,000, or 33.6%. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Interest and fees on loans totaled $13,637,000 in 2008 compared with $15,255,000 in 2007, a decrease of $1,618,000, or 10.6%.  Other interest income also declined $415,000 in 2008 over 2007, or 19.6%. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Our income from average interest-earning assets decreased 11.7%. |
|--------|------------------------------------------------------------------|

| · | Our total interest expense decreased $1,201,000, or 12.5%. |
|--------|------------------------------------------------------------|

| · | Net interest income declined by $832,000 in 2008 from 2007. |
|--------|-------------------------------------------------------------|

| · | Noninterest income grew $390,000, or 34.9% in 2008 over 2007. |
|--------|---------------------------------------------------------------|

| · | Noninterest expenses grew $1,236,000, or 19.3%. |
|--------|-------------------------------------------------|

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Table of Contents

| · | Expenses related to other real estate owned totaled $807,000 in 2008 versus $-0- in 2007, as a result of losses and ongoing expenses on properties that Oceanside obtained title in 2008. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Professional, legal, and audit fees were $459,000 in 2008 versus $264,000 in 2007, an increase of $195,000, or 73.9%, as a result of increased costs of corporate governance and regulatory compliance matters. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Pension expense totaled $294,000 in 2008, an increase of 63.3% from 2007.  This increase of $114,000 was more than offset by the net increase in the cash surrender value of the life insurance policies, which totaled $206,000. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Regulatory assessments increased by $60,000, or 35.5%, from 2007 to 2008 due to increased cost of maintaining the FDIC insurance fund. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                              |   | Years Ended December 31, |    |
|-----------------------------------|--------|--------------------------|---------|
|                              |   | 2009                     |    |   | 2008 |   |   | 2007 |   |
|                              |   |                     |    |   |   |   |   | Average |   |   |   |   |   |   |   |   | Average |   |   |   |   |   |   |   |   | Average |   |
|                              |   | Average                  |    |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                              |   | Balance                  |    |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Interest-earning assets:          |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans (1)                         |   | $                        | 206,188 |   |   | $ | 12,354 |   |   |   | 5.99 | % |   | $ | 203,675 |   |   | $ | 13,637 |   |   |   | 6.70 | % |   | $ | 187,544 |   |   | $ | 15,255 |   |   |   | 8.13 | % |
| Securities and deposits (2)       |   |                     | 45,015  |   |   |   | 1,540 |   |   |   | 4.31 |   |   |   | 36,995 |   |   |   | 1,663 |   |   |   | 5.59 |   |   |   | 41,696 |   |   |   | 1,886 |   |   |   | 5.38 |   |
| Other interest-earning assets (3) |   |                     | 549     |   |   |   | 1 |   |   |   | 0.18 |   |   |   | 1,978 |   |   |   | 35 |   |   |   | 1.77 |   |   |   | 4,099 |   |   |   | 227 |   |   |   | 5.54 |   |
| Total interest-earning            |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| assets (2)                        |   |                     | 251,752 |   |   |   | 13,895 |   |   |   | 5.68 | % |   |   | 242,648 |   |   |   | 15,335 |   |   |   | 6.49 | % |   |   | 233,339 |   |   |   | 17,368 |   |   |   | 7.60 | % |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets        |   |                     | 46,326  |   |   |   |   |   |   |   |   |   |   |   | 17,381 |   |   |   |   |   |   |   |   |   |   |   | 14,335 |   |   |   |   |   |   |   |   |   |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                      |   | $                        | 298,078 |   |   |   |   |   |   |   |   |   |   | $ | 260,029 |   |   |   |   |   |   |   |   |   |   | $ | 247,674 |   |   |   |   |   |   |   |   |   |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:     |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                   |   | $                        | 88,744  |   |   |   | 1,530 |   |   |   | 1.72 | % |   | $ | 42,108 |   |   |   | 996 |   |   |   | 2.37 | % |   | $ | 42,858 |   |   |   | 1,683 |   |   |   | 3.93 | % |
| Savings                           |   |                     | 2,858   |   |   |   | 28 |   |   |   | 0.99 |   |   |   | 2,988 |   |   |   | 33 |   |   |   | 1.10 |   |   |   | 3,751 |   |   |   | 56 |   |   |   | 1.49 |   |
| Certificates of deposit           |   |                     | 138,791 |   |   |   | 4,710 |   |   |   | 3.39 |   |   |   | 146,595 |   |   |   | 6,741 |   |   |   | 4.60 |   |   |   | 129,313 |   |   |   | 6,726 |   |   |   | 5.20 |   |
| Other borrowings                  |   |                     | 15,833  |   |   |   | 532 |   |   |   | 3.36 |   |   |   | 21,046 |   |   |   | 620 |   |   |   | 2.95 |   |   |   | 22,888 |   |   |   | 1,126 |   |   |   | 4.92 |   |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing            |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| liabilities                       |   |                     | 246,226 |   |   |   | 6,800 |   |   |   | 2.76 | % |   |   | 212,737 |   |   |   | 8,390 |   |   |   | 3.94 | % |   |   | 198,810 |   |   |   | 9,591 |   |   |   | 4.82 | % |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities   |   |                     | 36,011  |   |   |   |   |   |   |   |   |   |   |   | 28,718 |   |   |   |   |   |   |   |   |   |   |   | 30,778 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity        |   |                     | 15,841  |   |   |   |   |   |   |   |   |   |   |   | 18,574 |   |   |   |   |   |   |   |   |   |   |   | 18,086 |   |   |   |   |   |   |   |   |   |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities and             |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| stockholders’ equity        |   | $                        | 298,078 |   |   |   |   |   |   |   |   |   |   | $ | 260,029 |   |   |   |   |   |   |   |   |   |   | $ | 247,674 |   |   |   |   |   |   |   |   |   |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income (before       |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| provision for loan losses)        |   |                     |    |   |   | $ | 7,095 |   |   |   |   |   |   |   |   |   |   | $ | 6,945 |   |   |   |   |   |   |   |   |   |   | $ | 7,777 |   |   |   |   |   |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-rate spread (4)          |   |                     |    |   |   |   |   |   |   |   | 2.92 | % |   |   |   |   |   |   |   |   |   |   | 2.55 | % |   |   |   |   |   |   |   |   |   |   | 2.78 | % |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest margin (2) (5)       |   |                     |    |   |   |   |   |   |   |   | 2.98 | % |   |   |   |   |   |   |   |   |   |   | 3.03 | % |   |   |   |   |   |   |   |   |   |   | 3.49 | % |
|                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio of average interest-earning |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| assets to average                 |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| interest-bearing                  |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| liabilities                       |   |                     | 102.24  | % |   |   |   |   |   |   |   |   |   |   | 114.06 | % |   |   |   |   |   |   |   |   |   |   | 117.37 | % |   |   |   |   |   |   |   |   |

----

|   | (1) | Average loan balances include nonaccrual loans, which averaged (in thousands) $7,031, $5,130, and $5,853 in 2009, 2008, and 2007, respectively.  Average loans are net of deferred fees.  Loan fees (in thousands) were $206, $416, and $536 in 2009, 2008, and 2007, respectively.  Loan yields have been reported in total since a substantial portion of loans are secured by real estate. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Tax-exempt income has been adjusted to a tax-equivalent basis using an incremental rate of 37.6%.  Includes interest-earning deposits. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Includes federal funds sold. |
|--------|-----|------------------------------|

|   | (4) | Interest-rate spread represents the difference between the average yield on interest-earning assets and the average cost of interest-bearing liabilities. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | Net interest margin is net interest income divided by average interest-earning assets. |
|--------|-----|----------------------------------------------------------------------------------------|

----

Table of Contents

|   | Rate/Volume Analysis (dollars in thousands): |
|--------|----------------------------------------------|

|                               |   | Year Ended December 31,    |   |
|------------------------------------|--------|----------------------------|--------|
|                               |   | 2009 vs. 2008              |   |
|                               |   | Increase (Decrease) Due to |   |
|                               |   |                       |   |   |   |   |   | Rate/ |   |   |   |   |
|                               |   | Rate                       |   |   | Volume |   |   | Volume |   |   | Total |   |
| Interest-earning assets:           |   |                       |   |   |   |   |   |   |   |   |   |   |
| Loans (1)                          |   | $                          | (1,433 | ) |   | $ | 168 |   |   | $ | (18 | ) |   | $ | (1,283 | ) |
| Securities and other deposits      |   |                       | (398   | ) |   |   | 360 |   |   |   | (85 | ) |   |   | (123 | ) |
| Other interest-earning assets (2)  |   |                       | (31    | ) |   |   | (25 | ) |   |   | 22 |   |   |   | (34 | ) |
| Total interest-earning assets      |   |                       | (1,862 | ) |   |   | 503 |   |   |   | (81 | ) |   |   | (1,440 | ) |
|                               |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:      |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                    |   |                       | (270   | ) |   |   | 1,103 |   |   |   | (300 | ) |   |   | 533 |   |
| Savings                            |   |                       | (3     | ) |   |   | (1 | ) |   |   | - |   |   |   | (4 | ) |
| Certificates of deposit            |   |                       | (1,766 | ) |   |   | (359 | ) |   |   | 94 |   |   |   | (2,031 | ) |
| Other borrowings                   |   |                       | 87     |   |   |   | (154 | ) |   |   | (21 | ) |   |   | (88 | ) |
|                               |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities |   |                       | (1,952 | ) |   |   | 589 |   |   |   | (227 | ) |   |   | (1,590 | ) |
|                               |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                |   | $                          | 90     |   |   | $ | (86 | ) |   | $ | 146 |   |   | $ | 150 |   |

|                               |   | Year Ended December 31,    |   |
|------------------------------------|--------|----------------------------|--------|
|                               |   | 2008 vs. 2007              |   |
|                               |   | Increase (Decrease) Due to |   |
|                               |   |                       |   |   |   |   |   | Rate/ |   |   |   |   |
|                               |   | Rate                       |   |   | Volume |   |   | Volume |   |   | Total |   |
| Interest-earning assets:           |   |                       |   |   |   |   |   |   |   |   |   |   |
| Loans (1)                          |   | $                          | (2,698 | ) |   | $ | 1,312 |   |   | $ | (232 | ) |   | $ | (1,618 | ) |
| Securities and other deposits      |   |                       | (12    | ) |   |   | (213 | ) |   |   | 2 |   |   |   | (223 | ) |
| Other interest-earning assets (2)  |   |                       | (154   | ) |   |   | (117 | ) |   |   | 79 |   |   |   | (192 | ) |
| Total interest-earning assets      |   |                       | (2,864 | ) |   |   | 982 |   |   |   | (151 | ) |   |   | (2,033 | ) |
|                               |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:      |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                    |   |                       | (669   | ) |   |   | (29 | ) |   |   | 11 |   |   |   | (687 | ) |
| Savings                            |   |                       | (15    | ) |   |   | (11 | ) |   |   | 3 |   |   |   | (23 | ) |
| Certificates of deposit            |   |                       | (780   | ) |   |   | 899 |   |   |   | (104 | ) |   |   | 15 |   |
| Other borrowings                   |   |                       | (452   | ) |   |   | (91 | ) |   |   | 37 |   |   |   | (506 | ) |
|                               |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities |   |                       | (1,916 | ) |   |   | 768 |   |   |   | (53 | ) |   |   | (1,201 | ) |
|                               |   |                       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                |   | $                          | (948   | ) |   | $ | 214 |   |   | $ | (98 | ) |   | $ | (832 | ) |

----

|   | (1) | Average loan balances include nonaccrual loans. |
|--------|-----|-------------------------------------------------|

|   | (2) | Includes federal funds sold. |
|--------|-----|------------------------------|

----

Table of Contents

|                             |   | For the Years Ended December 31, |   |
|----------------------------------|--------|----------------------------------|--------|
|                             |   | 2009                             |   |   | 2008 |   |   | 2007 |   |
| Interest-earning assets:         |   |                             |   |   |   |   |   |   |   |
| Loans, net                       |   |                             | 5.99   | % |   |   | 6.70 | % |   |   | 8.13 | % |
| Investment securities            |   |                             | 4.31   |   |   |   | 5.59 |   |   |   | 5.38 |   |
| Other interest-earning assets    |   |                             | 0.18   |   |   |   | 1.77 |   |   |   | 5.54 |   |
| All interest-earning assets      |   |                             | 5.68   |   |   |   | 6.49 |   |   |   | 7.60 |   |
| Interest-bearing liabilities:    |   |                             |   |   |   |   |   |   |   |   |   |   |
| NOW deposits                     |   |                             | 0.27   |   |   |   | 0.70 |   |   |   | 1.31 |   |
| Money market deposits            |   |                             | 2.23   |   |   |   | 2.77 |   |   |   | 4.22 |   |
| Savings                          |   |                             | 0.99   |   |   |   | 1.10 |   |   |   | 1.49 |   |
| Certificates of deposit          |   |                             | 3.39   |   |   |   | 4.60 |   |   |   | 5.20 |   |
| Other borrowings                 |   |                             | 3.36   |   |   |   | 2.95 |   |   |   | 4.92 |   |
| All interest-bearing liabilities |   |                             | 2.76   |   |   |   | 3.94 |   |   |   | 4.82 |   |
| Interest-rate spread             |   |                             | 2.92   |   |   |   | 2.55 |   |   |   | 2.78 |   |
| Net interest margin              |   |                             | 2.98   |   |   |   | 3.03 |   |   |   | 3.49 |   |

|                            |   | At December 31, |    |
|---------------------------------|--------|-----------------|---------|
|                            |   | 2009            |    |   | 2008 |   |   | 2007 |   |
|                            |   |            |    |   | Percent |   |   |   |   |   | Percent |   |   |   |   |   | Percent |   |
|                            |   | Average         |    |   | to |   |   | Average |   |   | to |   |   | Average |   |   | to |   |
|                            |   | Balance         |    |   | Total |   |   | Balance |   |   | Total |   |   | Balance |   |   | Total |   |
| Interest-earning assets:        |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net                      |   | $               | 206,188 |   |   |   | 81.9 | % |   | $ | 203,675 |   |   |   | 83.9 | % |   | $ | 187,544 |   |   |   | 80.4 | % |
| Investment securities           |   |            | 45,015  |   |   |   | 17.9 | % |   |   | 36,995 |   |   |   | 15.3 | % |   |   | 41,696 |   |   |   | 17.9 | % |
| Other                           |   |            | 549     |   |   |   | 0.2 | % |   |   | 1,978 |   |   |   | 0.8 | % |   |   | 4,099 |   |   |   | 1.7 | % |
|                            |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-earning assets   |   | $               | 251,752 |   |   |   | 100.0 | % |   | $ | 242,648 |   |   |   | 100.0 | % |   | $ | 233,339 |   |   |   | 100.0 | % |
|                            |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing deposits:      |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                 |   | $               | 88,744  |   |   |   | 31.6 | % |   | $ | 42,108 |   |   |   | 17.5 | % |   | $ | 42,858 |   |   |   | 18.8 | % |
| Savings                         |   |            | 2,858   |   |   |   | 1.0 | % |   |   | 2,988 |   |   |   | 1.2 | % |   |   | 3,751 |   |   |   | 1.7 | % |
| Certificates of deposit         |   |            | 138,791 |   |   |   | 49.5 | % |   |   | 146,595 |   |   |   | 61.0 | % |   |   | 129,313 |   |   |   | 56.7 | % |
|                            |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing deposits |   |            | 230,393 |   |   |   | 82.1 | % |   |   | 191,691 |   |   |   | 79.7 | % |   |   | 175,922 |   |   |   | 77.2 | % |
|                            |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing deposits    |   |            | 34,438  |   |   |   | 12.3 | % |   |   | 27,504 |   |   |   | 11.5 | % |   |   | 29,335 |   |   |   | 12.9 | % |
|                            |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits                  |   |            | 264,831 |   |   |   | 94.4 | % |   |   | 219,195 |   |   |   | 91.2 | % |   |   | 205,257 |   |   |   | 90.1 | % |
|                            |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other borrowings                |   |            | 15,833  |   |   |   | 5.6 | % |   |   | 21,046 |   |   |   | 8.8 | % |   |   | 22,888 |   |   |   | 9.9 | % |
|                            |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits and              |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other borrowings                |   | $               | 280,664 |   |   |   | 100.0 | % |   | $ | 240,241 |   |   |   | 100.0 | % |   | $ | 228,145 |   |   |   | 100.0 | % |

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Table of Contents

|                     |   | At December 31, |    |
|--------------------------|--------|-----------------|---------|
|                     |   | 2009            |    |   | % |   |   | 2008 |   |   | % |   |   | 2007 |   |   | % |   |   | 2006 |   |   | % |   |   | 2005 |   |   | % |   |
| Real estate              |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction, land       |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| development,             |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and other land           |   | $               | 32,455  |   |   |   | 16 | % |   | $ | 39,135 |   |   |   | 19 | % |   | $ | 53,197 |   |   |   | 25 | % |   | $ | 51,598 |   |   |   | 29 | % |   | $ | 37,905 |   |   |   | 25 | % |
| 1-4 family residential   |   |            | 56,900  |   |   |   | 28 | % |   |   | 57,814 |   |   |   | 28 | % |   |   | 45,708 |   |   |   | 23 | % |   |   | 38,018 |   |   |   | 22 | % |   |   | 31,997 |   |   |   | 21 | % |
| Multifamily residential  |   |            | 2,902   |   |   |   | 1 | % |   |   | 4,481 |   |   |   | 2 | % |   |   | 1,784 |   |   |   | 1 | % |   |   | 2,489 |   |   |   | 1 | % |   |   | 3,051 |   |   |   | 2 | % |
| Commercial               |   |            | 93,455  |   |   |   | 47 | % |   |   | 88,762 |   |   |   | 43 | % |   |   | 86,785 |   |   |   | 42 | % |   |   | 68,588 |   |   |   | 39 | % |   |   | 62,612 |   |   |   | 41 | % |
| Total real estate        |   |            | 185,712 |   |   |   | 92 | % |   |   | 190,192 |   |   |   | 92 | % |   |   | 187,474 |   |   |   | 91 | % |   |   | 160,693 |   |   |   | 91 | % |   |   | 135,565 |   |   |   | 89 | % |
| Commercial               |   |            | 11,703  |   |   |   | 6 | % |   |   | 13,314 |   |   |   | 6 | % |   |   | 11,485 |   |   |   | 6 | % |   |   | 11,214 |   |   |   | 6 | % |   |   | 11,901 |   |   |   | 8 | % |
| Consumer and other loans |   |            | 3,315   |   |   |   | 2 | % |   |   | 3,548 |   |   |   | 2 | % |   |   | 5,138 |   |   |   | 3 | % |   |   | 5,828 |   |   |   | 3 | % |   |   | 5,400 |   |   |   | 3 | % |
| Total loans              |   |            | 200,730 |   |   |   | 100 | % |   |   | 207,054 |   |   |   | 100 | % |   |   | 204,097 |   |   |   | 100 | % |   |   | 177,735 |   |   |   | 100 | % |   |   | 152,866 |   |   |   | 100 | % |
| Less:                    |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Less, deferred fees      |   |            | (12     | ) |   |   |   |   |   |   | (25 | ) |   |   |   |   |   |   | (37 | ) |   |   |   |   |   |   | (27 | ) |   |   |   |   |   |   | (63 | ) |   |   |   |   |
| Less, allowance for      |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| loan losses              |   |            | (6,531  | ) |   |   |   |   |   |   | (3,999 | ) |   |   |   |   |   |   | (2,169 | ) |   |   |   |   |   |   | (1,599 | ) |   |   |   |   |   |   | (1,552 | ) |   |   |   |   |
|                     |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                     |   | $               | 194,187 |   |   |   |   |   |   | $ | 203,030 |   |   |   |   |   |   | $ | 201,891 |   |   |   |   |   |   | $ | 176,109 |   |   |   |   |   |   | $ | 151,251 |   |   |   |   |   |

|                                   |   | 1 Year  |   |   | 1 Through |   |   | After        |   |   |   |   |
|----------------------------------------|--------|--------------|--------|--------|----------------|--------|--------|--------------|--------|--------|--------|--------|
|                                   |   | or Less |   |   | 5 Years        |   |   | 5 Years |   |   | Total  |   |
| Real estate                            |   |         |   |   |           |   |   |         |   |   |   |   |
| Construction, land development,        |   |         |   |   |           |   |   |         |   |   |   |   |
| and other land                         |   | $            | 18,734 |   |           | $      | 12,256 |         |   | $      | 1,465  |   |   | $ | 32,455 |   |
| 1-4 family residential                 |   |         | 30,616 |   |           |   | 14,523 |         |   |   | 11,761 |   |   |   | 56,900 |   |
| Multifamily residential                |   |         | 1,349  |   |           |   | 360    |         |   |   | 1,193  |   |   |   | 2,902 |   |
| Commercial                             |   |         | 21,231 |   |           |   | 42,801 |         |   |   | 29,423 |   |   |   | 93,455 |   |
| Total real estate                      |   |         | 71,930 |   |           |   | 69,940 |         |   |   | 43,842 |   |   |   | 185,712 |   |
| Commercial                             |   |         | 4,486  |   |           |   | 6,021  |         |   |   | 1,196  |   |   |   | 11,703 |   |
| Consumer and other loans               |   |         | 695    |   |           |   | 2,380  |         |   |   | 240    |   |   |   | 3,315 |   |
|                                   |   |         |   |   |           |   |   |         |   |   |   |   |   |   |   |   |
| Total loan portfolio                   |   | $            | 77,111 |   |           | $      | 78,341 |         |   | $      | 45,278 |   |   | $ | 200,730 |   |
|                                   |   |         |   |   |           |   |   |         |   |   |   |   |   |   |   |   |
| Loans with maturities over one year:   |   |         |   |   |           |   |   |         |   |   |   |   |   |   |   |   |
| Fixed rate                             |   |         |   |   |           |   |   |         |   |   |   |   |   | $ | 78,478 |   |
| Variable rate                          |   |         |   |   |           |   |   |         |   |   |   |   |   |   | 45,141 |   |
|                                   |   |         |   |   |           |   |   |         |   |   |   |   |   |   |   |   |
| Total maturities greater than one year |   |         |   |   |           |   |   |         |   |   |   |   |   | $ | 123,619 |   |

| Three months or less                    |   | $      | 57,519  |   |
|-----------------------------------------|--------|--------|---------|--------|
| Over three months through twelve months |   |   | 23,128  |   |
| Over one year through three years       |   |   | 68,955  |   |
| Over three through five years           |   |   | 28,418  |   |
| Over five years                         |   |   | 15,995  |   |
|                                    |   |   |    |   |
|                                    |   | $      | 194,015 |   |

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Table of Contents

|                                           |   | Years Ended December 31, |    |
|------------------------------------------------|--------|--------------------------|---------|
|                                           |   | 2009                     |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Originations:                                  |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate loans                              |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction, land development, and other land |   | $                        | 743     |   |   | $ | 8,052 |   |   | $ | 19,007 |   |   | $ | 39,551 |   |   | $ | 33,561 |   |
| 1-4 family residential                         |   |                     | 1,537   |   |   |   | 14,563 |   |   |   | 13,262 |   |   |   | 15,744 |   |   |   | 12,518 |   |
| Multifamily residential                        |   |                     | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                     |   |                     | 4,763   |   |   |   | 2,946 |   |   |   | 18,632 |   |   |   | 17,548 |   |   |   | 13,180 |   |
|                                           |   |                     | 7,043   |   |   |   | 25,561 |   |   |   | 50,901 |   |   |   | 72,843 |   |   |   | 59,259 |   |
| Commercial                                     |   |                     | 1,846   |   |   |   | 2,971 |   |   |   | 2,678 |   |   |   | 4,452 |   |   |   | 4,364 |   |
| Consumer and other loans                       |   |                     | 1,160   |   |   |   | 835 |   |   |   | 2,047 |   |   |   | 2,807 |   |   |   | 2,263 |   |
| Total                                          |   |                     | 10,049  |   |   |   | 29,367 |   |   |   | 55,626 |   |   |   | 80,102 |   |   |   | 65,886 |   |
| Principal reductions, net (1)                  |   |                     | (16,373 | ) |   |   | (26,410 | ) |   |   | (29,264 | ) |   |   | (55,233 | ) |   |   | (42,895 | ) |
|                                           |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Increase (decrease) in total loans             |   | $                        | (6,324  | ) |   | $ | 2,957 |   |   | $ | 26,362 |   |   | $ | 24,869 |   |   | $ | 22,991 |   |

| (1) | Includes charge-offs, loans transferred to other real estate owned, and advances and repayments on revolving lines of credit. |
|-----|-------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

| · | the loan’s market price; or |
|--------|-----------------------------------|

| · | the discounted fair value of the loan’s collateral, less estimated costs to sell, if the collateral is expected to be the sole source of repayment. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | we receive physical possession of a debtor’s assets regardless of whether formal foreclosure proceedings have been initiated or completed; or |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the debtor has effectively surrendered control of the underlying collateral in contemplation of foreclosure. |
|--------|--------------------------------------------------------------------------------------------------------------|

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Table of Contents

|                                           |   | Asset Classifications |   |
|------------------------------------------------|--------|-----------------------|--------|
| Assets Classified by FDICin November 2008 Exam |   | Substandard           |   |   | Doubtful |   |   | Loss |   |   | Total |   |
| Commercial real estate                         |   | $                     | 19,422 |   |   | $ | - |   |   | $ | 1,110 |   |   | $ | 20,532 |   |
| Residential real estate                        |   |                  | 1,472  |   |   |   | - |   |   |   | - |   |   |   | 1,472 |   |
| Total real estate                              |   |                  | 20,894 |   |   |   | - |   |   |   | 1,110 |   |   |   | 22,004 |   |
| Commercial                                     |   |                  | 2,584  |   |   |   | - |   |   |   | 93 |   |   |   | 2,677 |   |
| Consumer and other loans                       |   |                  | 69     |   |   |   | - |   |   |   | 14 |   |   |   | 83 |   |
| Total                                          |   |                  | 23,547 |   |   |   | - |   |   |   | 1,217 |   |   |   | 24,764 |   |
| Other real estate owned                        |   |                  | 2,967  |   |   |   | - |   |   |   | 781 |   |   |   | 3,748 |   |
| Other foreclosed assets                        |   |                  | 75     |   |   |   | - |   |   |   | - |   |   |   | 75 |   |
|                                           |   | $                     | 26,589 |   |   | $ | - |   |   | $ | 1,998 |   |   | $ | 28,587 |   |

|                     |   | Classified Loans |   |   | OREO   |   |
|--------------------------|--------|------------------|--------|--------|--------|--------|
| Commercial real estate   |   | $                | 19,989 |   |   |   | 85 | % |   | $ | 2,444 |   |   |   | 76 | % |
| Residential real estate  |   |             | 880    |   |   |   | 4 | % |   |   | 790 |   |   |   | 24 | % |
| Commercial               |   |             | 2,557  |   |   |   | 11 | % |   |   | - |   |   |   | 0 | % |
| Consumer and other loans |   |             | -      |   |   |   | 0 | % |   |   | - |   |   |   | 0 | % |
|                     |   | $                | 23,426 |   |   |   | 100 | % |   | $ | 3,234 |   |   |   | 100 | % |

----

Table of Contents

|                                                                 |   | Amount |   |   | % of Write-downs/Reserves toTotal RemainingBalances |   |
|----------------------------------------------------------------------|--------|--------|--------|--------|-----------------------------------------------------|--------|
| Remaining balances of loans identified by FDIC in November 2008 Exam |   | $      | 16,551 |   |                                                |   |   |
| Direct write-downs                                                   |   |   | (3,007 | )      |                                                |   | 18 | % |
| Subtotal                                                             |   |   | 13,544 |   |                                                |   |   |   |
| Specific reserves                                                    |   |   | (1,275 | )      |                                                |   | 8 | % |
| Net                                                                  |   | $      | 12,269 |   |                                                |   |   |   |

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Table of Contents

| As of December 31, 2009  |   | Past Due30-89 Daysand StillAccruing |   |   | % ofTotalLoans |   |   | Past Due90 or MoreDays andStillAccruing |   |   | % ofTotalLoans |   |   | Non-accrualLoans |   |   | % ofTotalLoans |   |   | TotalPast DueLoans |   |   | % ofTotalLoans |   |
|--------------------------|--------|------------------------------------------|--------|--------|----------------|--------|--------|---------------------------------------------------|--------|--------|---------------------|--------|--------|------------------|--------|--------|---------------------|--------|--------|-------------------------|--------|--------|---------------------|--------|
| Real estate:             |   |                                     |   |   |           |   |   |                                              |   |   |                |   |   |             |   |   |                |   |   |                    |   |   |                |   |
| Construction, land       |   |                                     |   |   |           |   |   |                                              |   |   |                |   |   |             |   |   |                |   |   |                    |   |   |                |   |
| development and other    |   |                                     |   |   |           |   |   |                                              |   |   |                |   |   |             |   |   |                |   |   |                    |   |   |                |   |
| land                     |   | $                                        | 89     |   |           |   | 0.27   | %                                                 |   | $      | 7                   |   |   |             | 0.02   | %      |                | $      | 2,019  |                    |   |   | 6.22                | %      |   | $ | 2,115 |   |   |   | 6.51 | % |
| 1-4 family residential   |   |                                     | 724    |   |           |   | 1.27   | %                                                 |   |   | -                   |   |   |             | 0.00   | %      |                |   | 3,133  |                    |   |   | 5.51                | %      |   |   | 3,857 |   |   |   | 6.78 | % |
| Multifamily residential  |   |                                     | -      |   |           |   | 0.00   | %                                                 |   |   | -                   |   |   |             | 0.00   | %      |                |   | 1,350  |                    |   |   | 46.52               | %      |   |   | 1,350 |   |   |   | 46.52 | % |
| Commercial               |   |                                     | 543    |   |           |   | 0.58   | %                                                 |   |   | -                   |   |   |             | 0.00   | %      |                |   | 213    |                    |   |   | 0.23                | %      |   |   | 756 |   |   |   | 0.81 | % |
| Total real estate        |   |                                     | 1,356  |   |           |   | 0.73   | %                                                 |   |   | 7                   |   |   |             | 0.00   | %      |                |   | 6,715  |                    |   |   | 3.62                | %      |   |   | 8,078 |   |   |   | 4.35 | % |
| Commercial               |   |                                     | 140    |   |           |   | 1.20   | %                                                 |   |   | -                   |   |   |             | 0.00   | %      |                |   | -      |                    |   |   | 0.00                | %      |   |   | 140 |   |   |   | 1.20 | % |
| Consumer and other loans |   |                                     | 58     |   |           |   | 1.75   | %                                                 |   |   | 1                   |   |   |             | 0.00   | %      |                |   | -      |                    |   |   | 0.00                | %      |   |   | 59 |   |   |   | 1.75 | % |
| Total loans              |   | $                                        | 1,554  |   |           |   | 0.77   | %                                                 |   | $      | 8                   |   |   |             | 0.00   | %      |                | $      | 6,715  |                    |   |   | 3.35                | %      |   | $ | 8,277 |   |   |   | 4.12 | % |

| As of December 31, 2008  |   | Past Due30-89 Daysand StillAccruing |   |   | % ofTotalLoans |   |   | Past Due90 or MoreDays andStillAccruing |   |   | % ofTotalLoans |   |   | Non-accrualLoans |   |   | % ofTotalLoans |   |   | TotalPast DueLoans |   |   | % ofTotalLoans |   |
|--------------------------|--------|------------------------------------------|--------|--------|----------------|--------|--------|---------------------------------------------------|--------|--------|----------------|--------|--------|------------------|--------|--------|----------------|--------|--------|--------------------|--------|--------|----------------|--------|
| Real estate:             |   |                                     |   |   |           |   |   |                                              |   |   |           |   |   |             |   |   |           |   |   |               |   |   |           |   |
| Construction, land       |   |                                     |   |   |           |   |   |                                              |   |   |           |   |   |             |   |   |           |   |   |               |   |   |           |   |
| development and other    |   |                                     |   |   |           |   |   |                                              |   |   |           |   |   |             |   |   |           |   |   |               |   |   |           |   |
| land                     |   | $                                        | 1,103  |   |           |   | 2.82   | %                                                 |   | $      | 1,451          |   |   |             | 3.71   | %      |           | $      | 3,793  |               |   |   | 9.69           | %      |   | $ | 6,347 |   |   |   | 16.22 | % |
| 1-4 family residential   |   |                                     | 230    |   |           |   | 0.40   | %                                                 |   |   | -              |   |   |             | 0.00   | %      |           |   | 1,638  |               |   |   | 2.83           | %      |   |   | 1,868 |   |   |   | 3.23 | % |
| Multifamily residential  |   |                                     | -      |   |           |   | 0.00   | %                                                 |   |   | -              |   |   |             | 0.00   | %      |           |   | -      |               |   |   | 0.00           | %      |   |   | - |   |   |   | 0.00 | % |
| Commercial               |   |                                     | 1,740  |   |           |   | 1.96   | %                                                 |   |   | 205            |   |   |             | 0.23   | %      |           |   | -      |               |   |   | 0.00           | %      |   |   | 1,945 |   |   |   | 2.19 | % |
| Total real estate        |   |                                     | 3,073  |   |           |   | 1.62   | %                                                 |   |   | 1,656          |   |   |             | 0.87   | %      |           |   | 5,431  |               |   |   | 2.86           | %      |   |   | 10,160 |   |   |   | 5.35 | % |
| Commercial               |   |                                     | 242    |   |           |   | 1.82   | %                                                 |   |   | -              |   |   |             | 0.00   | %      |           |   | -      |               |   |   | 0.00           | %      |   |   | 242 |   |   |   | 1.82 | % |
| Consumer and other loans |   |                                     | 25     |   |           |   | 0.70   | %                                                 |   |   | -              |   |   |             | 0.00   | %      |           |   | 28     |               |   |   | 0.79           | %      |   |   | 53 |   |   |   | 1.49 | % |
| Total loans              |   | $                                        | 3,340  |   |           |   | 1.61   | %                                                 |   | $      | 1,656          |   |   |             | 0.80   | %      |           | $      | 5,459  |               |   |   | 2.64           | %      |   | $ | 10,455 |   |   |   | 5.05 | % |

| Increase (Decreases)     |   | Past Due30-89 Daysand StillAccruing |   |   | Past Due90 or MoreDays andStillAccruing |   |   | Non-accrualLoans |   |   | TotalPast DueLoans |   |
|--------------------------|--------|------------------------------------------|--------|--------|-----------------------------------------|--------|--------|------------------|--------|--------|--------------------|--------|
| Real estate:             |   |                                     |   |   |                                    |   |   |             |   |   |               |   |
| Real estate:             |   |                                     |   |   |                                    |   |   |             |   |   |               |   |
| Construction, land       |   |                                     |   |   |                                    |   |   |             |   |   |               |   |
| development and other    |   |                                     |   |   |                                    |   |   |             |   |   |               |   |
| land                     |   | $                                        | (1,014 | )      |                                    | $      | (1,444 | )                |   | $      | (1,774             | )      |   | $ | (4,232 | ) |
| 1-4 family residential   |   |                                     | 494    |   |                                    |   | -      |             |   |   | 1,495              |   |   |   | 1,989 |   |
| Multifamily residential  |   |                                     | -      |   |                                    |   | -      |             |   |   | 1,350              |   |   |   | 1,350 |   |
| Commercial               |   |                                     | (1,197 | )      |                                    |   | (205   | )                |   |   | 213                |   |   |   | (1,189 | ) |
| Total real estate        |   |                                     | (1,717 | )      |                                    |   | (1,649 | )                |   |   | 1,284              |   |   |   | (2,082 | ) |
| Commercial               |   |                                     | (102   | )      |                                    |   | -      |             |   |   | -                  |   |   |   | (102 | ) |
| Consumer and other loans |   |                                     | 33     |   |                                    |   | 1      |             |   |   | (28                | )      |   |   | 6 |   |
| Total loans              |   | $                                        | (1,786 | )      |                                    | $      | (1,648 | )                |   | $      | 1,256              |   |   | $ | (2,178 | ) |

----

Table of Contents

| · | Recent historical loss data over the past five quarters is used as a starting point for estimating current losses; |
|--------|--------------------------------------------------------------------------------------------------------------------|

| · | We consider various economic and other qualitative factors affecting loan quality including changes in: |
|--------|---------------------------------------------------------------------------------------------------------|

|   | o | the volume (and trends) of delinquent and monitored loans, |
|--------|---|------------------------------------------------------------|

|   | o | lending policies, |
|--------|---|-------------------|

|   | o | underlying collateral values, |
|--------|---|-------------------------------|

|   | o | concentrations in risk and levels of concentration risks, |
|--------|---|-----------------------------------------------------------|

|   | o | quality of internal and external loan reviews, which includes risk-rating our loans according to federal regulatory guidelines, |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------|

|   | o | competition and regulatory factors, |
|--------|---|-------------------------------------|

|   | o | lending staff experience, |
|--------|---|---------------------------|

|   | o | business and economic conditions, and |
|--------|---|---------------------------------------|

|   | o | other factors. |
|--------|---|----------------|

| · | In developing loss factors, we consider both internal historical data and external data such as changes in leading economic indicators, consumer price indices, delinquencies, employment data, cap rates, occupancy levels, rental rates, and single-family homes and condominium sales prices and sales activity. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | the frequency of internal and external loan reviews, |
|--------|------------------------------------------------------|

| · | obtaining appraisals or evaluations for monitored loans, |
|--------|----------------------------------------------------------|

| · | classifying loans from accrual to nonaccrual status (which is typically done when a loan reaches 90 days past due unless well-secured and in process of collection), |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | recognizing loan charge-offs on impaired loans, and |
|--------|-----------------------------------------------------|

| · | exercising judgment in determining the allowance for loan losses consistent with generally accepted accounting principles. |
|--------|----------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                                       |   | December 31, |    |
|------------------------------------------------------------|--------|--------------|---------|
|                                                       |   | 2009         |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
| Nonaccrual loans                                           |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction, land development, and other land             |   | $            | 2,019   |   |   | $ | 3,793 |   |   | $ | 4,008 |   |   | $ | - |   |   | $ | - |   |
| 1-4 family residential                                     |   |         | 3,133   |   |   |   | 1,638 |   |   |   | 1,919 |   |   |   | - |   |   |   | - |   |
| Multifamily residential                                    |   |         | 1,350   |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                 |   |         | 213     |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total real estate                                          |   |         | 6,715   |   |   |   | 5,431 |   |   |   | 5,927 |   |   |   | - |   |   |   | - |   |
| Commercial                                                 |   |         | -       |   |   |   | - |   |   |   | 295 |   |   |   | 53 |   |   |   | 202 |   |
| Consumer and other loans                                   |   |         | -       |   |   |   | 28 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                      |   | $            | 6,715   |   |   | $ | 5,459 |   |   | $ | 6,222 |   |   | $ | 53 |   |   | $ | 202 |   |
|                                                       |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans 90 days or more past due and still on accrual status |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction, land development, and other land             |   | $            | -       |   |   | $ | 1,451 |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| 1-4 family residential                                     |   |         | 7       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Multifamily residential                                    |   |         | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                                 |   |         | -       |   |   |   | 205 |   |   |   | 164 |   |   |   | - |   |   |   | - |   |
| Total real estate                                          |   |         | 7       |   |   |   | 1,656 |   |   |   | 164 |   |   |   | - |   |   |   | - |   |
| Commercial                                                 |   |         | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Consumer and other loans                                   |   |         | 1       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                                      |   | $            | 8       |   |   | $ | 1,656 |   |   | $ | 164 |   |   | $ | - |   |   | $ | - |   |
|                                                       |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total nonperforming loans                                  |   | $            | 6,723   |   |   | $ | 7,115 |   |   | $ | 6,386 |   |   | $ | 53 |   |   | $ | 202 |   |
| Foreclosed real estate                                     |   |         | 1,727   |   |   |   | 3,421 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Repossessed assets                                         |   |         | -       |   |   |   | 75 |   |   |   | 9 |   |   |   | 13 |   |   |   | - |   |
| Total nonperforming assets                                 |   | $            | 8,450   |   |   | $ | 10,611 |   |   | $ | 6,395 |   |   | $ | 66 |   |   | $ | 202 |   |
|                                                       |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restructured loans                                         |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1 to 4 family                                              |   | $            | 5,968   |   |   | $ | 692 |   |   | $ |   | * |   | $ |   | * |   | $ |   | * |
| All other                                                  |   |         | 11,404  |   |   |   | 2,874 |   |   |   | 4,491 |   |   |   | * |   |   |   | * |   |
| Total restructured loans                                   |   | $            | 17,372  |   |   | $ | 3,566 |   |   | $ |   | * |   | $ |   | * |   | $ |   | * |
|                                                       |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total nonperforming assets                                 |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and restructured loans                                     |   | $            | 25,822  |   |   | $ | 14,177 |   |   | $ | 10,886 |   |   | $ | 66 |   |   | $ | 202 |   |
|                                                       |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restructured loans included in nonaccrual loans            |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| above that are considered troubled debt                    |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| restructurings                                             |   | $            | 1,842   |   |   | $ | 4,386 |   |   | $ | 782 |   |   | $ | - |   |   | $ | - |   |
|                                                       |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios                                                     |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                                                |   | $            | 200,718 |   |   | $ | 207,029 |   |   | $ | 204,060 |   |   | $ | 177,708 |   |   | $ | 152,803 |   |
| Total assets                                               |   | $            | 297,366 |   |   | $ | 267,973 |   |   | $ | 261,406 |   |   | $ | 243,497 |   |   | $ | 213,880 |   |
| Total nonperforming loans to total loans                   |   |         | 3.35    | % |   |   | 3.44 | % |   |   | 3.13 | % |   |   | 0.04 | % |   |   | 0.13 | % |
| Total nonperforming assets to total assets                 |   |         | 2.84    | % |   |   | 3.96 | % |   |   | 2.45 | % |   |   | 0.03 | % |   |   | 0.09 | % |
| Total nonperforming assets and                             |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| restructured loans to total assets                         |   |         | 8.68    | % |   |   | 5.29 | % |   |   | 4.16 | % |   |   | 0.03 | % |   |   | 0.09 | % |

| * | Data not reported in 2006-2007 - not material |
|---|-----------------------------------------------|

----

Table of Contents

|                                                   |   | December 31, |    |
|--------------------------------------------------------|--------|--------------|---------|
|                                                   |   | 2009         |    |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                                                   |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses at beginning of year         |   | $            | 3,999   |   |   | $ | 2,169 |   |   | $ | 1,599 |   |   | $ | 1,552 |   |   | $ | 1,296 |   |
|                                                   |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Charge-offs for the year-to-date                       |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction, land development, and other land         |   |         | (135    | ) |   |   | (190 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| 1-4 family residential                                 |   |         | (1,317  | ) |   |   | (679 | ) |   |   | - |   |   |   | - |   |   |   | (36 | ) |
| Multifamily residential                                |   |         | (2,040  | ) |   |   | (1,110 | ) |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                             |   |         | (156    | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total real estate                                      |   |         | (3,648  | ) |   |   | (1,979 | ) |   |   | - |   |   |   | - |   |   |   | (36 | ) |
| Commercial                                             |   |         | (39     | ) |   |   | (501 | ) |   |   | (49 | ) |   |   | (169 | ) |   |   | - |   |
| Consumer and other loans                               |   |         | (74     | ) |   |   | (135 | ) |   |   | (26 | ) |   |   | (12 | ) |   |   | (50 | ) |
| Total charge-offs                                      |   |         | (3,761  | ) |   |   | (2,615 | ) |   |   | (75 | ) |   |   | (181 | ) |   |   | (86 | ) |
|                                                   |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries for the year-to-date                        |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Construction, land development, and other land         |   |         | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| 1-4 family residential                                 |   |         | 1       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| Multifamily residential                                |   |         | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Commercial                                             |   |         | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total real estate                                      |   |         | 1       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1 |   |
| Commercial                                             |   |         | 11      |   |   |   | 19 |   |   |   | 11 |   |   |   | 31 |   |   |   | - |   |
| Consumer and other loans                               |   |         | 13      |   |   |   | 2 |   |   |   | 5 |   |   |   | 3 |   |   |   | 7 |   |
| Total recoveries                                       |   |         | 25      |   |   |   | 21 |   |   |   | 16 |   |   |   | 34 |   |   |   | 8 |   |
| Net charge-offs for the year-to-date                   |   |         | (3,736  | ) |   |   | (2,594 | ) |   |   | (59 | ) |   |   | (147 | ) |   |   | (78 | ) |
| Provision for loan losses for the year-to-date         |   |         | 6,268   |   |   |   | 4,424 |   |   |   | 629 |   |   |   | 194 |   |   |   | 334 |   |
| Allowance for loan losses at end of year               |   | $            | 6,531   |   |   | $ | 3,999 |   |   | $ | 2,169 |   |   | $ | 1,599 |   |   | $ | 1,552 |   |
|                                                   |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratios                                                 |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total loans                                            |   | $            | 200,718 |   |   | $ | 207,029 |   |   | $ | 204,060 |   |   | $ | 177,708 |   |   | $ | 152,803 |   |
| Average loans                                          |   | $            | 206,188 |   |   | $ | 203,675 |   |   | $ | 187,544 |   |   | $ | 167,883 |   |   | $ | 141,587 |   |
| Nonperforming loans                                    |   | $            | 6,723   |   |   | $ | 7,155 |   |   | $ | 6,386 |   |   | $ | 53 |   |   | $ | 201 |   |
| Total assets                                           |   | $            | 297,366 |   |   | $ | 267,973 |   |   | $ | 261,406 |   |   | $ | 243,497 |   |   | $ | 213,880 |   |
| Ratio of net charge-offs to average loans outstanding  |   |         | 1.81    | % |   |   | 1.27 | % |   |   | 0.03 | % |   |   | 0.09 | % |   |   | 0.06 | % |
| Ratio of allowance for loan losses to period end loans |   |         | 3.25    | % |   |   | 1.93 | % |   |   | 1.06 | % |   |   | 0.90 | % |   |   | 1.02 | % |
| Ratio of allowance for loan losses                     |   |         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to nonperforming loans                                 |   |         | 97.14   | % |   |   | 55.89 | % |   |   | 33.96 | % |   | NM |   |   | NM |   |

| NM  | Not meaningful |
|----------|----------------|

----

Table of Contents

| ASC 310-10-35            |   | At December 31, |   |
|--------------------------|--------|-----------------|--------|
|                     |   | 2009            |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                     |   |            |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |
|                     |   |            |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |
|                     |   |            |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |
|                     |   | Amount          |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |
| Commercial real estate   |   | $               | 3,547  |   |   |   | 63 | % |   | $ | 1,114 |   |   |   | 62 | % |   | $ | 124 |   |   |   | 68 | % |   | $ | 8 |   |   |   | 68 | % |   | $ | 22 |   |   |   | 66 | % |
| Residential real estate  |   |            | 831    |   |   |   | 29 |   |   |   | 140 |   |   |   | 30 |   |   |   | 366 |   |   |   | 23 |   |   |   | 8 |   |   |   | 23 |   |   |   | 112 |   |   |   | 23 |   |
| Total real estate        |   |            | 4,378  |   |   |   | 92 |   |   |   | 1,254 |   |   |   | 92 |   |   |   | 490 |   |   |   | 91 |   |   |   | 16 |   |   |   | 91 |   |   |   | 134 |   |   |   | 89 |   |
| Commercial               |   |            | -      |   |   |   | 6 |   |   |   | 435 |   |   |   | 6 |   |   |   | 226 |   |   |   | 6 |   |   |   | 119 |   |   |   | 6 |   |   |   | 219 |   |   |   | 8 |   |
| Consumer and other loans |   |            | 2      |   |   |   | 2 |   |   |   | 28 |   |   |   | 2 |   |   |   | 12 |   |   |   | 3 |   |   |   | 23 |   |   |   | 3 |   |   |   | 37 |   |   |   | 3 |   |
| Unallocated              |   |            | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Totals                   |   | $               | 4,380  |   |   |   | 100 | % |   | $ | 1,717 |   |   |   | 100 | % |   | $ | 728 |   |   |   | 100 | % |   | $ | 158 |   |   |   | 100 | % |   | $ | 390 |   |   |   | 100 | % |

| ASC 450-20               |   | At December 31, |   |
|--------------------------|--------|-----------------|--------|
|                     |   | 2009            |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                     |   |            |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |
|                     |   |            |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |
|                     |   |            |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |
|                     |   | Amount          |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |
| Commercial real estate   |   | $               | 504    |   |   |   | 63 | % |   | $ | 993 |   |   |   | 62 | % |   | $ | 1,078 |   |   |   | 67 | % |   | $ | 971 |   |   |   | 68 | % |   | $ | 767 |   |   |   | 66 | % |
| Residential real estate  |   |            | 1,392  |   |   |   | 29 |   |   |   | 819 |   |   |   | 30 |   |   |   | 60 |   |   |   | 24 |   |   |   | 49 |   |   |   | 23 |   |   |   | 267 |   |   |   | 23 |   |
| Total real estate        |   |            | 1,896  |   |   |   | 92 |   |   |   | 1,812 |   |   |   | 92 |   |   |   | 1,138 |   |   |   | 91 |   |   |   | 1,020 |   |   |   | 91 |   |   |   | 1,034 |   |   |   | 89 |   |
| Commercial               |   |            | 194    |   |   |   | 6 |   |   |   | 383 |   |   |   | 6 |   |   |   | 193 |   |   |   | 6 |   |   |   | 242 |   |   |   | 6 |   |   |   | 93 |   |   |   | 8 |   |
| Consumer and other loans |   |            | 61     |   |   |   | 2 |   |   |   | 87 |   |   |   | 2 |   |   |   | 88 |   |   |   | 3 |   |   |   | 44 |   |   |   | 3 |   |   |   | 35 |   |   |   | 3 |   |
| Unallocated              |   |            | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 22 |   |   |   | - |   |   |   | 135 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Totals                   |   | $               | 2,151  |   |   |   | 100 | % |   | $ | 2,282 |   |   |   | 100 | % |   | $ | 1,441 |   |   |   | 100 | % |   | $ | 1,441 |   |   |   | 100 | % |   | $ | 1,162 |   |   |   | 100 | % |

| Total ALLL               |   | At December 31, |   |
|--------------------------|--------|-----------------|--------|
|                     |   | 2009            |   |   | 2008 |   |   | 2007 |   |   | 2006 |   |   | 2005 |   |
|                     |   |            |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |
|                     |   |            |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |   |   |   |   | Loans to |   |
|                     |   |            |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |   |   |   |   | Total |   |
|                     |   | Amount          |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |   | Amount |   |   | Loans |   |
| Commercial real estate   |   | $               | 4,051  |   |   |   | 63 | % |   | $ | 2,107 |   |   |   | 62 | % |   | $ | 1,202 |   |   |   | 67 | % |   | $ | 979 |   |   |   | 68 | % |   | $ | 789 |   |   |   | 66 | % |
| Residential real estate  |   |            | 2,223  |   |   |   | 29 |   |   |   | 959 |   |   |   | 30 |   |   |   | 426 |   |   |   | 24 |   |   |   | 57 |   |   |   | 23 |   |   |   | 379 |   |   |   | 23 |   |
| Total real estate        |   |            | 6,274  |   |   |   | 92 |   |   |   | 3,066 |   |   |   | 92 |   |   |   | 1,628 |   |   |   | 91 |   |   |   | 1,036 |   |   |   | 91 |   |   |   | 1,168 |   |   |   | 89 |   |
| Commercial               |   |            | 194    |   |   |   | 6 |   |   |   | 818 |   |   |   | 6 |   |   |   | 419 |   |   |   | 6 |   |   |   | 361 |   |   |   | 6 |   |   |   | 312 |   |   |   | 8 |   |
| Consumer and other loans |   |            | 63     |   |   |   | 2 |   |   |   | 115 |   |   |   | 2 |   |   |   | 100 |   |   |   | 3 |   |   |   | 67 |   |   |   | 3 |   |   |   | 72 |   |   |   | 3 |   |
| Unallocated              |   |            | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 22 |   |   |   | - |   |   |   | 135 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Totals                   |   | $               | 6,531  |   |   |   | 100 | % |   | $ | 3,999 |   |   |   | 100 | % |   | $ | 2,169 |   |   |   | 100 | % |   | $ | 1,599 |   |   |   | 100 | % |   | $ | 1,552 |   |   |   | 100 | % |

----

Table of Contents

|                                          |   | At December 31, |   |
|-----------------------------------------------|--------|-----------------|--------|
|                                          |   | 2009            |   |   | 2008 |   |   | 2007 |   |
| Securities available-for-sale:                |   |            |   |   |   |   |   |   |   |
| REMICs                                        |   | $               | 137    |   |   | $ | 2,699 |   |   | $ | 3,019 |   |
| MBS                                           |   |            | 42,405 |   |   |   | 12,171 |   |   |   | 22,519 |   |
|                                          |   |            | 42,542 |   |   |   | 14,870 |   |   |   | 25,538 |   |
| Securities held-to-maturity:                  |   |            |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt state, county, and municipal bonds |   |            | 14,989 |   |   |   | 15,536 |   |   |   | 15,762 |   |
| Balance, end of year                          |   | $               | 57,531 |   |   | $ | 30,406 |   |   | $ | 41,300 |   |

|                                          |   | At December 31, |   |
|-----------------------------------------------|--------|-----------------|--------|
|                                          |   | 2009            |   |   | 2008 |   |   | 2007 |   |
| Securities available-for-sale:                |   |            |   |   |   |   |   |   |   |
| REMICs                                        |   | $               | 134    |   |   | $ | 2,700 |   |   | $ | 2,983 |   |
| MBS                                           |   |            | 42,428 |   |   |   | 12,171 |   |   |   | 22,691 |   |
|                                          |   |            | 42,562 |   |   |   | 14,871 |   |   |   | 25,674 |   |
| Securities held-to-maturity:                  |   |            |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt state, county, and municipal bonds |   |            | 14,989 |   |   |   | 15,536 |   |   |   | 15,762 |   |
| Balance, end of year                          |   | $               | 57,551 |   |   | $ | 30,407 |   |   | $ | 41,436 |   |

|                  |   | Due in one   |   |   | Due in One    |   |   | Due in Five  |   |   | Due in Ten    |   |   |   |   |
|-----------------------|--------|--------------|--------|--------|---------------|--------|--------|--------------|--------|--------|---------------|--------|--------|--------|--------|
|                  |   | year or less |   |   | to Five Years |   |   | to Ten Years |   |   | Years or More |   |   | Total  |   |
|                  |   |         |   |   | Average       |   |   |         |   |   | Average       |   |   |   |   |   | Average |   |   |   |   |   | Average |   |   |   |   |   | Average |   |
|                  |   | Amount       |   |   | Yield         |   |   | Amount       |   |   | Yield         |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
| At December 31, 2009: |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REMICs                |   | $            | -      |   |          |   | -      | %            |   | $      | 137           |   |   |   | 3.67   | % |   | $ | - |   |   |   | - | % |   | $ | - |   |   |   | - | % |   | $ | 137 |   |   |   | 3.67 | % |
| MBS                   |   |         | 3,104  |   |          |   | 2.94   | %            |   |   | 4,949         |   |   |   | 4.36   | % |   |   | 20,595 |   |   |   | 3.83 | % |   |   | 13,757 |   |   |   | 3.92 | % |   |   | 42,405 |   |   |   | 3.85 | % |
|                  |   | $            | 3,104  |   |          |   | 2.94   | %            |   | $      | 5,086         |   |   |   | 4.34   | % |   | $ | 20,595 |   |   |   | 3.83 | % |   | $ | 13,757 |   |   |   | 3.92 | % |   | $ | 42,542 |   |   |   | 3.85 | % |
| At December 31, 2008: |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REMICs                |   | $            | -      |   |          |   | -      | %            |   | $      | -             |   |   |   | -      | % |   | $ | 2,123 |   |   |   | 4.01 | % |   | $ | 576 |   |   |   | 4.26 | % |   | $ | 2,699 |   |   |   | 4.06 | % |
| MBS                   |   |         | 639    |   |          |   | 3.77   | %            |   |   | 1,075         |   |   |   | 3.79   | % |   |   | 973 |   |   |   | 4.93 | % |   |   | 9,484 |   |   |   | 4.37 | % |   |   | 12,171 |   |   |   | 4.33 | % |
|                  |   | $            | 639    |   |          |   | 3.77   | %            |   | $      | 1,075         |   |   |   | 3.79   | % |   | $ | 3,096 |   |   |   | 4.93 | % |   | $ | 10,060 |   |   |   | 4.37 | % |   | $ | 14,870 |   |   |   | 4.42 | % |
| At December 31, 2007: |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REMICs                |   | $            | -      |   |          |   | -      | %            |   | $      | -             |   |   |   | -      | % |   | $ | - |   |   |   | - | % |   | $ | 3,019 |   |   |   | 5.64 | % |   | $ | 3,019 |   |   |   | 5.64 | % |
| MBS                   |   |         | 2,803  |   |          |   | 4.08   | %            |   |   | 2,356         |   |   |   | 3.85   | % |   |   | 10,594 |   |   |   | 4.53 | % |   |   | 6,766 |   |   |   | 4.90 | % |   |   | 22,519 |   |   |   | 4.52 | % |
|                  |   | $            | 2,803  |   |          |   | 4.08   | %            |   | $      | 2,356         |   |   |   | 3.85   | % |   | $ | 10,594 |   |   |   | 4.53 | % |   | $ | 9,785 |   |   |   | 4.90 | % |   | $ | 25,538 |   |   |   | 4.56 | % |

|                      |   | Due in one   |   |   | Due in One    |   |   | Due in Five  |   |   | Due in Ten    |   |   |   |   |
|---------------------------|--------|--------------|--------|--------|---------------|--------|--------|--------------|--------|--------|---------------|--------|--------|--------|--------|
|                      |   | year or less |   |   | to Five Years |   |   | to Ten Years |   |   | Years or More |   |   | Total  |   |
|                      |   |         |   |   | Average       |   |   |         |   |   | Average       |   |   |   |   |   | Average |   |   |   |   |   | Average |   |   |   |   |   | Average |   |
|                      |   | Amount       |   |   | Yield         |   |   | Amount       |   |   | Yield         |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
| At December 31, 2009:     |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt state, county, |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and municipal bonds       |   | $            | -      |   |          |   | -      | %            |   | $      | 271           |   |   |   | 4.70   | % |   | $ | 1,163 |   |   |   | 4.84 | % |   | $ | 13,555 |   |   |   | 4.22 | % |   | $ | 14,989 |   |   |   | 4.28 | % |
|                      |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2008:     |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt state, county, |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and municipal bonds       |   | $            | -      |   |          |   | -      | %            |   | $      | -             |   |   |   | -      | % |   | $ | 1,010 |   |   |   | 4.86 | % |   | $ | 14,526 |   |   |   | 4.27 | % |   | $ | 15,536 |   |   |   | 4.31 | % |
|                      |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2007:     |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt state, county, |   |         |   |   |          |   |   |         |   |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and municipal bonds       |   | $            | -      |   |          |   | -      | %            |   | $      | -             |   |   |   | -      | % |   | $ | 1,057 |   |   |   | 4.77 | % |   | $ | 14,705 |   |   |   | 3.97 | % |   | $ | 15,762 |   |   |   | 4.02 | % |

----

Table of Contents

|                                          |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Securities available-for-sale:                |   |   |   |   |   |   |   |   |   |
| REMICs                                        |   |   | 1.7    |   |   |   | 2.6    |   |   |   | 14.0 |   |
| MBS                                           |   |   | 9.6    |   |   |   | 21.0   |   |   |   | 9.5 |   |
| Total                                         |   |   | 9.6    |   |   |   | 17.7   |   |   |   | 14.1 |   |
| Securities held-to-maturity:                  |   |   |   |   |   |   |   |   |   |   |   |   |
| Tax-exempt state, county, and municipal bonds |   |   | 17.0   |   |   |   | 18.4   |   |   |   | 17.6 |   |

----

Table of Contents

|                              |   | At December 31, |    |
|-----------------------------------|--------|-----------------|---------|
|                              |   | 2009            |    |   | 2008 |   |   | 2007 |   |
|                              |   |            |    |   | % of |   |   |   |   |   | % of |   |   |   |   |   | % of |   |
|                              |   | Amount          |    |   | Deposits |   |   | Amount |   |   | Deposits |   |   | Amount |   |   | Deposits |   |
|                              |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand deposits                   |   | $               | 35,409  |   |   |   | 13.1 | % |   | $ | 43,017 |   |   |   | 17.9 | % |   | $ | 27,278 |   |   |   | 12.5 | % |
| NOW deposits                      |   |            | 11,455  |   |   |   | 4.2 |   |   |   | 20,208 |   |   |   | 8.4 |   |   |   | 4,440 |   |   |   | 2.1 |   |
| Money market deposits             |   |            | 90,573  |   |   |   | 33.6 |   |   |   | 27,981 |   |   |   | 11.7 |   |   |   | 36,835 |   |   |   | 16.9 |   |
| Savings deposits                  |   |            | 2,702   |   |   |   | 1.0 |   |   |   | 2,892 |   |   |   | 1.2 |   |   |   | 2,800 |   |   |   | 1.3 |   |
| Subtotal                          |   |            | 140,139 |   |   |   | 51.9 |   |   |   | 94,098 |   |   |   | 39.2 |   |   |   | 71,353 |   |   |   | 32.8 |   |
|                              |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certificates of deposit:          |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     0.00% - 0.99%  |   |            | 236     |   |   |   | 0.1 |   |   |   | - |   |   |   | 0.0 |   |   |   | - |   |   |   | 0.0 |   |
|     1.00% - 1.99%  |   |            | 27,485  |   |   |   | 10.2 |   |   |   | - |   |   |   | 0.0 |   |   |   | - |   |   |   | 0.0 |   |
|     2.00% - 2.99%  |   |            | 60,956  |   |   |   | 22.6 |   |   |   | 6,250 |   |   |   | 2.6 |   |   |   | - |   |   |   | 0.0 |   |
|     3.00% - 3.99%  |   |            | 21,895  |   |   |   | 8.1 |   |   |   | 69,932 |   |   |   | 29.2 |   |   |   | 950 |   |   |   | 0.4 |   |
|     4.00% - 4.99%  |   |            | 8,887   |   |   |   | 3.3 |   |   |   | 42,947 |   |   |   | 17.9 |   |   |   | 40,953 |   |   |   | 18.8 |   |
|     5.00% - 5.99%  |   |            | 10,428  |   |   |   | 3.8 |   |   |   | 26,669 |   |   |   | 11.1 |   |   |   | 104,275 |   |   |   | 48.0 |   |
| Less fees on brokered deposits    |   |            | (42     | ) |   |   | 0.0 |   |   |   | (52 | ) |   |   | 0.0 |   |   |   | (40 | ) |   |   | 0.0 |   |
| Total certificates of deposit (1) |   |            | 129,845 |   |   |   | 48.1 |   |   |   | 145,746 |   |   |   | 60.8 |   |   |   | 146,138 |   |   |   | 67.2 |   |
|                              |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits                    |   | $               | 269,984 |   |   |   | 100.0 | % |   | $ | 239,844 |   |   |   | 100.0 | % |   | $ | 217,491 |   |   |   | 100.0 | % |

----

| (1) | Includes retirement accounts (in thousands) totaling $4,924, $4,047, and $5,281, in 2009, 2008, and 2007, respectively, all of which were in the form of certificates of deposit. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                    |   | At December 31, |    |
|-------------------------|--------|-----------------|---------|
|                    |   | 2009            |    |   | 2008 |   |   | 2007 |   |
|                    |   | Average         |    |   | Average |   |   | Average |   |   | Average |   |   | Average |   |   | Average |   |
|                    |   | Balance         |    |   | Rate |   |   | Balance |   |   | Rate |   |   | Balance |   |   | Rate |   |
| Demand, money market    |   |            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and NOW deposits        |   | $               | 123,182 |   |   |   | 1.24 | % |   | $ | 69,612 |   |   |   | 1.43 | % |   | $ | 72,193 |   |   |   | 2.33 | % |
| Savings deposits        |   |            | 2,858   |   |   |   | 0.99 |   |   |   | 2,988 |   |   |   | 1.10 |   |   |   | 3,751 |   |   |   | 1.49 |   |
| Certificates of deposit |   |            | 138,791 |   |   |   | 3.39 |   |   |   | 146,595 |   |   |   | 4.60 |   |   |   | 129,313 |   |   |   | 5.20 |   |
| Total deposits          |   | $               | 264,831 |   |   |   | 2.37 | % |   | $ | 219,195 |   |   |   | 3.54 | % |   | $ | 205,257 |   |   |   | 4.12 | % |

|                                   |   | December 31, |   |
|----------------------------------------|--------|--------------|--------|
|                                   |   | 2009         |   |   | 2008 |   |   | 2007 |   |
|                                   |   |         |   |   |   |   |   |   |   |
| Due in three months or less            |   | $            | 12,167 |   |   | $ | 21,648 |   |   | $ | 20,720 |   |
| Over three through twelve months       |   |         | 27,274 |   |   |   | 21,122 |   |   |   | 22,686 |   |
| Over twelve months through three years |   |         | 5,871  |   |   |   | 8,501 |   |   |   | 11,561 |   |
| Over three years                       |   |         | 1,353  |   |   |   | 500 |   |   |   | 2,818 |   |
|                                   |   | $            | 46,665 |   |   | $ | 51,771 |   |   | $ | 57,785 |   |

----

Table of Contents

|                            |   | Year Ending December 31, |    |
|---------------------------------|--------|--------------------------|---------|
|                            |   | 2010                     |    |   | 2011 |   |   | 2012 |   |   | 2013 |   |   |   | 2014 | + |   | Total |   |
| At December 31, 2009:           |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     0.00% - 0.99 |   | $                        | 236     |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | 236 |   |
|     1.00% - 1.99 |   |                     | 26,860  |   |   |   | 625 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 27,485 |   |
|     2.00% - 2.99 |   |                     | 43,385  |   |   |   | 11,425 |   |   |   | 5,068 |   |   |   | - |   |   |   | 1,078 |   |   |   | 60,956 |   |
|     3.00% - 3.99 |   |                     | 20,934  |   |   |   | 629 |   |   |   | 5 |   |   |   | 230 |   |   |   | 97 |   |   |   | 21,895 |   |
|     4.00% - 4.99 |   |                     | 7,770   |   |   |   | 768 |   |   |   | 60 |   |   |   | 289 |   |   |   | - |   |   |   | 8,887 |   |
|     5.00% - 5.99 |   |                     | 6,229   |   |   |   | 3,796 |   |   |   | 403 |   |   |   | - |   |   |   | - |   |   |   | 10,428 |   |
| Less fees on brokered deposits  |   |                     | (42     | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (42 | ) |
| Total certificates of deposit   |   | $                        | 105,372 |   |   | $ | 17,243 |   |   | $ | 5,536 |   |   | $ | 519 |   |   | $ | 1,175 |   |   | $ | 129,845 |   |
|                            |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                            |   | Year Ending December 31, |    |
|                            |   |                     | 2009    |   |   |   | 2010 |   |   |   | 2011 |   |   |   | 2012 |   |   |   | 2013 | + |   | Total |   |
| At December 31, 2008:           |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     1.00% - 1.99 |   | $                        | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|     2.00% - 2.99 |   |                     | 6,036   |   |   |   | 213 |   |   |   | 1 |   |   |   | - |   |   |   | - |   |   |   | 6,250 |   |
|     3.00% - 3.99 |   |                     | 51,461  |   |   |   | 17,772 |   |   |   | 476 |   |   |   | - |   |   |   | 223 |   |   |   | 69,932 |   |
|     4.00% - 4.99 |   |                     | 34,078  |   |   |   | 7,765 |   |   |   | 761 |   |   |   | 57 |   |   |   | 286 |   |   |   | 42,947 |   |
|     5.00% - 5.99 |   |                     | 16,316  |   |   |   | 6,192 |   |   |   | 3,749 |   |   |   | 412 |   |   |   | - |   |   |   | 26,669 |   |
| Less fees on brokered deposits  |   |                     | (52     | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (52 | ) |
| Total certificates of deposit   |   | $                        | 107,839 |   |   | $ | 31,942 |   |   | $ | 4,987 |   |   | $ | 469 |   |   | $ | 509 |   |   | $ | 145,746 |   |
|                            |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                            |   | Year Ending December 31, |    |
|                            |   |                     | 2008    |   |   |   | 2009 |   |   |   | 2010 |   |   |   | 2011 |   |   |   | 2012 | + |   | Total |   |
| At December 31, 2007:           |   |                     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     1.00% - 1.99 |   | $                        | -       |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
|     2.00% - 2.99 |   |                     | -       |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|     3.00% - 3.99 |   |                     | 446     |   |   |   | 504 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 950 |   |
|     4.00% - 4.99 |   |                     | 30,952  |   |   |   | 8,762 |   |   |   | 1,172 |   |   |   | 11 |   |   |   | 56 |   |   |   | 40,953 |   |
|     5.00% - 5.99 |   |                     | 77,138  |   |   |   | 15,690 |   |   |   | 6,662 |   |   |   | 4,377 |   |   |   | 408 |   |   |   | 104,275 |   |
| Less fees on brokered deposits  |   |                     | (23     | ) |   |   | (17 | ) |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (40 | ) |
| Total certificates of deposit   |   | $                        | 108,513 |   |   | $ | 24,939 |   |   | $ | 7,834 |   |   | $ | 4,388 |   |   | $ | 464 |   |   | $ | 146,138 |   |

|                           |   | December 31, |   |
|--------------------------------|--------|--------------|--------|
|                           |   | 2009         |   |   | 2008 |   |   | 2007 |   |
|                           |   |         |   |   |   |   |   |   |   |
| Customer repurchase agreements |   | $            | -      |   |   | $ | - |   |   | $ | 13,816 |   |
| Federal funds purchased        |   |         | -      |   |   |   | - |   |   |   | 4,372 |   |
| FHLB of Atlanta advances       |   |         | 12,300 |   |   |   | 6,300 |   |   |   | 2,300 |   |
| Junior subordinated debentures |   |         | 3,093  |   |   |   | 3,093 |   |   |   | 3,093 |   |
|                           |   |         |   |   |   |   |   |   |   |   |   |   |
|                           |   | $            | 15,393 |   |   | $ | 9,393 |   |   | $ | 23,581 |   |

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Table of Contents

|                                                       |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Interest rate at end of period                             |   |   |   |   |   |   |   |   |   |
| Customer repurchase agreements (federal funds rate less    |   |   |   |   |   |   |   |   |   |
| 25 basis points)                                           |   |   | -      | %      |   |   | -      | %      |   |   | 4.000 | % |
| FHLB of Atlanta advances (fixed rate convertible debt)     |   |   | 4.450  | %      |   |   | 4.450  | %      |   |   | 4.450 | % |
| FHLB of Atlanta advances (fixed rate fixed debt)           |   |   | 1.910  | %      |   |   | 1.990  | %      |   |   | - | % |
| FHLB of Atlanta advances (fixed rate fixed debt)           |   |   | 2.300  | %      |   |   | -      | %      |   |   | - | % |
| Junior subordinated debentures (fixed rate for five years) |   |   | 5.886  | %      |   |   | 5.886  | %      |   |   | 5.886 | % |
| Other short-term borrowings (federal funds purchased)      |   |   | -      | %      |   |   | -      | %      |   |   | 4.600 | % |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Average balances during the period                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer repurchase agreements                             |   | $      | -      |   |   | $      | 10,960 |   |   | $ | 15,054 |   |
| FHLB of Atlanta advances                                   |   | $      | 12,738 |   |   | $      | 4,545  |   |   | $ | 2,300 |   |
| Junior subordinated debentures                             |   | $      | 3,093  |   |   | $      | 3,093  |   |   | $ | 3,093 |   |
| Other short-term borrowings (federal funds purchased)      |   | $      | 2      |   |   | $      | 2,445  |   |   | $ | 2,441 |   |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted average interest rate                             |   |   |   |   |   |   |   |   |   |   |   |   |
| Customer repurchase agreements                             |   |   | -      | %      |   |   | 1.88   | %      |   |   | 4.81 | % |
| FHLB of Atlanta advances                                   |   |   | 2.74   | %      |   |   | 3.30   | %      |   |   | 4.45 | % |
| Junior subordinated debentures                             |   |   | 5.89   | %      |   |   | 5.89   | %      |   |   | 5.89 | % |
| Other short-term borrowings (federal funds purchased)      |   |   | -      | %      |   |   | 3.27   | %      |   |   | 4.64 | % |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term borrowings (customer repurchase agreements      |   |   |   |   |   |   |   |   |   |   |   |   |
| and federal funds purchased)                               |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance at end of period                                   |   | $      | -      |   |   | $      | -      |   |   | $ | 18,188 |   |
| Weighted average interest rate at end of period            |   |   | -      | %      |   |   | -      | %      |   |   | 4.00 | % |
| Maximum amount outstanding at month end during the period  |   | $      | 200    |   |   | $      | 22,159 |   |   | $ | 26,184 |   |
| Average amount outstanding during the period               |   | $      | 2      |   |   | $      | 13,405 |   |   | $ | 17,495 |   |
| Weighted average interest rate during the period           |   |   | -      | %      |   |   | 2.13   | %      |   |   | 4.78 | % |

|                                                  |   | December 31, |   |
|-------------------------------------------------------|--------|--------------|--------|
|                                                  |   | 2009         |   |   | 2008 |   |   | 2007 |   |
| Customer repurchase agreements                        |   | $            | -      |   |   | $ | 206 |   |   | $ | 724 |   |
| FHLB of Atlanta advances                              |   |         | 349    |   |   |   | 149 |   |   |   | 104 |   |
| Junior subordinated debentures                        |   |         | 183    |   |   |   | 185 |   |   |   | 185 |   |
| Other short-term borrowings (federal funds purchased) |   |         | -      |   |   |   | 80 |   |   |   | 113 |   |
|                                                  |   |         |   |   |   |   |   |   |   |   |   |   |
|                                                  |   | $            | 532    |   |   | $ | 620 |   |   | $ | 1,126 |   |

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Table of Contents

|                                           |   | December 31, |   |
|------------------------------------------------|--------|--------------|--------|
|                                           |   | 2009         |   |   | 2008 |   |   | 2007 |   |
| Commitments to originate loans                 |   |         |   |   |   |   |   |   |   |
| Residential real estate                        |   | $            | 3,630  |   |   | $ | 4,983 |   |   | $ | 8,796 |   |
| Commercial real estate, construction, and land |   |         |   |   |   |   |   |   |   |   |   |   |
| development secured by real estate             |   |         | 1,186  |   |   |   | 2,186 |   |   |   | 12,099 |   |
| Other unused commitments                       |   |         | 4,548  |   |   |   | 3,311 |   |   |   | 7,462 |   |
| Total commitments to originate loans           |   |         | 9,364  |   |   |   | 10,480 |   |   |   | 28,357 |   |
| Financial standby letters of credit            |   |         | 1,174  |   |   |   | 1,701 |   |   |   | 2,084 |   |
|                                           |   |         |   |   |   |   |   |   |   |   |   |   |
| Total contractual commitments                  |   | $            | 10,538 |   |   | $ | 12,181 |   |   | $ | 30,441 |   |

|                               |   | 1 Year  |    |   | Years 2 |   |   | Years 4 |   |   | After   |   |   |   |   |
|------------------------------------|--------|---------|---------|--------|---------|--------|--------|---------|--------|--------|---------|--------|--------|--------|--------|
|                               |   | or Less |    |   | and 3   |   |   | and 5   |   |   | 5 Years |   |   | Total  |   |
|                               |   |    |    |   |    |   |   |    |   |   |    |   |   |   |   |
| Deposits without a stated maturity |   | $       | 140,139 |   |    | $      | -      |    |   | $      | -       |   |   | $      | -      |   |   | $ | 140,139 |   |
| Certificates of deposit and        |   |    |    |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| other time deposits                |   |    | 105,372 |   |    |   | 22,779 |    |   |   | 1,694   |   |   |   | -      |   |   |   | 129,845 |   |
| Federal Home Loan Bank advances    |   |    | 4,300   |   |    |   | 8,000  |    |   |   | -       |   |   |   | -      |   |   |   | 12,300 |   |
| Junior subordinated debentures     |   |    | -       |   |    |   | -      |    |   |   | -       |   |   |   | 3,093  |   |   |   | 3,093 |   |
| Operating leases                   |   |    | 332     |   |    |   | 252    |    |   |   | 182     |   |   |   | 862    |   |   |   | 1,628 |   |
|                               |   |    |    |   |    |   |   |    |   |   |    |   |   |   |   |   |   |   |   |   |
| Total contractual obligations      |   | $       | 250,143 |   |    | $      | 31,031 |    |   | $      | 1,876   |   |   | $      | 3,955  |   |   | $ | 287,005 |   |

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Table of Contents

|                                                       |   | Bank Only       |    |
|------------------------------------------------------------|--------|-----------------|---------|
|                                                       |   | At December 31, |    |
|                                                       |   | 2009            |    |   | 2008 |   |   | 2007 |   |
| Tier 1 capital                                             |   |            |    |   |   |   |   |   |   |
| Stockholder’s equity                                 |   | $               | 12,797  |   |   | $ | 19,899 |   |   | $ | 21,831 |   |
| Plus, qualifying trust preferred securities                |   |            | -       |   |   |   | - |   |   |   | - |   |
| Plus, unrealized losses on AFS securities                  |   |            | 13      |   |   |   | 1 |   |   |   | 84 |   |
| Less disallowed deferred taxes for risk-based capital only |   |            | -       |   |   |   | (845 | ) |   |   | - |   |
| Less intangible assets                                     |   |            | -       |   |   |   | - |   |   |   | - |   |
|                                                       |   |            | 12,810  |   |   |   | 19,055 |   |   |   | 21,915 |   |
| Tier 2 capital                                             |   |            |    |   |   |   |   |   |   |   |   |   |
| Allowable portion of allowance for loan losses and         |   |            |    |   |   |   |   |   |   |   |   |   |
| off-balance sheet commitments                              |   |            | 2,551   |   |   |   | 2,665 |   |   |   | 2,200 |   |
|                                                       |   |            |    |   |   |   |   |   |   |   |   |   |
| Total risk-based capital                                   |   | $               | 15,361  |   |   | $ | 21,720 |   |   | $ | 24,115 |   |
|                                                       |   |            |    |   |   |   |   |   |   |   |   |   |
| Total risk-weighted assets                                 |   | $               | 200,062 |   |   | $ | 211,883 |   |   | $ | 234,940 |   |
|                                                       |   |            |    |   |   |   |   |   |   |   |   |   |
| Tier 1 risk-based capital ratio                            |   |            | 6.40    | % |   |   | 8.99 | % |   |   | 9.33 | % |
|                                                       |   |            |    |   |   |   |   |   |   |   |   |   |
| Total risk-based capital ratio                             |   |            | 7.68    | % |   |   | 10.25 | % |   |   | 10.26 | % |
|                                                       |   |            |    |   |   |   |   |   |   |   |   |   |
| Average total assets for leverage capital purposes         |   | $               | 315,347 |   |   | $ | 262,982 |   |   | $ | 257,067 |   |
|                                                       |   |            |    |   |   |   |   |   |   |   |   |   |
| Tier 1 leverage ratio                                      |   |            | 4.06    | % |   |   | 7.25 | % |   |   | 8.53 | % |

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Table of Contents

|                                             |   | For the Year Ended December 31, |   |
|--------------------------------------------------|--------|---------------------------------|--------|
|                                             |   | 2009                            |   |   | 2008 |   |   | 2007 |   |
| Average equity as a percentage of average assets |   |                            | 5.31   | % |   |   | 7.14 | % |   |   | 7.30 | % |
| Equity to total assets at end of year            |   |                            | 3.26   |   |   |   | 6.32 |   |   |   | 7.21 |   |
| Return on average equity                         |   |                            | -45.70 |   |   |   | -10.37 |   |   |   | 7.77 |   |
| Return on average assets                         |   |                            | -2.43  |   |   |   | -0.74 |   |   |   | 0.57 |   |
| Noninterest expenses to average assets           |   |                            | 2.85   |   |   |   | 2.94 |   |   |   | 2.59 |   |

|                                   |   | 2009   |   |   | 2008   |   |   | 2007   |   |
|----------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|                                   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                      |   | $      | (7,240 | )      |   | $      | (1,927 | )      |   | $ | 1,406 |   |
| Change in unrealized gains (losses) on |   |   |   |   |   |   |   |   |   |   |   |   |
| available-for-sale securities          |   |   | (12    | )      |   |   | 83     |   |   |   | 199 |   |
| Implementation of EITF 06-4 for        |   |   |   |   |   |   |   |   |   |   |   |   |
| indexed retirement plan                |   |   | -      |   |   |   | (80    | )      |   |   | - |   |
|                                   |   | $      | (7,252 | )      |   | $      | (1,924 | )      |   | $ | 1,605 |   |
|                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Return on average equity               |   |   | -45.70 | %      |   |   | -10.37 | %      |   |   | 7.77 | % |

|                                        |   | 2009 |   |   | 2008   |   |   | 2007   |   |
|---------------------------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Loans                                       |   | $    | 7.9    |   |   | $      | 6.6    |   |   | $ | 6.2 |   |
| Unfunded loan commitments                   |   | $    | 0.2    |   |   | $      | 0.6    |   |   | $ | 1.9 |   |
| Deposits and customer repurchase agreements |   | $    | 1.7    |   |   | $      | 10.1   |   |   | $ | 24.2 |   |

----

Table of Contents

|                             |   | Under    |    |   | 3 to 12 |   |    |        |   |   | Over    |   |   |   |   |
|----------------------------------|--------|----------|---------|--------|---------|--------|---------|-------------|--------|--------|---------|--------|--------|--------|--------|
|                             |   | 3 Months |    |   | Months  |   |    | 1 - 5 Years |   |   | 5 Years |   |   | Total  |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |
| Federal funds sold               |   | $        | -       |   |    | $      | -       |        |   | $      | -       |   |   | $      | -      |   |   | $ | - |   |
| Interest-bearing deposits        |   |     | 27,535  |   |    |   | -       |        |   |   | -       |   |   |   | -      |   |   |   | 27,535 |   |
| Loans(1)                         |   |     | 57,519  |   |    |   | 23,128  |        |   |   | 97,373  |   |   |   | 15,995 |   |   |   | 194,015 |   |
| Securities(2)                    |   |     | 4,119   |   |    |   | 32      |        |   |   | 2,541   |   |   |   | 50,839 |   |   |   | 57,531 |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Total rate-sensitive assets      |   | $        | 89,173  |   |    | $      | 23,160  |        |   | $      | 99,914  |   |   | $      | 66,834 |   |   | $ | 279,081 |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Money market and NOW accounts(2) |   | $        | 90,573  |   |    | $      | -       |        |   | $      | -       |   |   | $      | 11,455 |   |   | $ | 102,028 |   |
| Savings accounts (2)             |   |     | -       |   |    |   | -       |        |   |   | -       |   |   |   | 2,702  |   |   |   | 2,702 |   |
| Certificates of deposit (2)      |   |     | 35,917  |   |    |   | 69,455  |        |   |   | 24,473  |   |   |   | -      |   |   |   | 129,845 |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Total rate-sensitive liabilities |   | $        | 126,490 |   |    | $      | 69,455  |        |   | $      | 24,473  |   |   | $      | 14,157 |   |   | $ | 234,575 |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Gap (repricing differences)      |   | $        | (37,317 | )      |    | $      | (46,295 | )           |   | $      | 75,441  |   |   | $      | 52,677 |   |   | $ | 44,506 |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Cumulative Gap                   |   | $        | (37,317 | )      |    | $      | (83,612 | )           |   | $      | (8,171  | )      |   | $      | 44,506 |   |   |   |   |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Cumulative Gap/total assets      |   |     | -12.55  | %      |    |   | -28.12  | %           |   |   | -2.75   | %      |   |   | 14.971 | % |   |   |   |   |
|                             |   |     |    |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Total assets                     |   | $        | 297,366 |   |    |   |    |        |   |   |    |   |   |   |   |   |   |   |   |   |

----

| (1) | In preparing the table above, adjustable-rate loans were included in the period in which the interest rates are next scheduled to adjust rather than in the period in which the loans mature.  Fixed-rate loans were scheduled according to their contractual maturities.  Nonaccrual loans of $6,715 were excluded (dollars in thousands). |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Excludes noninterest-bearing deposit accounts.  Money market deposits were regarded as maturing immediately, and other core deposits were assumed to mature in the “Over 5 Years” category.  All other time deposits were scheduled through the maturity or repricing dates.  Investments were scheduled through their contractual, repricing, or expected principal payment dates.  Certain mortgage-backed investments with varying maturities of three years or less were included in the “1-5 Years” category. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| ITEM 7A. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|----------|------------------------------------------------------------|

----

Table of Contents

| Change in Prevailing Interest Rates |   | Change in Net Interest Margin (Basis Points) |   |
|-------------------------------------|--------|----------------------------------------------|--------|
|                                |   | Next 12 months                     |   |   | Next 24 months |   |
|                                |   |                                         |   |   |   |   |
| +  400 basis points       |   |                                         | -60    |   |   |   | -63 |   |
| +  300 basis points       |   |                                         | -44    |   |   |   | -47 |   |
| +  200 basis points       |   |                                         | -30    |   |   |   | -32 |   |
| +  100 basis points       |   |                                         | -12    |   |   |   | -11 |   |
|     Prevailing rates |   |                                         | -      |   |   |   | - |   |
| -  100 basis points       |   |                                         | +10    |   |   |   | +7 |   |
| -  200 basis points       |   |                                         | +12    |   |   |   | +0 |   |
| -  300 basis points       |   |                                         | +12    |   |   |   | -12 |   |
| -  400 basis points       |   |                                         | +7     |   |   |   | -27 |   |

----

Table of Contents

| ITEM 8. | FINANCIAL STATEMENTS and SUPPLEMENTARY DATA |
|---------|---------------------------------------------|

|   | /s/ MAULDIN & JENKINS, LLC |
|--------|--------------------------------|

----

Table of Contents

|                                                                      |   | December 31,                                  |      |
|---------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                                      |   | 2009                                          |      |   | 2008 |   |
|                                                                      |   | (Dollars in Thousands, Except Per Share Data) |      |
| ASSETS                                                                    |   |                                          |      |   |   |   |
| Cash and due from banks                                                   |   | $                                             | 3,548     |   |   | $ | 16,923 |   |
| Interest-bearing deposits                                                 |   |                                          | 27,535    |   |   |   | 154 |   |
| Federal funds sold                                                        |   |                                          | -         |   |   |   | 100 |   |
| Total cash and cash equivalents                                           |   |                                          | 31,083    |   |   |   | 17,177 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| Investment securities, available-for-sale                                 |   |                                          | 42,542    |   |   |   | 14,870 |   |
| Investment securities, held-to-maturity (market value of $14,748 in 2009  |   |                                          |      |   |   |   |   |   |
| and $14,898 in 2008)                                                      |   |                                          | 14,989    |   |   |   | 15,536 |   |
| Restricted stock, at cost                                                 |   |                                          | 1,151     |   |   |   | 955 |   |
| Loans, net                                                                |   |                                          | 194,187   |   |   |   | 203,030 |   |
| Bank premises and equipment                                               |   |                                          | 3,366     |   |   |   | 3,583 |   |
| Other real estate owned                                                   |   |                                          | 1,727     |   |   |   | 3,421 |   |
| Accrued interest receivable                                               |   |                                          | 1,089     |   |   |   | 1,051 |   |
| Deferred income taxes                                                     |   |                                          | 708       |   |   |   | 2,003 |   |
| Investment in unconsolidated subsidiary                                   |   |                                          | 93        |   |   |   | 93 |   |
| Cash surrender value of bank-owned life insurance                         |   |                                          | 5,097     |   |   |   | 4,886 |   |
| Other assets                                                              |   |                                          | 1,334     |   |   |   | 1,368 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| Total assets                                                              |   | $                                             | 297,366   |   |   | $ | 267,973 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| LIABILITIES                                                               |   |                                          |      |   |   |   |   |   |
| Deposits:                                                                 |   |                                          |      |   |   |   |   |   |
| Noninterest-bearing                                                       |   | $                                             | 35,409    |   |   | $ | 43,017 |   |
| Interest-bearing                                                          |   |                                          | 234,575   |   |   |   | 196,827 |   |
| Total deposits                                                            |   |                                          | 269,984   |   |   |   | 239,844 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| Other borrowings:                                                         |   |                                          |      |   |   |   |   |   |
| Long-term debt                                                            |   |                                          | 15,393    |   |   |   | 9,393 |   |
| Total other borrowings                                                    |   |                                          | 15,393    |   |   |   | 9,393 |   |
| Accrued interest payable                                                  |   |                                          | 299       |   |   |   | 321 |   |
| Other liabilities                                                         |   |                                          | 2,010     |   |   |   | 1,483 |   |
| Total liabilities                                                         |   |                                          | 287,686   |   |   |   | 251,041 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| Commitments and contingencies                                             |   |                                          | -         |   |   |   | - |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                |   |                                          |      |   |   |   |   |   |
| Preferred stock, authorized 2,000,000 shares, none issued and outstanding |   |                                          | -         |   |   |   | - |   |
| Common stock, $0.01 par value, authorized 10,000,000 shares, issued       |   |                                          |      |   |   |   |   |   |
| and outstanding 1,247,516 shares in 2009 and 2008                         |   |                                          | 12        |   |   |   | 12 |   |
| Additional paid-in capital                                                |   |                                          | 11,788    |   |   |   | 11,788 |   |
| Retained earnings (deficit)                                               |   |                                          | (2,107    | ) |   |   | 5,133 |   |
| Accumulated other comprehensive loss:                                     |   |                                          |      |   |   |   |   |   |
| Net unrealized holding losses on securities                               |   |                                          | (13       | ) |   |   | (1 | ) |
| Total stockholders’ equity                                          |   |                                          | 9,680     |   |   |   | 16,932 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| Total liabilities and stockholders’ equity                          |   | $                                             | 297,366   |   |   | $ | 267,973 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| Book value per common share                                               |   | $                                             | 7.76      |   |   | $ | 13.57 |   |
|                                                                      |   |                                          |      |   |   |   |   |   |
| Common shares outstanding                                                 |   |                                          | 1,247,516 |   |   |   | 1,247,516 |   |

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Table of Contents

|                                                                          |   | Year ended December 31,                       |      |
|-------------------------------------------------------------------------------|--------|-----------------------------------------------|-----------|
|                                                                          |   | 2009                                          |      |   | 2008 |   |
|                                                                          |   | (Dollars in Thousands, Except Per Share Data) |      |
| INTEREST INCOME                                                               |   |                                          |      |   |   |   |
| Interest and fees on loans                                                    |   | $                                             | 12,354    |   |   | $ | 13,637 |   |
| Taxable interest income on investment securities and                          |   |                                          |      |   |   |   |   |   |
| interest bearing deposits in banks                                            |   |                                          | 875       |   |   |   | 989 |   |
| Tax-exempt interest income on investment securities                           |   |                                          | 665       |   |   |   | 674 |   |
| Interest on federal funds sold                                                |   |                                          | 1         |   |   |   | 35 |   |
| Total interest income                                                         |   |                                          | 13,895    |   |   |   | 15,335 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| INTEREST EXPENSE                                                              |   |                                          |      |   |   |   |   |   |
| Interest on deposits                                                          |   |                                          | 6,268     |   |   |   | 7,770 |   |
| Short-term borrowings                                                         |   |                                          | -         |   |   |   | 286 |   |
| Long-term borrowings                                                          |   |                                          | 532       |   |   |   | 334 |   |
| Total interest expense                                                        |   |                                          | 6,800     |   |   |   | 8,390 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| NET INTEREST INCOME BEFORE PROVISION FOR LOAN LOSSES                          |   |                                          | 7,095     |   |   |   | 6,945 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| PROVISION FOR LOAN LOSSES                                                     |   |                                          | 6,268     |   |   |   | 4,424 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                           |   |                                          | 827       |   |   |   | 2,521 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| NONINTEREST INCOME                                                            |   |                                          |      |   |   |   |   |   |
| Fees and service charges on deposit accounts                                  |   |                                          | 611       |   |   |   | 688 |   |
| Other fee income for banking services                                         |   |                                          | 146       |   |   |   | 162 |   |
| Mortgage banking fees                                                         |   |                                          | -         |   |   |   | 17 |   |
| Income from bank-owned life insurance                                         |   |                                          | 229       |   |   |   | 221 |   |
| Dividends on restricted stock and trust-preferred securities                  |   |                                          | 7         |   |   |   | 37 |   |
| Gain (loss) on sale of foreclosed assets                                      |   |                                          | (142      | ) |   |   | 4 |   |
| Realized gain on securities                                                   |   |                                          | 56        |   |   |   | 346 |   |
| Loss on restricted stock                                                      |   |                                          | (179      | ) |   |   | - |   |
| Other income                                                                  |   |                                          | 23        |   |   |   | 34 |   |
| Total noninterest income                                                      |   |                                          | 751       |   |   |   | 1,509 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| NONINTEREST EXPENSES                                                          |   |                                          |      |   |   |   |   |   |
| Salaries and employee benefits                                                |   |                                          | 2,846     |   |   |   | 3,128 |   |
| Expenses of bank premises and fixed assets                                    |   |                                          | 1,029     |   |   |   | 1,092 |   |
| Other operating expenses                                                      |   |                                          | 4,616     |   |   |   | 3,429 |   |
| Total noninterest expenses                                                    |   |                                          | 8,491     |   |   |   | 7,649 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| LOSS BEFORE PROVISION (BENEFIT) FOR INCOME TAXES                              |   |                                          | (6,913    | ) |   |   | (3,619 | ) |
|                                                                          |   |                                          |      |   |   |   |   |   |
| PROVISION (BENEFIT) FOR INCOME TAXES                                          |   |                                          | 327       |   |   |   | (1,692 | ) |
|                                                                          |   |                                          |      |   |   |   |   |   |
| NET LOSS                                                                      |   |                                          | (7,240    | ) |   |   | (1,927 | ) |
|                                                                          |   |                                          |      |   |   |   |   |   |
| OTHER COMPREHENSIVE INCOME (LOSS)                                             |   |                                          |      |   |   |   |   |   |
| Unrealized holding gains (losses) on securities arising during period, net of |   |                                          |      |   |   |   |   |   |
| income tax benefit (expense) of $7 in 2009 and $(51) in 2008 (see Note 3)     |   |                                          | (12       | ) |   |   | 83 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| COMPREHENSIVE LOSS                                                            |   | $                                             | (7,252    | ) |   | $ | (1,844 | ) |
|                                                                          |   |                                          |      |   |   |   |   |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| AVERAGE COMMON SHARES OUTSTANDING                                             |   |                                          |      |   |   |   |   |   |
| Basic and fully diluted                                                       |   |                                          | 1,247,516 |   |   |   | 1,247,516 |   |
|                                                                          |   |                                          |      |   |   |   |   |   |
| LOSS PER SHARE                                                                |   |                                          |      |   |   |   |   |   |
| Basic and fully diluted                                                       |   | $                                             | (5.80     | ) |   | $ | (1.54 | ) |

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Table of Contents

|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   | Accumulated         |   |   |   |   |
|---------------------------------------|--------|------------------------|-----------|--------|---------|--------|--------|------------|--------|--------|---------------|--------|--------|---------------------|--------|--------|--------|--------|
|                                  |   |                   |      |   |    |   |   | Additional |   |   | Retained      |   |   | Other               |   |   | Total  |   |
|                                  |   | Common Stock           |      |   | Paid-in |   |   | Earnings   |   |   | Comprehensive |   |   | Stockholders’ |   |
|                                  |   | Shares                 |      |   | Amount  |   |   | Capital    |   |   | (Deficit)     |   |   | Loss                |   |   | Equity |   |
|                                  |   | (Dollars in Thousands) |      |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |
| Balance, December 31, 2007            |   |                   | 1,247,516 |   |    | $      | 12     |       |   | $      | 11,788        |   |   | $                   | 7,140  |   |   | $      | (84 | ) |   | $ | 18,856 |   |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Cumulative effect adjustment recorded |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| as of January 1, 2008, for            |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| implementation of EITF 06-4           |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| (See Notes 1 and 9)                   |   |                   | -         |   |    |   | -      |       |   |   | -             |   |   |                | (80    | )      |   |   | - |   |   |   | (80 | ) |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss):          |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Net loss                              |   |                   | -         |   |    |   | -      |       |   |   | -             |   |   |                | (1,927 | )      |   |   |   |   |   |   |   |   |
| Change in net unrealized              |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| holding gains on securities           |   |                   | -         |   |    |   | -      |       |   |   | -             |   |   |                | -      |   |   |   | 83 |   |   |   |   |   |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive loss              |   |                   | -         |   |    |   | -      |       |   |   | -             |   |   |                | -      |   |   |   | - |   |   |   | (1,844 | ) |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2008            |   |                   | 1,247,516 |   |    |   | 12     |       |   |   | 11,788        |   |   |                | 5,133  |   |   |   | (1 | ) |   |   | 16,932 |   |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Comprehensive income (loss):          |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Net loss                              |   |                   | -         |   |    |   | -      |       |   |   | -             |   |   |                | (7,240 | )      |   |   |   |   |   |   |   |   |
| Change in net unrealized              |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| holding losses on securities          |   |                   | -         |   |    |   | -      |       |   |   | -             |   |   |                | -      |   |   |   | (12 | ) |   |   |   |   |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Total comprehensive loss              |   |                   | -         |   |    |   | -      |       |   |   | -             |   |   |                | -      |   |   |   | - |   |   |   | (7,252 | ) |
|                                  |   |                   |      |   |    |   |   |       |   |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |
| Balance, December 31, 2009            |   |                   | 1,247,516 |   |    | $      | 12     |       |   | $      | 11,788        |   |   | $                   | (2,107 | )      |   | $      | (13 | ) |   | $ | 9,680 |   |

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Table of Contents

|                                                                  |   | Year ended December 31, |    |
|-----------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                  |   | 2009                    |    |   | 2008 |   |
|                                                                  |   | (Dollars in Thousands)  |    |
| CASH FLOWS FROM OPERATING ACTIVITIES                                  |   |                    |    |   |   |   |
| Net loss                                                              |   | $                       | (7,240  | ) |   | $ | (1,927 | ) |
| Adjustments to reconcile net loss to net cash                         |   |                    |    |   |   |   |   |   |
| provided by operating activities:                                     |   |                    |    |   |   |   |   |   |
| Provision for loan losses                                             |   |                    | 6,268   |   |   |   | 4,424 |   |
| Depreciation and amortization                                         |   |                    | 252     |   |   |   | 313 |   |
| Net premium amortization and discount accretion                       |   |                    | 385     |   |   |   | (24 | ) |
| Gain on sale of investment securities                                 |   |                    | (56     | ) |   |   | (346 | ) |
| (Gain) loss on sale of foreclosed assets                              |   |                    | 142     |   |   |   | (4 | ) |
| Deferred income taxes                                                 |   |                    | 1,295   |   |   |   | (1,007 | ) |
| Policy income from bank-owned life insurance                          |   |                    | (211    | ) |   |   | (206 | ) |
| Pension expense from director and management benefit plans            |   |                    | 275     |   |   |   | 295 |   |
| Write-down of other real estate owned                                 |   |                    | 586     |   |   |   | 315 |   |
| Loss on restricted stock                                              |   |                    | 179     |   |   |   | - |   |
| Decrease in accrued interest receivable and other assets              |   |                    | 225     |   |   |   | 526 |   |
| Increase (decrease) in accrued interest payable and other liabilities |   |                    | 230     |   |   |   | (99 | ) |
| Net cash provided by operating activities                             |   |                    | 2,330   |   |   |   | 2,260 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                  |   |                    |    |   |   |   |   |   |
| Securities available-for-sale:                                        |   |                    |    |   |   |   |   |   |
| Purchases                                                             |   |                    | (43,567 | ) |   |   | (9,346 | ) |
| Proceeds from sales                                                   |   |                    | 8,383   |   |   |   | 12,751 |   |
| Calls and maturities                                                  |   |                    | 389     |   |   |   | 610 |   |
| Principal repayments on mortgage-backed investment securities         |   |                    | 6,778   |   |   |   | 7,163 |   |
| Securities held-to-maturity:                                          |   |                    |    |   |   |   |   |   |
| Calls                                                                 |   |                    | 544     |   |   |   | 220 |   |
| Purchases of restricted stock                                         |   |                    | (375    | ) |   |   | (209 | ) |
| Increase in loans                                                     |   |                    | 1,840   |   |   |   | (11,282 | ) |
| Proceeds from sale of other real estate owned                         |   |                    | 1,479   |   |   |   | 2,302 |   |
| Purchases of bank premises and equipment                              |   |                    | (35     | ) |   |   | (113 | ) |
| Net cash provided by (used in) investing activities                   |   |                    | (24,564 | ) |   |   | 2,096 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                  |   |                    |    |   |   |   |   |   |
| Increase (decrease) in deposits:                                      |   |                    |    |   |   |   |   |   |
| Noninterest-bearing                                                   |   |                    | (7,608  | ) |   |   | 15,739 |   |
| Interest-bearing                                                      |   |                    | 37,748  |   |   |   | 6,614 |   |
| Proceeds from other borrowings, net of repayments                     |   |                    | 6,000   |   |   |   | (14,188 | ) |
| Net cash provided by financing activities                             |   |                    | 36,140  |   |   |   | 8,165 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                  |   |                    | 13,906  |   |   |   | 12,521 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                        |   |                    | 17,177  |   |   |   | 4,656 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                              |   | $                       | 31,083  |   |   | $ | 17,177 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                     |   |                    |    |   |   |   |   |   |
| Cash received during the year for interest and dividends              |   | $                       | 13,864  |   |   | $ | 15,859 |   |
| Cash paid during the year for interest                                |   | $                       | 6,822   |   |   | $ | 8,453 |   |
| Cash paid (received) during the year for income taxes                 |   | $                       | (693    | ) |   | $ | 46 |   |
|                                                                  |   |                    |    |   |   |   |   |   |
| NONCASH TRANSACTIONS                                                  |   |                    |    |   |   |   |   |   |
| Loans transferred to foreclosed real estate during the year           |   | $                       | 513     |   |   | $ | 5,719 |   |
| Increase in cash surrender value of bank-owned life insurance         |   | $                       | 229     |   |   | $ | 220 |   |
| Increase in deferred compensation arrangements                        |   | $                       | 275     |   |   | $ | 295 |   |
| Net change in unrealized holding gains (losses) on securities         |   |                    |    |   |   |   |   |   |
| available-for-sale, net of income taxes                               |   | $                       | (12     | ) |   | $ | 83 |   |

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Table of Contents

| · | Oceanside’s Board of Directors is required to increase its participation, approve a management plan for the purpose of providing qualified management for Oceanside, and provide more detailed management reports. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | During the life of the Consent Order, Oceanside shall not add any individual to Oceanside’s Board of Directors or employ any individual as a senior executive officer without the prior non-objection of the FDIC and the OFR. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Within 90 days of the effective date of the Consent Order and, thereafter, during the life of the Consent Order, Oceanside shall achieve and maintain a Tier 1 Leverage Capital Ratio of not less than 8% and a Total Risk Based Capital Ratio of not less than 11%.  In the event such ratios fall below such levels, Oceanside shall notify the FDIC and the OFR and shall increase capital in an amount sufficient to reach the required ratios within 90 days of such notice. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Oceanside shall also be required to maintain a fully funded Allowance for Loan and Lease Losses (“ALLL”), the adequacy of which shall be satisfactory to the FDIC and the OFR. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Oceanside must review, revise, and adopt its written liquidity, contingency funding, and funds management policy to provide effective guidance and control over Oceanside’s funds management activities.  Oceanside must also implement adequate models for managing liquidity; and, calculate monthly the liquidity and dependency ratios |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Throughout the life of the Consent Order, Oceanside shall not accept, renew, or rollover any brokered deposit, and comply with the restrictions on the effective yields on deposits exceeding national averages. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | While the Consent Order is in effect, Oceanside shall notify the FDIC and the OFR, at least, 60 days prior to undertaking asset growth in excess of 10% or more per annum or initiating material changes in asset or liability composition. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | While the Consent Order is in effect, Oceanside shall not declare or pay dividends, interest payments on subordinated debentures or any other form of payment representing a reduction in capital without the prior written approval of the FDIC and the OFR. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | While the Consent Order remains in effect, Oceanside shall, within 30 days of the receipt of any official Report of Examination, eliminate from its books any remaining balance of any assets classified “Loss” and 50% percent of those classified “Doubtful”, unless otherwise approved in writing by the FDIC and the OFR.  Within 60 days from the effective date of the Consent Order, Oceanside shall formulate a plan, subject to approval by the FDIC and the OFR, to reduce Oceanside’s risk exposure in each asset, or relationship in excess of $500,000 classified “Substandard” by the FDIC in November 2008. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Oceanside shall also reduce the aggregate balance of assets classified “Substandard” by the FDIC in November 2008, in accordance with the following schedule: (i) within 90 days to not more than 100% of Tier 1 capital |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

| · | Beginning with the effective date of the Consent Order, Oceanside shall not extend any credit to, or for the benefit of, any borrower who has a loan that has been charged off or classified “Loss” or “Doubtful” and is uncollected.  Additionally, during the life of the Consent Order, Oceanside shall not extend, directly or indirectly, any additional credit to, or for the benefit of, any borrower who has a loan or other extension of credit from Oceanside that has been classified “Substandard”, and is uncollected, unless Oceanside documents that such extension of credit is in Oceanside’s best interest. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Within 30 days from the effective date of the Consent Order, Oceanside will engage a loan review analyst who shall review all loans exceeding $500,000. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Within 60 days from the effective date of the Consent Order, Oceanside shall revise, adopt, and implement a written lending, underwriting, and collection policy to provide effective guidance and control over Oceanside’s lending function.  In addition, Oceanside shall obtain adequate and current documentation for all loans in Oceanside’s loan portfolio.  Within 30 days from the effective date of the Consent Order, the Board shall adopt and implement a policy limiting the use of loan interest reserves to certain types of loans. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Within 60 days from the effective date of the Consent Order, Oceanside shall perform a risk segmentation analysis with respect to the any other concentration deemed important by Oceanside. The plan shall establish appropriate commercial real estate (“CRE”) lending risk limits and monitor concentrations of risk in relation to capital. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Within 30 days from the effective date of the Consent Order, Oceanside shall formulate and fully implement a written plan and a comprehensive budget.  Within 60 days from the effective date of the Consent Order, Oceanside shall prepare and submit to the FDIC and the OFR for comment a business strategic plan covering the overall operation of Oceanside. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Within 30 days of the end of each calendar quarter following the effective date of the Consent Order, Oceanside shall furnish written progress reports to the FDIC and the OFR detailing the form, manner, and results of any actions taken to secure compliance. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Holding Company shall not declare or pay any dividends without the prior written approval of the Reserve Bank and the Director of the Division of Banking Supervision and Regulation (the "Director") of the Board of Governors of the Federal Reserve System (the "Board of Governors"). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Holding Company shall not directly or indirectly take dividends or any other form of payment representing a reduction in capital from the Bank without the prior written approval of the Reserve Bank. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Holding Company and its nonbank subsidiary shall not make any distributions of interest, principal, or other sums on subordinated debentures or trust preferred securities without the prior written approval of the Reserve Bank and the Director. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | The Holding Company and any nonbank subsidiary shall not, directly or indirectly, incur, increase, or guarantee any debt without the prior written approval of the Reserve Bank. All requests for prior written approval shall contain, but not be limited to, a statement regarding the purpose of the debt, the terms of the debt, and the planned source(s) for debt repayment, and an analysis of the cash flow resources available to meet such debt repayment. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Holding Company shall not, directly or indirectly, purchase or redeem any shares of its stock without the prior written approval of the Reserve Bank. |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | In appointing any new director or senior executive officer, or changing the responsibilities of any senior executive officer so that the officer would assume a different senior executive officer position, the Holding Company shall comply with the notice provisions of section 32 of the FDI Act (12 U.S.C. § 1831i) and Subpart H of Regulation Y of the Board of Governors (12 C.F.R. §§ 225.71 et seq.). |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | The Holding Company shall comply with the restrictions on indemnification and severance payments of section 18(k) of the FDI Act (12 U.S.C. § 1828(k)) and Part 359 of the Federal Deposit Insurance Corporation's regulations (12 C.F.R. Part 359). |
|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Within 30 days after the end of each calendar quarter following the date of this Written Agreement, the board of directors shall submit to the Reserve Bank written progress reports detailing the form and manner of all actions taken to secure compliance with the provisions of this Written Agreement and the results thereof, and a parent company only balance sheet, income statement, and, as applicable, report of changes in stockholders' equity. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| · | Atlantic has a prior history of taxable earnings prior to losses that began in 2008. Since inception in 1997, Atlantic has reported taxable income in 10 of 12 years through 2008, with cumulative taxable income of nearly $9.0 million through 2008. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Atlantic has reported and believes that changes have been made to allow Atlantic to return to a taxable earnings position, including reductions in payroll and other operating costs.  Within the next 2-5 years, internal projections indicate that book and taxable income are more likely than not to return to levels approaching those prior to 2008. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Management has received and considered offers to purchase two of its branch locations and relocate to leased space (or lease-back its existing facilities).  While the sale-leaseback would not likely generate significant book income immediately, the taxable income was projected to exceed $1.3 million. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Management and the Board of Directors have discussed a tax strategy that would generate taxable income of approximately $1.2 from the liquidation of bank-owned life insurance policies. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Converting tax-exempt investment income to taxable investment income, which could increase taxable income by almost $1.0 million and book income by $0.4 million. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Repurchase of junior subordinated debentures at a discount. |
|--------|-------------------------------------------------------------|

| · | Termination of all or a portion of the Bank’s deferred compensation plan, which would generate up to $1.6 million in book taxable income and reduce the deferred tax asset by $0.6 million. |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                        |   | For the Years Ended December 31, |   |
|-------------------------------------------------------------|--------|----------------------------------|--------|
|                                                        |   | 2009                             |   |   | 2008 |   |
| Basic EPS computation:                                      |   |                             |   |   |   |   |
| Numerator - Net income (loss)                               |   | $                                | (7,240 | ) |   | $ | (1,927 | ) |
| Denominator - Weighted average shares outstanding (rounded) |   |                             | 1,248  |   |   |   | 1,248 |   |
| Basic EPS                                                   |   | $                                | (5,80  | ) |   | $ | (1.54 | ) |
|                                                        |   |                             |   |   |   |   |   |   |
| Diluted EPS computation:                                    |   |                             |   |   |   |   |   |   |
| Numerator - Net income (loss)                               |   | $                                | (7,240 | ) |   | $ | (1,927 | ) |
| Denominator - Weighted average shares outstanding (rounded) |   |                             | 1,248  |   |   |   | 1,248 |   |
| Diluted EPS                                                 |   | $                                | (5.80  | ) |   | $ | (1.54 | ) |

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| NOTE 2 - | REGULATORY OVERSIGHT, CAPITAL ADEQUACY, OPERATING LOSSES, AND MANAGEMENT’S PLANS |
|--------------------|----------------------------------------------------------------------------------------|

| · | Our level of past due loans at year-end 2009 have improved from year-end 2008, with an overall reduction of $2.2 million of which $1.8 million is attributable to the 30-89 days past due category - possibly a lending indicator of a reduction in future charge-offs. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| NOTE 2 - | REGULATORY OVERSIGHT, CAPITAL ADEQUACY, OPERATING LOSSES, AND MANAGEMENT’S PLANS (Continued) |
|--------------------|----------------------------------------------------------------------------------------------------|

| · | A significant portion of our 2009 and 2008 charge-offs and expenses related to two projects and one single family residence.  Approximately 68% of the total charge-offs of $6.4 million in 2009 and 2008 were attributable to one multifamily project and a single family residence.  Specifically identified expenses related to the multifamily project and other real estate owned reduced earning by $1.2 million in 2009 and $0.8 million in 2008. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Despite recording net charge-offs of $6.3 million during 2009 and 2008, we increased our allowance for loan losses to 3.25% of total loans.  The allowance for loan losses covers over 97% of our nonperforming loans at December 31, 2009.  If the economy improves, the level of future additions to these reserves may subside, which will likely improve our capital ratios as the overall credit risks decline. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | In 2009, we took a noncash charge to earnings of $2.8 million to establish a valuation allowance for our deferred tax assets.  While Atlantic has a history of earnings prior to 2008, accounting practices limit our continued recognition of the deferred tax assets in 2009.  We expect to be able to utilize some or all of these benefits once the current economic cycle improves and we return to our historical profit levels. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Beginning in the fourth quarter of 2009 and continuing into 2010, we have been reducing Oceanside’s total assets.  Our unaudited and preliminary results at March 31, 2010, show Oceanside’s total bank-only assets at $286.1 million, a reduction of $11.3 million from December 31, 2009.  This contributed to an increase in our Tier 1 leverage ratio from 4.06% to 4.32%. |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| · | Atlantic is exposed to the weakened real estate conditions in the Florida markets of Duval and St. Johns Counties.  Atlantic believes the challenging market conditions are primarily attributable to a regional softening in demand for real estate assets as well as an oversupply of residential and commercial properties, particularly within Atlantic’s local markets.  However, existing home sales by area realtors have increased substantially and this decrement in existing real estate inventories, if sustained, may drive improvement in the regional economy during the coming year.  For comparison, 2009 single-family, existing homes and condominiums increased 21% and 38% over 2008 levels.  While some trends have stabilized or have begun to show improvement, we remain susceptible to rising unemployment rates for the region that are expected to remain relatively high through 2010. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                        |   | December 31, 2009 |   |   | December 31, 2008 |   |
|-----------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                        |   |              |   |   | Gross             |   |   | Gross |   |   |   |   |   |   |   |   | Gross |   |   | Gross |   |   |   |   |
|                        |   | Amortized         |   |   | Unrealized        |   |   | Unrealized |   |   | Fair |   |   | Amortized |   |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                        |   | Cost              |   |   | Gains             |   |   | Losses |   |   | Value |   |   | Cost |   |   | Gains |   |   | Losses |   |   | Value |   |
| Available-for-sale          |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REMICs                      |   | $                 | 134    |   |              | $      | 3 |   |   | $ | - |   |   | $ | 137 |   |   | $ | 2,700 |   |   | $ | 5 |   |   | $ | (6 | ) |   | $ | 2,699 |   |
| MBS                         |   |              | 42,428 |   |              |   | 217 |   |   |   | (240 | ) |   |   | 42,405 |   |   |   | 12,171 |   |   |   | 40 |   |   |   | (40 | ) |   |   | 12,171 |   |
|                        |   |              | 42,562 |   |              |   | 220 |   |   |   | (240 | ) |   |   | 42,542 |   |   |   | 14,871 |   |   |   | 45 |   |   |   | (46 | ) |   |   | 14,870 |   |
| Held-to-maturity            |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State, county and           |   |              |   |   |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| municipal bonds             |   |              | 14,989 |   |              |   | 154 |   |   |   | (395 | ) |   |   | 14,748 |   |   |   | 15,536 |   |   |   | 133 |   |   |   | (771 | ) |   |   | 14,898 |   |
| Total investment securities |   | $                 | 57,551 |   |              | $      | 374 |   |   | $ | (635 | ) |   | $ | 57,290 |   |   | $ | 30,407 |   |   | $ | 178 |   |   | $ | (817 | ) |   | $ | 29,768 |   |

|                               |   | Less Than Twelve Months |   |   | Over Twelve Months |   |   | Total      |   |
|------------------------------------|--------|-------------------------|--------|--------|--------------------|--------|--------|------------|--------|
|                               |   | Gross                   |   |   |               |   |   | Gross      |   |   |   |   |   | Gross |   |   |   |   |
|                               |   | Unrealized              |   |   | Fair               |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |
|                               |   | Losses                  |   |   | Value              |   |   | Losses     |   |   | Value |   |   | Losses |   |   | Value |   |
| December 31, 2009:                 |   |                    |   |   |               |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Available-for-Sale                 |   |                    |   |   |               |   |   |       |   |   |   |   |   |   |   |   |   |   |
| REMICs                             |   | $                       | -      |   |               | $      | -      |       |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |
| MBS                                |   |                    | (240   | )      |               |   | 23,020 |       |   |   | - |   |   |   | - |   |   |   | (240 | ) |   |   | 23,020 |   |
|                               |   | $                       | (240   | )      |               | $      | 23,020 |       |   | $ | - |   |   | $ | - |   |   | $ | (240 | ) |   | $ | 23,020 |   |
| Held-to-Maturity                   |   |                    |   |   |               |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State, county, and municipal bonds |   | $                       | (165   | )      |               | $      | 4,763  |       |   | $ | (230 | ) |   | $ | 2,867 |   |   | $ | (395 | ) |   | $ | 7,630 |   |
|                               |   |                    |   |   |               |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008:                 |   |                    |   |   |               |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-Sale                 |   |                    |   |   |               |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| REMICs                             |   | $                       | (6     | )      |               | $      | 927    |       |   | $ | - |   |   | $ | - |   |   | $ | (6 | ) |   | $ | 927 |   |
| MBS                                |   |                    | (40    | )      |               |   | 10,881 |       |   |   | - |   |   |   | - |   |   |   | (40 | ) |   |   | 10,881 |   |
|                               |   | $                       | (46    | )      |               | $      | 11,808 |       |   | $ | - |   |   | $ | $(46 | ) |   | $ | 11,808 |   |   |   |   |   |
| Held-to-Maturity                   |   |                    |   |   |               |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State, county, and municipal bonds |   | $                       | (393   | )      |               | $      | 6,590  |       |   | $ | (378 | ) |   | $ | 3,868 |   |   | $ | (771 | ) |   | $ | 10,458 |   |

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|                                                                |   | 2009   |   |   | 2008   |   |
|---------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                |   |   |   |   |   |   |
| Gross unrealized losses on investment securities available-for-sale |   | $      | (20    | )      |   | $      | (1 | ) |
| Deferred tax benefit on unrealized losses                           |   |   | 7      |   |   |   | - |   |
| Balance, December 31                                                |   | $      | (13    | )      |   | $      | (1 | ) |

|                                                                               |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                               |   |   |   |   |   |   |
| Unrealized holding gains on investment securities arising during period            |   | $      | 37     |   |   | $      | 480 |   |
| Less: reclassification adjustment for gains included in net loss                   |   |   | (56    | )      |   |   | (346 | ) |
| Other comprehensive income (loss), before tax                                      |   |   | (19    | )      |   |   | 134 |   |
| Income tax benefit (expense) related to items of other comprehensive income (loss) |   |   | 7      |   |   |   | (51 | ) |
| Other comprehensive income (loss), net of tax                                      |   | $      | (12    | )      |   | $      | 83 |   |

|                             |   | Securities Available-for-Sale |   |   | Securities Held-to-Maturity |   |
|----------------------------------|--------|-------------------------------|--------|--------|-----------------------------|--------|
|                             |   | Amortized Cost                |   |   | Fair Value                  |   |   | Amortized Cost |   |   | Fair Value |   |
| December 31, 2009:               |   |                          |   |   |                        |   |   |   |   |   |   |   |
| Due in one year or less          |   | $                             | 3,045  |   |                        | $      | 3,104 |   |   | $ | - |   |   | $ | - |   |
| Due after one through five years |   |                          | 4,973  |   |                        |   | 5,086 |   |   |   | 271 |   |   |   | 286 |   |
| Due after five through ten years |   |                          | 20,746 |   |                        |   | 20,595 |   |   |   | 1,163 |   |   |   | 1,218 |   |
| Due after ten years              |   |                          | 13,798 |   |                        |   | 13,757 |   |   |   | 13,555 |   |   |   | 13,244 |   |
|                             |   | $                             | 42,562 |   |                        | $      | 42,542 |   |   | $ | 14,989 |   |   | $ | 14,748 |   |
|                             |   |                          |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008:               |   |                          |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Due in one year or less          |   | $                             | 639    |   |                        | $      | 639 |   |   | $ | - |   |   | $ | - |   |
| Due after one through five years |   |                          | 1,074  |   |                        |   | 1,075 |   |   |   | - |   |   |   | - |   |
| Due after five through ten years |   |                          | 3,067  |   |                        |   | 3,096 |   |   |   | 1,010 |   |   |   | 1,044 |   |
| Due after ten years              |   |                          | 10,091 |   |                        |   | 10,060 |   |   |   | 14,526 |   |   |   | 13,854 |   |
|                             |   | $                             | 14,871 |   |                        | $      | 14,870 |   |   | $ | 15,536 |   |   | $ | 14,898 |   |

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|                                           |   | 2009   |    |   | 2008   |   |
|------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Real estate loans                              |   |   |    |   |   |   |
| Construction, land development, and other land |   | $      | 32,455  |   |   | $      | 39,135 |   |
| 1-4 family residential                         |   |   | 56,900  |   |   |   | 57,814 |   |
| Multifamily residential                        |   |   | 2,902   |   |   |   | 4,481 |   |
| Commercial                                     |   |   | 93,455  |   |   |   | 88,762 |   |
| Total real estate loans                        |   |   | 185,712 |   |   |   | 190,192 |   |
| Commercial loans                               |   |   | 11,703  |   |   |   | 13,314 |   |
| Consumer and other loans                       |   |   | 3,315   |   |   |   | 3,548 |   |
| Total loan portfolio                           |   |   | 200,730 |   |   |   | 207,054 |   |
| Less, deferred fees and other                  |   |   | (12     | )      |   |   | (25 | ) |
| Less, allowance for loan losses                |   |   | (6,531  | )      |   |   | (3,999 | ) |
| Loans, net                                     |   | $      | 194,187 |   |   | $      | 203,030 |   |

|                                     |   | 2009   |   |   | 2008   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                     |   |   |   |   |   |   |
| Balance, beginning of period             |   | $      | 3,999  |   |   | $      | 2,169 |   |
| Provisions charged to operating expenses |   |   | 6,268  |   |   |   | 4,424 |   |
| Loans charged-off                        |   |   | (3,761 | )      |   |   | (2,615 | ) |
| Recoveries                               |   |   | 25     |   |   |   | 21 |   |
| Balance, end of period                   |   | $      | 6,531  |   |   | $      | 3,999 |   |

|                                                           |   | December 31, |   |
|----------------------------------------------------------------|--------|--------------|--------|
|                                                           |   | 2009         |   |   | 2008 |   |
|                                                           |   |         |   |   |   |   |
| Loans evaluated for impairment with a measured impairment      |   | $            | 16,061 |   |   | $ | 13,050 |   |
| Loans evaluated for impairment without a measured impairment   |   |         | 14,788 |   |   |   | 15,433 |   |
| Total impaired loans                                           |   | $            | 30,849 |   |   | $ | 28,483 |   |
| Valuation allowance related to impaired loans                  |   | $            | 4,380  |   |   | $ | 1,717 |   |
| Nonaccrual loans included above in impaired loan totals        |   | $            | 6,715  |   |   | $ | 5,459 |   |
| Total loans past due ninety days or more and still accruing    |   |         | 8      |   |   |   | 1,656 |   |
| Total nonperforming loans (“NPL”)                  |   |         | 6,723  |   |   |   | 7,115 |   |
| Restructured loans                                             |   |         | 17,372 |   |   |   | 3,566 |   |
| Total NPL and restructured loans                               |   | $            | 24,095 |   |   | $ | 10,681 |   |
| Restructured loans included in nonaccrual loans above that are |   |         |   |   |   |   |   |   |
| considered troubled debt restructurings                        |   | $            | 1,842  |   |   | $ | 4,386 |   |
| Average nonaccrual loans during the year                       |   | $            | 7,031  |   |   | $ | 5,130 |   |

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|                         |   | December 31, |   |
|------------------------------|--------|--------------|--------|
|                         |   | 2009         |   |   | 2008 |   |
|                         |   |         |   |   |   |   |
| Balance, beginning of period |   | $            | 3,421  |   |   | $ | - |   |
| Transfers to OREO            |   |         | 513    |   |   |   | 6,034 |   |
| Disposals                    |   |         | (1,621 | ) |   |   | (2,298 | ) |
| Write-downs                  |   |         | (586   | ) |   |   | (315 | ) |
| Balance, end of period       |   | $            | 1,727  |   |   | $ | 3,421 |   |

|                               |   |   |   |   | Accumulated           |   |   |     |   | Estimated |
|------------------------------------|--------|--------|--------|--------|-----------------------|--------|--------|----------|--------|-----------|
|                               |   |   |   |   | Depreciation and |   |   | Net Book |   | Useful    |
|                               |   | Cost   |   |   | Amortization          |   |   | Value    |   | Lives     |
| December 31, 2009:                 |   |   |   |   |                  |   |   |     |   |      |
| Land and land improvements         |   | $      | 750    |   |                  | $      | -      |     |   | $         | 750 |   |   |
| Bank building and improvements     |   |   | 3,455  |   |                  |   | 992    |     |   |      | 2,463 |   | 5 - 40 years |
| Furniture, fixtures, and equipment |   |   | 2,271  |   |                  |   | 2,118  |     |   |      | 153 |   | 3 - 10 years |
|                               |   | $      | 6,476  |   |                  | $      | 3,110  |     |   | $         | 3,366 |   |   |
|                               |   |   |   |   |                  |   |   |     |   |      |   |   |   |
| December 31, 2008:                 |   |   |   |   |                  |   |   |     |   |      |   |   |   |
| Land and land improvements         |   | $      | 750    |   |                  | $      | -      |     |   | $         | 750 |   |   |
| Bank building and improvements     |   |   | 3,443  |   |                  |   | 875    |     |   |      | 2,568 |   | 5 - 40 years |
| Furniture, fixtures, and equipment |   |   | 2,248  |   |                  |   | 1,983  |     |   |      | 265 |   | 3 - 10 years |
|                               |   | $      | 6,441  |   |                  | $      | 2,858  |     |   | $         | 3,583 |   |   |

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| Years Ending      |   |   |   |
|-------------------|--------|--------|--------|
| December 31, |   | Amount |   |
|              |   |   |   |
| 2010              |   | $      | 332    |   |
| 2011              |   |   | 168    |   |
| 2012              |   |   | 84     |   |
| 2013              |   |   | 88     |   |
| 2014              |   |   | 94     |   |
| Thereafter        |   |   | 862    |   |
|              |   | $      | 1,628  |   |

|                                   |   | December 31, 2009   |   |   | December 31, 2008 |   |
|----------------------------------------|--------|---------------------|--------|--------|-------------------|--------|
|                                   |   | Time, $100,000 |   |   | Other Time   |   |   | Time, $100,000 |   |   | Other Time |   |
|                                   |   | And Over            |   |   | Deposits          |   |   | And Over |   |   | Deposits |   |
|                                   |   |                |   |   |              |   |   |   |   |   |   |   |
| Three months or less                   |   | $                   | 12,167 |   |              | $      | 23,750 |   |   | $ | 21,648 |   |   | $ | 22,373 |   |
| Over three through twelve months       |   |                | 27,274 |   |              |   | 42,181 |   |   |   | 21,122 |   |   |   | 42,696 |   |
| Over twelve months through three years |   |                | 5,871  |   |              |   | 16,908 |   |   |   | 8,501 |   |   |   | 28,428 |   |
| Over three years                       |   |                | 1,353  |   |              |   | 341 |   |   |   | 500 |   |   |   | 478 |   |
|                                   |   | $                   | 46,665 |   |              | $      | 83,180 |   |   | $ | 51,771 |   |   | $ | 93,975 |   |

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|                           |   | December 31, |   |
|--------------------------------|--------|--------------|--------|
|                           |   | 2009         |   |   | 2008 |   |
| FHLB of Atlanta advances       |   |         |   |   |   |   |
| Convertible debt               |   | $            | 2,300  |   |   | $ | 2,300 |   |
| Fixed debt                     |   |         | 10,000 |   |   |   | 4,000 |   |
|                           |   |         | 12,300 |   |   |   | 6,300 |   |
| Junior subordinated debentures |   |         | 3,093  |   |   |   | 3,093 |   |
|                           |   | $            | 15,393 |   |   | $ | 9,393 |   |

|                        |   |       |   |               |   |   | Balance of Advances |   |   |                  |   |   |   |   |
|-----------------------------|--------|------------|--------|--------------------|--------|--------|-------------------------------|--------|--------|-----------------------|--------|--------|--------|--------|
|                        |   | Maturity   |   |               |   |   | at December 31,               |   |   | Interest Expense |   |
|                        |   | Date       |   | Interest Rate |   |   | 2009                          |   |   | 2008                  |   |   | 2009   |   |   | 2008 |   |
|                        |   |       |   |               |   |   |                          |   |   |                  |   |   |   |   |   |   |   |
| Convertible fixed rate debt |   | 11/17/2010 |   |               | 4.45   | %      |                          | $      | 2,300  |                  |   | $      | 2,300  |   |   | $ | 104 |   |   | $ | 104 |   |
| Fixed rate advances         |   | 12/20/2010 |   |               | 1.91   | %      |                          |   | 2,000  |                  |   |   | 4,000  |   |   |   | 64 |   |   |   | 45 |   |
| Fixed rate advances         |   | 01/09/2012 |   |               | 2.30   | %      |                          |   | 8,000  |                  |   |   | -      |   |   |   | 181 |   |   |   | - |   |
|                        |   |       |   |               |   |   |                          | $      | 12,300 |                  |   | $      | 6,300  |   |   | $ | 349 |   |   | $ | 149 |   |

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Table of Contents

|                                 |   | Year Ended December 31, |   |
|--------------------------------------|--------|----------------------------------------|--------|
|                                 |   | 2009                                   |   |   | 2008 |   |
| Current:                             |   |                                   |   |   |   |   |
| Federal                              |   | $                                      | 1,536  |   |   | $ | (585 | ) |
| State                                |   |                                   | 263    |   |   |   | (100 | ) |
|                                 |   |                                   | 1,799  |   |   |   | (685 | ) |
| Deferred:                            |   |                                   |   |   |   |   |   |   |
| Federal                              |   |                                   | (1,257 | ) |   |   | (860 | ) |
| State                                |   |                                   | (215   | ) |   |   | (147 | ) |
|                                 |   |                                   | (1,472 | ) |   |   | (1,007 | ) |
| Total income tax provision (benefit) |   | $                                      | 327    |   |   | $ | (1,692 | ) |

|                                |   | 2009   |   |   | 2008      |   |
|-------------------------------------|--------|--------|--------|--------|-----------|--------|
|                                |   |   |   |   | % of |   |   |   |   |   | % of |   |
|                                |   | Amount |   |   | Pretax    |   |   | Amount |   |   | Pretax |   |
|                                |   |   |   |   |      |   |   |   |   |   |   |   |
| Tax computed at statutory rate      |   | $      | (2,350 | )      |      |   | 34.0 | % |   | $ | (1,230 | ) |   |   | 34.0 | % |
| Increase (decrease) resulting from: |   |   |   |   |      |   |   |   |   |   |   |   |   |   |   |   |
| State income taxes                  |   |   | (268   | )      |      |   | 3.9 |   |   |   | (88 | ) |   |   | 2.4 |   |
| Utilization of net operating losses |   |   | 3,232  |   |      |   | (46.8 | ) |   |   |   |   |   |   |   |   |
| Indexed retirement plan             |   |   | (91    | )      |      |   | 1.3 |   |   |   | (78 | ) |   |   | 2.2 |   |
| Nontaxable interest income, net     |   |   | (226   | )      |      |   | 3.3 |   |   |   | (217 | ) |   |   | 6.0 |   |
| Other                               |   |   | 30     |   |      |   | (0.4 | ) |   |   | (79 | ) |   |   | 2.2 |   |
| Income tax provision (benefit)      |   | $      | 327    |   |      |   | (4.7 | )% |   | $ | (1,692 | ) |   |   | 46.8 | % |

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Table of Contents

|                    |   | December 31, |   |
|-------------------------|--------|--------------|--------|
|                    |   | 2009         |   |   | 2008 |   |
| Deferred tax asset:     |   |         |   |   |   |   |
| Federal                 |   | $            | 3,083  |   |   | $ | 1,815 |   |
| State                   |   |         | 528    |   |   |   | 311 |   |
|                    |   |         | 3,611  |   |   |   | 2,126 |   |
| Deferred tax liability: |   |         |   |   |   |   |   |   |
| Federal                 |   |         | (115   | ) |   |   | (105 | ) |
| State                   |   |         | (20    | ) |   |   | (18 | ) |
|                    |   |         | (135   | ) |   |   | (123 | ) |
| Net deferred tax asset  |   |         | 3,476  |   |   |   | 2,003 |   |
| Valuation allowance     |   |         | (2,768 | ) |   |   | - |   |
|                    |   | $            | 708    |   |   | $ | 2,003 |   |

|                                             |   | December 31, |   |
|--------------------------------------------------|--------|--------------|--------|
|                                             |   | 2009         |   |   | 2008 |   |
|                                             |   |         |   |   |   |   |
| Allowance for loan losses                        |   | $            | 1,978  |   |   | $ | 1,250 |   |
| Director and management benefit plans            |   |         | 617    |   |   |   | 514 |   |
| Net unrealized holding losses on securities      |   |         | 7      |   |   |   | - |   |
| Other real estate owned write-downs              |   |         | 402    |   |   |   | 181 |   |
| State income tax net operating loss carryforward |   |         | 322    |   |   |   | 88 |   |
| Nonaccrual interest                              |   |         | 267    |   |   |   | 66 |   |
| Depreciation                                     |   |         | (135   | ) |   |   | (123 | ) |
| Other, net                                       |   |         | 18     |   |   |   | 27 |   |
| Net deferred tax asset                           |   |         | 3,476  |   |   |   | 2,003 |   |
| Valuation allowance                              |   |         | (2,768 | ) |   |   | - |   |
|                                             |   | $            | 708    |   |   | $ | 2,003 |   |

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Table of Contents

|                                                        |   | December 31, |   |
|-------------------------------------------------------------|--------|--------------|--------|
|                                                        |   | 2009         |   |   | 2008 |   |
|                                                        |   |         |   |   |   |   |
| Policy income included in other income                      |   | $            | 229    |   |   | $ | 220 |   |
| Plan expense included in other operating expenses           |   |         | (275   | ) |   |   | (294 | ) |
| Life insurance expense included in other operating expenses |   |         | (17    | ) |   |   | (14 | ) |
| Deferred income tax benefit                                 |   |         | 103    |   |   |   | 110 |   |
| Net after income tax benefit                                |   | $            | 40     |   |   | $ | 22 |   |

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Table of Contents

|                                                                              |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Commitments to extend credit (including unused lines of credit):                  |   |   |   |   |   |   |
| Revolving, open-end lines secured by 1-4 family residential properties            |   |   |   |   |   |   |
| (home equity lines)                                                               |   | $      | 3,630  |   |   | $      | 4,983 |   |
| Commercial real estate, construction, and land development secured by real estate |   |   | 1,186  |   |   |   | 2,186 |   |
| Other                                                                             |   |   | 4,548  |   |   |   | 3,311 |   |
|                                                                              |   |   | 9,364  |   |   |   | 10,480 |   |
| Standby letters of credit                                                         |   |   | 1,174  |   |   |   | 1,701 |   |
|                                                                              |   | $      | 10,538 |   |   | $      | 12,181 |   |

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Table of Contents

----

Table of Contents

|                      |   | 2009   |   |   | 2008   |   |
|---------------------------|--------|--------|--------|--------|--------|--------|
|                      |   |   |   |   |   |   |
| Beginning of year balance |   | $      | 6,570  |   |   | $      | 6,164 |   |
| Additions                 |   |   | 1,597  |   |   |   | 1,040 |   |
| Reductions                |   |   | (268   | )      |   |   | (634 | ) |
| End of year balance       |   | $      | 7,899  |   |   | $      | 6,570 |   |

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Table of Contents

|                                    |   | 2009   |   |   | 2008   |   |
|-----------------------------------------|--------|--------|--------|--------|--------|--------|
|                                    |   |   |   |   |   |   |
| Deposit insurance assessments           |   | $      | 1,014  |   |   | $      | 229 |   |
| Processing and settlement fees          |   |   | 836    |   |   |   | 773 |   |
| OREO and other loan collection expenses |   |   | 520    |   |   |   | 544 |   |
| Professional, legal, and audit fees     |   |   | 589    |   |   |   | 459 |   |
| Write-down of other real estate owned   |   |   | 586    |   |   |   | 315 |   |
| Pension expense                         |   |   | 275    |   |   |   | 295 |   |
| Expensed costs to raise capital         |   |   | 177    |   |   |   | - |   |
| Telephone                               |   |   | 132    |   |   |   | 134 |   |
| Advertising and business development    |   |   | 95     |   |   |   | 145 |   |
| Stationery, printing, and supplies      |   |   | 71     |   |   |   | 107 |   |
| Postage, freight, and courier           |   |   | 63     |   |   |   | 80 |   |
| Director fees                           |   |   | -      |   |   |   | 78 |   |
| Insurance (excluding group insurance)   |   |   | 49     |   |   |   | 46 |   |
| Dues and subscriptions                  |   |   | 39     |   |   |   | 27 |   |
| Other miscellaneous expenses            |   |   | 170    |   |   |   | 197 |   |
|                                    |   | $      | 4,616  |   |   | $      | 3,429 |   |

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Table of Contents

|                                                  |   | Carrying |    |   | Fair   |   |
|-------------------------------------------------------|--------|----------|---------|--------|--------|--------|
|                                                  |   | Amount   |    |   | Value  |   |
| December 31, 2009:                                    |   |     |    |   |   |   |
| Financial Assets                                      |   |     |    |   |   |   |
| Cash and cash equivalents                             |   | $        | 31,083  |   |   | $      | 31,083 |   |
| Investment securities and accrued interest receivable |   |     | 57,844  |   |   |   | 57,603 |   |
| Restricted stock                                      |   |     | 1,151   |   |   |   | 1,151 |   |
| Loans and accrued interest receivable                 |   |     | 194,963 |   |   |   | 189,436 |   |
| Total assets valued                                   |   | $        | 285,041 |   |   | $      | 279,273 |   |
|                                                  |   |     |    |   |   |   |   |   |
| Financial Liabilities                                 |   |     |    |   |   |   |   |   |
| Deposits and accrued interest payable                 |   | $        | 270,156 |   |   | $      | 267,996 |   |
| Other borrowings and accrued interest payable         |   |     | 15,520  |   |   |   | 15,520 |   |
| Total liabilities valued                              |   | $        | 285,676 |   |   | $      | 283,516 |   |
|                                                  |   |     |    |   |   |   |   |   |
| Off-Balance Sheet Commitments                         |   | $        | 10,538  |   |   | $      | 10,538 |   |
|                                                  |   |     |    |   |   |   |   |   |
| December 31, 2008:                                    |   |     |    |   |   |   |   |   |
| Financial Assets                                      |   |     |    |   |   |   |   |   |
| Cash and cash equivalents                             |   | $        | 17,177  |   |   | $      | 17,177 |   |
| Investment securities and accrued interest receivable |   |     | 30,615  |   |   |   | 29,977 |   |
| Restricted stock                                      |   |     | 955     |   |   |   | 955 |   |
| Loans and accrued interest receivable                 |   |     | 203,872 |   |   |   | 205,897 |   |
| Total assets valued                                   |   | $        | 252,619 |   |   | $      | 254,006 |   |
|                                                  |   |     |    |   |   |   |   |   |
| Financial Liabilities                                 |   |     |    |   |   |   |   |   |
| Deposits and accrued interest payable                 |   | $        | 240,134 |   |   | $      | 261,720 |   |
| Other borrowings and accrued interest payable         |   |     | 9,424   |   |   |   | 9,424 |   |
| Total liabilities valued                              |   | $        | 249,558 |   |   | $      | 271,144 |   |
|                                                  |   |     |    |   |   |   |   |   |
| Off-Balance Sheet Commitments                         |   | $        | 12,181  |   |   | $      | 12,181 |   |

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Table of Contents

| (dollars in thousands)                    |   | Quoted Prices    |   |   | Significant |   |   |         |   |   |   |   |
|-------------------------------------------|--------|-----------------------|--------|--------|-------------|--------|--------|--------------|--------|--------|--------|--------|
|                                      |   | in Active             |   |   | Other       |   |   | Significant  |   |   |   |   |
|                                      |   | Markets for           |   |   | Observable  |   |   | Unobservable |   |   |   |   |
|                                      |   | Identical Assets |   |   | Inputs      |   |   | Inputs       |   |   |   |   |
| December 31, 2009                         |   | (Level 1)             |   |   | (Level 2)   |   |   | (Level 3)    |   |   | Total  |   |
| Assets:                                   |   |                  |   |   |        |   |   |         |   |   |   |   |
| Investment securities, available-for-sale |   | $                     | -      |   |        | $      | 42,542 |         |   | $      | -      |   |   | $ | 42,542 |   |
| Total assets at fair value                |   | $                     | -      |   |        | $      | 42,542 |         |   | $      | -      |   |   | $ | 42,542 |   |
|                                      |   |                  |   |   |        |   |   |         |   |   |   |   |   |   |   |   |
| December 31, 2008                         |   |                  |   |   |        |   |   |         |   |   |   |   |   |   |   |   |
| Assets:                                   |   |                  |   |   |        |   |   |         |   |   |   |   |   |   |   |   |
| Investment securities, available-for-sale |   | $                     | -      |   |        | $      | 14,870 |         |   | $      | -      |   |   | $ | 14,870 |   |
| Total assets at fair value                |   | $                     | -      |   |        | $      | 14,870 |         |   | $      | -      |   |   | $ | 14,870 |   |

----

Table of Contents

| (dollars in thousands)        |   | Quoted Prices    |   |   | Significant |   |   |         |   |   |   |   |   |         |   |
|-------------------------------|--------|-----------------------|--------|--------|-------------|--------|--------|--------------|--------|--------|--------|--------|--------|--------------|--------|
|                          |   | in Active             |   |   | Other       |   |   | Significant  |   |   |   |   |   |         |   |
|                          |   | Markets for           |   |   | Observable  |   |   | Unobservable |   |   |   |   |   | Net          |   |
|                          |   | Identical Assets |   |   | Inputs      |   |   | Inputs       |   |   |   |   |   | Gains        |   |
| December 31, 2009             |   | (Level 1)             |   |   | (Level 2)   |   |   | (Level 3)    |   |   | Total  |   |   | (Losses) (1) |   |
| Assets:                       |   |                  |   |   |        |   |   |         |   |   |   |   |   |         |   |
| Impaired loans, net of        |   |                  |   |   |        |   |   |         |   |   |   |   |   |         |   |
| direct write-offs             |   | $                     | -      |   |        | $      | -      |         |   | $      | 16,061 |   |   | $            | 16,061 |   |   |   |   |
| Specific valuation allowances |   |                  | -      |   |        |   | -      |         |   |   | (4,380 | )      |   |         | (4,380 | ) |   |   |   |
| Impaired loans, net           |   |                  | -      |   |        |   | -      |         |   |   | 11,681 |   |   |         | 11,681 |   |   | $ | (3,509 | ) |
| Foreclosed assets             |   |                  | -      |   |        |   | -      |         |   |   | 1,727  |   |   |         | 1,727  |   |   |   | (728 | ) |
| Total assets at fair value    |   | $                     | -      |   |        | $      | -      |         |   | $      | 13,408 |   |   | $            | 13,408 |   |   | $ | (4,237 | ) |
|                          |   |                  |   |   |        |   |   |         |   |   |   |   |   |         |   |   |   |   |   |   |
|                          |   |                  |   |   |        |   |   |         |   |   |   |   |   |         |   |   |   |   |   |   |
| December 31, 2008             |   |                  |   |   |        |   |   |         |   |   |   |   |   |         |   |   |   |   |   |   |
| Assets:                       |   |                  |   |   |        |   |   |         |   |   |   |   |   |         |   |   |   |   |   |   |
| Impaired loans, net of        |   |                  |   |   |        |   |   |         |   |   |   |   |   |         |   |   |   |   |   |   |
| direct write-offs             |   | $                     | -      |   |        | $      | -      |         |   | $      | 13,050 |   |   | $            | 13,050 |   |   |   |   |   |
| Specific valuation allowances |   |                  | -      |   |        |   | -      |         |   |   | (1,717 | )      |   |         | (1,717 | ) |   |   |   |   |
| Impaired loans, net           |   |                  | -      |   |        |   | -      |         |   |   | 11,333 |   |   |         | 11,333 |   |   | $ | (1,110 | ) |
| Foreclosed assets             |   |                  | -      |   |        |   | -      |         |   |   | 3,496  |   |   |         | 3,496  |   |   |   | (311 | ) |
| Total assets at fair value    |   | $                     | -      |   |        | $      | -      |         |   | $      | 14,829 |   |   | $            | 14,829 |   |   | $ | (1,421 | ) |

|                         |   | Impaired |   |   | Foreclosed |   |   |   |   |
|------------------------------|--------|----------|--------|--------|------------|--------|--------|--------|--------|
|                         |   | Loans    |   |   | Assets     |   |   | Total  |   |
|                         |   |     |   |   |       |   |   |   |   |
| Balance, December 31, 2008   |   | $        | 11,333 |   |       | $      | 3,496  |   |   | $ | 14,829 |   |
| Write-downs                  |   |     | (3,509 | )      |       |   | (586   | )      |   |   | (4,095 | ) |
| Net transfers in/out Level 3 |   |     | 3,857  |   |       |   | (1,183 | )      |   |   | 2,674 |   |
| Balance, end of period       |   | $        | 11,681 |   |       | $      | 1,727  |   |   | $ | 13,408 |   |

----

Table of Contents

|                                   |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   | To Be Well-  |   |
|----------------------------------------|--------|------------------------|--------|--------|--------|--------|--------|-------------------|--------|--------|-------------|--------|--------|------------------------|--------|--------|--------------|--------|
|                                   |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   | Capitalized  |   |
|                                   |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   | Under Prompt |   |
|                                   |   |                   |   |   |   |   |   |              |   |   | For Capital |   |   | Corrective Action |   |
|                                   |   | Actual                 |   |   |   |   |   | Adequacy Purposes |   |   | Provisions  |   |
|                                   |   | Amount                 |   |   | Ratio  |   |   | >Amount        |   |   | >Ratio   |   |   | >Amount             |   |   | >Ratio    |   |
|                                   |   | (dollars in thousands) |   |
| As of December 31, 2009:               |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   |         |   |
|                                   |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   |         |   |
| Total capital to risk-weighted assets  |   | $                      | 15,361 |   |   |   | 7.68   | %                 |   |   | NM          |   |   |                   | NM     |   |         | $      | 22,007 |   |   |   | 11.00 | % (1) |
| Tier 1 capital to risk-weighted assets |   | $                      | 12,810 |   |   |   | 6.40   | %                 |   |   | NM          |   |   |                   | NM     |   |         |   | NM |   |   |   | NM |   |
| Tier 1 capital to average assets       |   | $                      | 12,810 |   |   |   | 4.06   | %                 |   |   | NM          |   |   |                   | NM     |   |         | $      | 25,228 |   |   |   | 8.00 | % (1) |
|                                   |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   |         |   |   |   |   |   |   |   |
| As of December 31, 2008:               |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   |         |   |   |   |   |   |   |   |
|                                   |   |                   |   |   |   |   |   |              |   |   |        |   |   |                   |   |   |         |   |   |   |   |   |   |   |
| Total capital to risk-weighted assets  |   | $                      | 21,720 |   |   |   | 10.25  | %                 |   | $      | 16,951      |   |   |                   | 8.00   | %      |         | $      | 21,188 |   |   |   | 10.00 | % |
| Tier 1 capital to risk-weighted assets |   | $                      | 19,055 |   |   |   | 8.99   | %                 |   | $      | 8,475       |   |   |                   | 4.00   | %      |         | $      | 12,713 |   |   |   | 6.00 | % |
| Tier 1 capital to average assets       |   | $                      | 19,055 |   |   |   | 7.25   | %                 |   | $      | 10,519      |   |   |                   | 4.00   | %      |         | $      | 13,149 |   |   |   | 5.00 | % |

| (1) | Ratios required under the Consent Order. |
|-----|------------------------------------------|

| NM | Not meaningful - the Consent Order does not specify. |
|----|------------------------------------------------------|

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Table of Contents

| Condensed Balance Sheets as of December 31:   |   | 2009                             |   |   | 2008   |   |
|-----------------------------------------------|--------|----------------------------------|--------|--------|--------|--------|
|                                          |   | (Dollars in Thousands) |   |
| Assets                                        |   |                             |   |   |   |   |
| Cash and cash equivalents                     |   | $                                | 1      |   |   | $      | 13 |   |
| Investment in and advances to subsidiary bank |   |                             | 12,798 |   |   |   | 19,899 |   |
| Other assets                                  |   |                             | 356    |   |   |   | 178 |   |
| Total                                         |   | $                                | 13,155 |   |   | $      | 20,090 |   |
|                                          |   |                             |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity          |   |                             |   |   |   |   |   |   |
| Liabilities:                                  |   |                             |   |   |   |   |   |   |
| Other long-term borrowings                    |   | $                                | 3,093  |   |   | $      | 3,093 |   |
| Due to subsidiary bank                        |   |                             | 223    |   |   |   | - |   |
| Accrued expenses and other                    |   |                             | 159    |   |   |   | 65 |   |
|                                          |   |                             | 3,475  |   |   |   | 3,158 |   |
| Stockholders' equity                          |   |                             | 9,680  |   |   |   | 16,932 |   |
| Total                                         |   | $                                | 13,155 |   |   | $      | 20,090 |   |

| Years Ended December 31:                        |   | 2009                             |   |   | 2008   |   |
|-------------------------------------------------|--------|----------------------------------|--------|--------|--------|--------|
|                                            |   | (Dollars in Thousands) |   |
|                                            |   |                             |   |   |   |   |
| Equity in net loss of subsidiary bank           |   | $                                | (6,895 | )      |   | $      | (1,685 | ) |
| Other income                                    |   |                             | 5      |   |   |   | 5 |   |
| Interest expense                                |   |                             | (185   | )      |   |   | (185 | ) |
| Other expenses (net of income tax benefit)      |   |                             | (165   | )      |   |   | (62 | ) |
| Net loss                                        |   |                             | (7,240 | )      |   |   | (1,927 | ) |
| Stockholders' Equity:                           |   |                             |   |   |   |   |   |   |
| Beginning of year                               |   |                             | 16,932 |   |   |   | 18,856 |   |
| Net change in unrealized holding gains (losses) |   |                             |   |   |   |   |   |   |
| on securities in subsidiary bank                |   |                             | (12    | )      |   |   | 83 |   |
| Cumulative effect adjustment -                  |   |                             |   |   |   |   |   |   |
| Implementation of EITF 06-4                     |   |                             | -      |   |   |   | (80 | ) |
| End of year                                     |   | $                                | 9,680  |   |   | $      | 16,932 |   |

| Years Ended December 31:                            |   | 2009                             |   |   | 2008   |   |
|-----------------------------------------------------|--------|----------------------------------|--------|--------|--------|--------|
|                                                |   |                             |   |   |   |   |
|                                                |   | (Dollars in Thousands) |   |
| Operating Activities                                |   |                             |   |   |   |   |
| Net loss                                            |   | $                                | (7,240 | )      |   | $      | (1,927 | ) |
| Adjustment to reconcile net loss to net cash        |   |                             |   |   |   |   |   |   |
| provided by (used in) operating activities:         |   |                             |   |   |   |   |   |   |
| Equity in undistributed losses of subsidiary bank   |   |                             | 6,895  |   |   |   | 1,685 |   |
| Other                                               |   |                             | 333    |   |   |   | 247 |   |
| Net Cash Provided By (Used In) Operating Activities |   |                             | (12    | )      |   |   | 5 |   |
| Increase (Decrease) in Cash and Cash Equivalents    |   |                             | (12    | )      |   |   | 5 |   |
| Cash and Cash Equivalents:                          |   |                             |   |   |   |   |   |   |
| Beginning of year                                   |   |                             | 13     |   |   |   | 8 |   |
| End of year                                         |   | $                                | 1      |   |   | $      | 13 |   |

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Table of Contents

| ITEM 15. | EXHIBITS. |
|----------|-----------|

| (a) | Incorporated by reference on Atlantic’s Form 10-KSB for year ended December 31, 1999 |
|-----|--------------------------------------------------------------------------------------------|

| (b) | Incorporated by reference on Atlantic’s Form 10-KSB for year ended December 31, 2000 |
|-----|--------------------------------------------------------------------------------------------|

| (c) | Incorporated by reference on Atlantic’s Form 10-KSB for year ended December 31, 2002 |
|-----|--------------------------------------------------------------------------------------------|

| (d) | Incorporated by reference on Atlantic’s Form 10-KSB for year ended December 31, 2003 |
|-----|--------------------------------------------------------------------------------------------|

| (e) | Incorporated by reference on Atlantic’s Form 10-QSB for quarter ended September 30, 2006 |
|-----|------------------------------------------------------------------------------------------------|

| (f) | Incorporated by reference on Atlantic’s Form 10-K for year ended December 31, 2009 |
|-----|------------------------------------------------------------------------------------------|

| Exhibit No. | Description of Exhibit |
|-------------|------------------------|

| 3.1 | Articles of Incorporation (a) |
|-----|-------------------------------|

| 3.2 | Bylaws (a) |
|-----|------------|

| 4.1 | Specimen Stock Certificate (a) |
|-----|--------------------------------|

| 10.1 | Software License Agreement dated as of October 6, 1997, between Oceanside and File Solutions, Inc. (a) |
|------|--------------------------------------------------------------------------------------------------------|

| 10.2 | File Solutions Software Maintenance Agreement dated as of July 15, 1997, between Oceanside and SPARAK Financial Systems, Inc. (a) |
|------|-----------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Remote Data Processing Agreement dated as of March 3, 1997, between Oceanside and Bankers Data Services, Inc. (a) |
|------|-------------------------------------------------------------------------------------------------------------------|

| 10.4 | Lease dated September 27, 2000, between MANT EQUITIES, LLC and Oceanside (b) |
|------|------------------------------------------------------------------------------|

| 10.5 | Lease dated August 22, 2002, between PROPERTY MANAGEMENT SUPPORT, INC., and Oceanside (c) |
|------|-------------------------------------------------------------------------------------------|

| 10.6 | Change in Control Agreement for Barry W. Chandler (e) |
|------|-------------------------------------------------------|

| 10.7 | Change in Control Agreement for David L. Young (e) |
|------|----------------------------------------------------|

| 10.8 | Change in Control Agreement for Grady R. Kearsey (e) |
|------|------------------------------------------------------|

| 11 | The computation of per share earnings is shown in the consolidated financial statements of Atlantic BancGroup, Inc. and Subsidiaries for December 31, 2008 and 2007, contained in Item 8, on Page 49 of the Notes to Consolidated Financial Statements |
|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 14 | Code of Ethics for Senior Officers Policy (d) |
|----|-----------------------------------------------|

| 21.1 | Subsidiaries of the Registrant (f) |
|------|------------------------------------|

| 31.1 | Certifications of Principal Executive Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act |
|------|-----------------------------------------------------------------------------------------------------------|

| 31.2 | Certifications of Principal Financial Officer required by Rule 13a-14(a)/15d-14(a) under the Exchange Act |
|------|-----------------------------------------------------------------------------------------------------------|

| 32.1 | Certifications of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certifications of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002 |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------|

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Table of Contents

SIGN

|   | ATLANTIC BANCGROUP, INC.                           |
|--------|----------------------------------------------------|
|   |                                               |
|   | /s/     Barry W. Chandler |
|   | Barry W. Chandler                                  |
|   | Principal Executive Officer                        |
|   |                                               |
|   | /s/     David L. Young    |
|   | David L. Young                                     |
|   | Principal Financial Officer                        |

| Signature |                   | Title  |
|-----------|------------------------|--------|
|      |                   |   |   |
| /s/       | Donald F. Glisson, Jr. |   | Chairman of the Board |
|      | Donald F. Glisson, Jr. |   |   |
|      |                   |   |   |
| /s/       | Barry W. Chandler      |   | President, Chief Executive Officer, and Director |
|      | Barry W. Chandler      |   |   |
|      |                   |   |   |
| /s/       | David L. Young         |   | Executive Vice President, Chief Financial Officer, |
|      | David L. Young         |   | and Corporate Secretary |
|      |                   |   |   |
| /s/       | Frank J. Cervone       |   | Director |
|      | Frank J. Cervone       |   |   |
|      |                   |   |   |
| /s/       | G. Keith Watson        |   | Director |
|      | G. Keith Watson        |   |   |
|      |                   |   |   |
| /s/       | Conrad L. Williams     |   | Director |
|      | Conrad L. Williams     |   |   |
|      |                   |   |   |
| /s/       | Dennis M. Wolfson      |   | Director |
|      | Dennis M. Wolfson      |   |   |

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