----

| QUARTERLY REPORT UNDER SECTION 13 OR 15(d) |
|--------------------------------------------|

| OF THE SECURITIES EXCHANGE ACT OF 1934 |
|----------------------------------------|

| For the Quarter Ended June 30, 2009 | Commission file number 000-29599 |
|-------------------------------------|----------------------------------|

| Connecticut              | 06-1559137                              |
|--------------------------|-----------------------------------------|
| (State of incorporation) | (I.R.S. Employer Identification Number) |

----

|     |                                                        | Page   |
|----------|-------------------------------------------------------------|--------|
|     |                                                        |   |
| Part I   | FINANCIAL INFORMATION                                       |   |
|     |                                                        |   |
| Item 1.  | Consolidated Financial Statements                           | 3      |
|     |                                                        |   |
| Item 2.  | Management’s Discussion and Analysis of               |   |
|     | Financial Condition and Results of Operations               | 27     |
|     |                                                        |   |
| Item 3.  | Quantitative and Qualitative Disclosures about Market Risk  | 46     |
|     |                                                        |   |
| Item 4.  | Controls and Procedures                                     | 49     |
|     |                                                        |   |
|     |                                                        |   |
| Part II  | OTHER INFORMATION                                           |   |
|     |                                                        |   |
| Item 1A. | Risk Factors                                                | 49     |
|     |                                                        |   |
| Item 2   | Unregistered Sales of Equity Securities and Use of Proceeds | 49     |
|     |                                                        |   |
| Item 4   | Submission of Matters to a Vote of Security Holders         | 50     |
|     |                                                        |   |
| Item 6.  | Exhibits                                                    | 51     |

----

|                                                                                                                                 | June 30, 2009                                                                                                                                                                                           |   | December 31, 2008                                                                                                                                                                                       |
|--------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                 | (Unaudited)                                                                                                                                                                                             |   |                                                                                                                                                                                                    |
| ASSETS                                                                                                                               |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Cash and due from banks:                                                                                                             |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|    Noninterest bearing deposits and cash                                                                              |  $             12,306,155                                                                                                         |   |  $               3,045,708                                                                                              |
|    Interest bearing deposits                                                                                          |               145,298,663                                                                                                         |   |                   1,240,525                                                                                   |
| Federal funds sold                                                                                                                   |                 20,000,000                                                                                              |   |                 20,000,000                                                                                              |
| Short term investments                                                                                                               |                      143,582                                                                   |   |                      316,518                                                                   |
|      Cash and cash equivalents                                                                              |               177,748,400                                                                                                         |   |                 24,602,751                                                                                              |
|                                                                                                                                 |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Available for sale securities (at fair value)                                                                                        |                 33,399,680                                                                                              |   |                 51,979,677                                                                                              |
| Federal Reserve Bank stock                                                                                                           |                   1,914,700                                                                                   |   |                   1,913,200                                                                                   |
| Federal Home Loan Bank stock                                                                                                         |                   4,508,300                                                                                   |   |                   4,508,300                                                                                   |
| Loans receivable (net of allowance for loan losses:  2009 $16,564,668;                                                     |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|      2008 $16,247,070)                                                                                      |               712,918,298                                                                                                         |   |               788,568,687                                                                                                         |
| Accrued interest and dividends receivable                                                                                            |                   3,505,793                                                                                   |   |                   4,556,755                                                                                   |
| Premises and equipment, net                                                                                                          |                   7,440,345                                                                                   |   |                   7,948,501                                                                                   |
| Deferred tax asset, net                                                                                                              |                 12,113,913                                                                                              |   |                   8,680,075                                                                                   |
| Intangible assets                                                                                                                    |                        77,502                                                        |   |                        85,896                                                        |
| Cash surrender value of life insurance                                                                                               |                 19,515,124                                                                                              |   |                 19,135,105                                                                                              |
| Other assets                                                                                                                         |                   7,693,486                                                                                   |   |                   1,380,031                                                                                   |
|           Total assets                                                             |  $       980,835,542                                                                                                                                            |   |  $       913,358,978                                                                                                                                            |
|                                                                                                                                 |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                                                 |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Liabilities                                                                                                                          |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|      Deposits:                                                                                              |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|           Noninterest bearing deposits                                             |  $             52,382,718                                                                                                         |   |  $             50,194,400                                                                                                         |
|           Interest bearing deposits                                                |               806,994,609                                                                                                         |   |               734,626,951                                                                                                         |
|                Total deposits                             |            859,377,327                                                                                                                           |   |            784,821,351                                                                                                                           |
|      Repurchase agreements                                                                                  |                   7,000,000                                                                                   |   |                   7,000,000                                                                                   |
|      Federal Home Loan Bank borrowings                                                                      |                 50,000,000                                                                                              |   |                 50,000,000                                                                                              |
|      Junior subordinated debt owed to unconsolidated trust                                                  |                   8,248,000                                                                                   |   |                   8,248,000                                                                                   |
|      Accrued expenses and other liabilities                                                                 |                   2,713,823                                                                                   |   |                   4,515,483                                                                                   |
|                Total liabilities                          |            927,339,150                                                                                                                           |   |            854,584,834                                                                                                                           |
|                                                                                                                                 |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Shareholders' equity                                                                                                                 |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|      Preferred stock:  1,000,000 shares authorized; no shares issued                              |                               -    |   |                               -    |
|      Common stock, $2 par value: 60,000,000 shares authorized; shares                                       |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|         issued 2009 4,774,432; outstanding 4,762,727; shares issues 2008                     |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|         4,755,114; outstanding 4,743,409                                                     |                   9,548,864                                                                                   |   |                   9,510,228                                                                                   |
|      Additional paid in capital                                                                             |                 49,651,534                                                                                              |   |                 49,634,337                                                                                              |
|      Accumulated deficit                                                                                    |                 (5,853,704)                                                                                             |   |                    (119,886)                                                                             |
|      Less Treasury stock at cost:  11,705 shares                                                  |                    (160,025)                                                                             |   |                    (160,025)                                                                             |
|      Accumulated other comprehensive income(loss) - net unrealized                                          |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|           gain (loss) on available for sale securities, net of taxes               |                      309,723                                                                   |   |                      (90,510)                                                                  |
|                Total shareholders' equity                 |              53,496,392                                                                                                                |   |              58,774,144                                                                                                                |
|                Total liabilities and shareholders' equity |  $       980,835,542                                                                                                                                            |   |  $       913,358,978                                                                                                                                            |

----

|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
|--------------------------------------|-----------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------|
|                                 |                                                                                    |                                                                                                                                                                      | Three Months Ended June 30,                                                                                                                                               | Six Months Ended June 30,                                                                                               |
|                                 |                                                                                    |                                                                                                                                                                      | 2009                                                                                                                                                                      | 2008                                                                                                                    | 2009                                                                                                                                                                      | 2008                                                                                                                    |
| Interest and Dividend Income         |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |
|                                 | Interest and fees on loans                                                              |  $        10,615,251                                                                                                         |  $        13,775,210                                                                                                         |  $        22,390,192                                                       |  $        27,097,371                                                                                                         |
|                                 | Interest and dividends on investment securities                                         |                 350,091                                                                   |                 702,413                                                                   |                 921,171                 |              1,622,033                                                                                   |
|                                 | Interest on interest bearing deposits in banks                                          |                   19,102                                                        |                     3,786                                             |                   19,393      |                     6,271                                             |
|                                 | Interest on federal funds sold                                                          |                   14,519                                                        |                   42,836                                                        |                   27,441      |                   97,247                                                        |
|                                 |                                                                                    | Total interest and dividend income                                                                                                                                        |          10,998,963                                                                                                          |          14,524,245                                                        |          23,358,197                                                                                                          |          28,822,922                                                        |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
| Interest Expense                     |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |
|                                 | Interest on deposits                                                                    |              6,006,021                                                                                   |              6,824,965                                                                                   |            12,248,794                                            |            14,434,621                                                                                              |
|                                 | Interest on Federal Home Loan Bank borrowings                                           |                 423,469                                                                   |                 380,516                                                                   |                 842,344                 |                 681,786                                                                   |
|                                 | Interest on subordinated debt                                                           |                   89,038                                                        |                 117,806                                                                   |                 182,259                 |                 277,897                                                                   |
|                                 | Interest on other borrowings                                                            |                   76,927                                                        |                   74,391                                                        |                 153,008                 |                 154,040                                                                   |
|                                 |                                                                                    | Total interest expense                                                                                                                                                    |            6,595,455                                                                                               |            7,397,678                                             |          13,426,405                                                                                                          |          15,548,344                                                        |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
|                                 |                                                                                    | Net interest income                                                                                                                                                       |            4,403,508                                                                                               |            7,126,567                                             |            9,931,792                                                                                               |          13,274,578                                                        |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
| Provision for Loan Losses            |              5,956,000 |              1,068,000                                                                                   |              7,556,000                                                                                   |              1,545,000                                 |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
|                                 |                                                                                    | Net interest (loss) income after                                                                                                                                          |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
|                                 |                                                                                    |      provision for loan losses                                                                                                                   |          (1,552,492)                                                                                                         |            6,058,567                                             |            2,375,792                                                                                               |          11,729,578                                                        |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
| Noninterest Income                   |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |
|                                 | Mortgage brokerage referral fees                                                        |                   79,687                                                        |                   96,445                                                        |                   82,182      |                 150,559                                                                   |
|                                 | Loan origination & processing fees                                                  |                   52,057                                                        |                   65,099                                                        |                 121,259                 |                 171,123                                                                   |
|                                 | Fees and service charges                                                                |                 248,793                                                                   |                 254,042                                                                   |                 494,398                 |                 504,898                                                                   |
|                                 | Gain on sale of investment securities                                                   |                             - |                             - |                 434,333                 |                             - |
|                                 | Earnings on cash surrender value of life insurance                                      |                 191,006                                                                   |                 258,491                                                                   |                 380,019                 |                 489,733                                                                   |
|                                 | Other income                                                                            |                   95,054                                                        |                   86,937                                                        |                 177,060                 |                 198,439                                                                   |
|                                 |                                                                                    | Total noninterest income                                                                                                                                                  |               666,597                                                                               |               761,014                             |            1,689,251                                                                                               |            1,514,752                                             |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
| Noninterest Expenses                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |
|                                 | Salaries and benefits                                                                   |              2,926,005                                                                                   |              3,352,789                                                                                   |              5,917,185                                 |              6,663,840                                                                                   |
|                                 | Occupancy and equipment expense, net                                                    |              1,406,889                                                                                   |              1,306,448                                                                                   |              2,812,112                                 |              2,603,367                                                                                   |
|                                 | Data processing and other outside services                                              |                 852,090                                                                   |                 457,878                                                                   |              1,328,561                                 |                 924,227                                                                   |
|                                 | Professional services                                                                   |                 587,568                                                                   |                 229,769                                                                   |              1,149,904                                 |                 453,145                                                                   |
|                                 | Advertising and promotional expenses                                                    |                   12,984                                                        |                 242,175                                                                   |                   70,756      |                 429,170                                                                   |
|                                 | Loan administration and processing expenses                                             |                 171,490                                                                   |                   60,798                                                        |                 269,219                 |                 120,317                                                                   |
|                                 | Regulatory assessments                                                                  |                 922,354                                                                   |                 194,395                                                                   |              1,201,727                                 |                 363,805                                                                   |
|                                 | Other noninterest expenses                                                              |                 567,582                                                                   |                 526,090                                                                   |              1,003,397                                 |              1,034,553                                                                                   |
|                                 |                                                                                    | Total noninterest expenses                                                                                                                                                |            7,446,962                                                                                               |            6,370,342                                             |          13,752,861                                                                                                          |          12,592,424                                                        |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
|                                 |                                                                                    | (Loss) income before income taxes                                                                                                                                         |          (8,332,857)                                                                                                         |               449,239                             |          (9,687,818)                                                                                                         |               651,906                             |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
| Benefit (Provision) for Income Taxes |              3,696,000 |                  (53,000)                                                            |              3,954,000                                                                                   |                (105,000)                     |
|                                 |                                                                                    |                                                                                                                                                                      |                                                                                                                                                                      |                                                                                                                    |                                                                                                                                                                      |                                                                                                                    |
|                                 |                                                                                    | Net (loss) income                                                                                                                                                         |  $      (4,636,857)                                                                                                                    |  $           396,239                                        |  $      (5,733,818)                                                                                                                    |  $           546,906                                        |
|                                 |                                                                                    | Basic (loss) income per share                                                                                                                                             |  $                (0.98)                                                             |  $                  0.08 |  $                (1.21)                                                             |  $                  0.12 |
|                                 |                                                                                    | Diluted (loss) income per share                                                                                                                                           |  $                (0.98)                                                             |  $                  0.08 |  $                (1.21)                                                             |  $                  0.11 |
|                                 |                                                                                    | Dividends per share                                                                                                                                                       |  $        -                                                                                                                       |  $                0.045                 | $       -                                                                                                                                   |  $                0.090                      |

----

|                                                                    |                                                                                                    | Three Months Ended                                                                                  |   | Six Months Ended                                                                                        |
|-------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|
|                                                                    |                                                                                                    | June 30,                                                                                            |   | June 30,                                                                                                |
|                                                                    |                                                                                                    | 2009                                                                                                | 2008   |                                                                                                    | 2009 | 2008 |
|                                                                    |                                                                                                    |                                                                                                |   |                                                                                                    |   |   |
| Net (loss) income                                                       |  $         (4,636,857)                                |  $             396,239        |   |  $         (5,733,818)                                |  $             546,906 |
|                                                                    |                                                                                                    |                                                                                                |   |                                                                                                    |   |   |
| Unrealized holding gains (losses) on securities:                        |                                                                                                    |                                                                                                |   |                                                                                                    |   |
|      Unrealized holding gains (losses) arising |                                                                                                    |                                                                                                |   |                                                                                                    |   |
|      during the period, net of taxes           |                 465,715 |                (180,723) |   |                 400,233 |                   82,815 |
|                                                                    |                                                                                                    |                                                                                                |   |                                                                                                    |   |   |
| Comprehensive (loss) income                                             |  $      (4,171,142)                                                  |  $           215,516                    |   |  $      (5,333,585)                                                  |  $           629,721 |

----

|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |  Retained                                                                                                                  |                                                                                                                            | Accumulated                                                                                                                                             |                                                                                             |
|----------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
|                                                                                                                 |                                                                                                                |                                                                                                                            |  Additional                                                                                                                                  |  Earnings                                                                                                                  |                                                                                                                            | Other                                                                                                                                                   |                                                                                             |
|                                                                                                                 |  Number of                                                                                                     |  Common                                                                                                                    |  Paid-In                                                                                                                                     |  (Accumulated                                                                                                              |  Treasury                                                                                                                  |    Comprehensive                                                                                                                         |
|                                                                                                                 |  Shares                                                                                                        |  Stock                                                                                                                     |  Capital                                                                                                                                     |  Deficit)                                                                                                                  |  Stock                                                                                                                     | Income (Loss)                                                                                                                                           |  Total                                                                                      |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Six months ended June 30, 2008                                                                                       |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Balance at December 31, 2007                                                                                         |     4,746,844                                                                                   |  $    9,493,688                                                                                        |  $    49,549,119                                                                                                         |  $   7,846,060                                                                                              |  $                  -            |  $           (53,500)                                                                       |  $     66,835,367                                                  |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Comprehensive income                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
|   Net income                                                                                               |                    - |                      - |                         - |          546,906                                                                   |                      - |                          - |              546,906            |
|   Unrealized holding gain on available for                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |
|      sale securities, net of taxes                                                          |                    - |                      - |                         - |                      - |                                                                                                                            |                 82,815                                                  |                82,815 |
|                Total comprehensive income |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |              629,721                                                                   |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Issuance of common stock                                                                                             |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
|    Stock options exercised                                                                            |            5,000                                             |             10,000                                                  |               40,550                                                        |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                50,550 |
|    Stock issued to directors                                                                          |            3,270                                             |               6,540                                       |               43,393                                                        |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                49,933 |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |              100,483            |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Treasury Strock                                                                                                      |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
|    Stock purchased under buyback                                                                      |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |           (40,692)                                                            |                                                                                                                                                    |              (40,692)           |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Dividends                                                                                                            |                    - |                      - |                         - |         (427,583)                                                                       |                                                                                                                            |                          - |            (427,583)                      |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Balance, June 30, 2008                                                                                               |     4,755,114                                                                                   |  $    9,510,228                                                                                        |  $    49,633,062                                                                                                         |  $   7,965,383                                                                                              |  $       (40,692)                                                                       |  $             29,315                                                             |  $     67,097,296                                                  |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Six months ended June 30, 2009                                                                                       |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Balance at December 31, 2008                                                                                         |     4,743,409                                                                                   |  $    9,510,228                                                                                        |  $    49,634,337                                                                                                         |  $     (119,886)                                                                                  |  $     (160,025)                                                                                  |  $           (90,510)                                                                       |  $     58,774,144                                                  |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Comprehensive loss                                                                                                   |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
|   Net loss                                                                                                 |                    - |                      - |                         - |      (5,733,818)                                                                                       |                      - |                          - |         (5,733,818)                                      |
|   Unrealized holding gain on available                                                                     |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |
|      for sale securities, net of taxes                                                      |                    - |                      - |                         - |                      - |                      - |               400,233                                                             |              400,233            |
|                Total comprehensive loss   |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |         (5,333,585)                                      |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Issuance of common stock                                                                                             |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
|      Stock issued to directors                                                              |          19,318                                                        |             38,636                                                  |               17,197                                                        |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                55,833 |
|                                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                            |                                                                                                                            |                                                                                                                                                    |                                                                                             |
| Balance, June 30, 2009                                                                                               |     4,762,727                                                                                   |  $    9,548,864                                                                                        |  $    49,651,534                                                                                                         |  $  (5,853,704)                                                                                                  |  $     (160,025)                                                                                  |  $           309,723                                                                        |  $     53,496,392                                                  |

----

|                                  |                                                                                           | Six Months Ended                                                                                                                                              |
|---------------------------------------|------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                  |                                                                                           | June 30,                                                                                                                                                      |
|                                  |                                                                                           | 2009                                                                                                                                                          | 2008 |
|                                  |                                                                                           |                                                                                                                                                          |   |
| Cash Flows from Operating Activities: |                                                                                           |                                                                                                                                                          |
|                                  | Net (loss) income                                                                              |  $         (5,733,818)                                                                                      |  $             546,906 |
|                                  | Adjustments to reconcile net (loss) income to net cash                                         |                                                                                                                                                          |   |
|                                  | (used in) provided by operating activities:                                                    |                                                                                                                                                          |   |
|                                  | Amortization and accretion of investment premiums and discounts, net                           |                   52,608                                            |                   92,541 |
|                                  | Provision for loan losses                                                                      |              7,556,000                                                                       |              1,545,000 |
|                                  | Gain on sale of investment securities                                                          |                (434,333)                                                           |                           - |
|                                  | Amortization of core deposit intangible                                                        |                     8,394                                 |                     8,844 |
|                                  | Earnings on cash surrender value of life insurance                                             |                (380,019)                                                           |                (489,733) |
|                                  | Depreciation and amortization                                                                  |                 838,314                                                       |                 777,602 |
|                                  | Loss on disposal of bank premises and equipment                                                |                        111                 |                          46 |
|                                  | Payment of fees to directors in common stock                                                   |                   55,833                                            |                   49,933 |
|                                  | Deferred Income Taxes                                                                          |             (3,679,142)                                                                           |                           - |
|                                  | Changes in assets and liabilities:                                                             |                                                                                                                                                          |   |
|                                  |      Decrease in deferred loan fees                                   |                (381,531)                                                           |                (230,322) |
|                                  |      Decrease (increase) in accrued interest and dividends receivable |              1,050,962                                                                       |                (591,798) |
|                                  |      Increase in other assets                                         |                (876,955)                                                           |                (491,294) |
|                                  |      (Decrease) increase in accrued expenses and other liabilities    |             (1,588,205)                                                                           |                 740,530 |
|                                  |      Net cash (used in) provided by operating activities              |          (3,511,781)                                                                                             |            1,958,255 |
|                                  |                                                                                           |                                                                                                                                                          |   |
| Cash Flows from Investing Activities: |                                                                                           |                                                                                                                                                          |
|                                  | Purchases of available for sale securities                                                     |             (9,345,528)                                                                           |             (8,366,036) |
|                                  | Proceeds from sales of available for sale securities                                           |            19,852,541                                                                                  |                           - |
|                                  | Principal repayments on available for sale securities                                          |              3,100,244                                                                       |            15,472,814 |
|                                  | Proceeds from redemptions of available for sale securities                                     |              6,000,000                                                                       |              9,000,000 |
|                                  | Purchases of Federal Reserve Bank Stock                                                        |                    (1,500)                                     |                    (1,500) |
|                                  | Purchases of Federal Home Loan Bank Stock                                                      |                           - |             (1,543,200) |
|                                  | Net decrease (increase) in loans                                                               |            63,039,420                                                                                  |           (91,727,670) |
|                                  | Purchase of bank premises and equipment                                                        |                (330,269)                                                           |                (855,614) |
|                                  |      Net cash provided by (used in) investing activities              |          82,314,908                                                                                              |        (78,021,206) |
|                                  |                                                                                           |                                                                                                                                                          |   |
| Cash Flows from Financing Activities: |                                                                                           |                                                                                                                                                          |
|                                  | Net increase in demand, savings and money market deposits                                      |            69,754,878                                                                                  |            56,280,924 |
|                                  | Net increase (decrease) in time certificates of deposits                                       |              4,801,098                                                                       |             (1,332,766) |
|                                  | Net proceeds from FHLB borrowings                                                              |                           - |            40,946,000 |
|                                  | Proceeds from issuance of common stock                                                         |                           - |                   50,550 |
|                                  | Payments under stock buyback program                                                           |                           - |                  (40,692) |
|                                  | Dividends paid on common stock                                                                 |                (213,454)                                                           |                (427,442) |
|                                  |      Net cash provided by financing activities                        |          74,342,522                                                                                              |          95,476,574 |
|                                  |                                                                                           |                                                                                                                                                          |   |
|                                  |      Net increase in cash and cash equivalents                        |       153,145,649                                                                                                               |          19,413,623 |

----

|                                                                    |                                          | Six Months Ended                                                                                                                                               |
|-------------------------------------------------------------------------|-----------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                    |                                          | June 30,                                                                                                                                                       |
|                                                                    |                                          | 2009                                                                                                                                                           | 2008 |
|                                                                    |                                          |                                                                                                                                                           |   |
| Cash and Cash Equivalents:                                              |                                          |                                                                                                                                                           |
|                                                                    | Beginning                                     |            24,602,751                                                                                   |            14,011,914 |
|                                                                    |                                          |                                                                                                                                                           |   |
|                                                                    | Ending                                        |  $      177,748,400                                                                                                         |  $        33,425,537 |
|                                                                    |                                          |                                                                                                                                                           |   |
| Supplemental Disclosures of Cash Flow Information                       |                                          |                                                                                                                                                           |
|                                                                    | Cash paid for:                                |                                                                                                                                                           |   |
|                                                                    |      Interest        |  $        13,459,875                                                                                              |  $        15,430,085 |
|                                                                    |                                          |                                                                                                                                                           |   |
|                                                                    |      Income taxes    |  $          1,379,080                                                                                   |  $             855,935 |
|                                                                    |                                          |                                                                                                                                                           |   |
| Supplemental disclosures of noncash investing and financing activities: |                                          |                                                                                                                                                           |
|                                                                    |                                          |                                                                                                                                                           |   |
|                                                                    | Unrealized holding gain on available for sale |                                                                                                                                                           |   |
|                                                                    | securities arising during the period          |  $             645,536                                                                   |  $             133,572 |
|                                                                    |                                          |                                                                                                                                                           |   |
|                                                                    | Transfer of loans to other real estate owned  |  $          5,436,500                                                                                   |  $                         - |
|                                                                    |                                          |                                                                                                                                                           |   |
|                                                                    | Dividends declared on common stock            |  $                         - |  $             213,749 |
|                                                                    |                                          |                                                                                                                                                           |   |

----

----

|                                                |                                                      | Gross                                                                                                                                       | Gross                                                                                                                                       |                                                      |
|-----------------------------------------------------|-----------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|
|                                                | Amortized                                                 | Unrealized                                                                                                                                  | Unrealized                                                                                                                                  | Fair                                                      |
|                                                | Cost                                                      | Gains                                                                                                                                       | Losses                                                                                                                                      | Value                                                     |
| June 30, 2009:                                      |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|                                                |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
| U. S. Government sponsored                          |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|    agency obligations                |  $     5,000,000            |  $            9,375                                                        |  $                    -            |  $     5,009,375            |
| U. S. Government Agency and sponsored               |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|    agency mortgage-backed securities |       25,018,158            |              93,735                                                        |           (124,341)                                                                       |       24,987,552            |
| Money market preferred equity securities            |         2,881,969 |            520,785                                                                   |                        - |         3,402,754 |
| Total Available-for-Sale Securities                 |  $   32,900,127                       |  $        623,895                                                                              |  $       (124,341)                                                                                  |  $   33,399,681                       |
|                                                |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
| December 31, 2008:                                  |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|                                                |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
| U. S. Government sponsored                          |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|    agency obligations                |  $   10,000,000                       |  $        102,248                                                                              |  $                    -            |  $   10,102,248                       |
| U. S. Government Agency and sponsored               |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|    agency mortgage-backed securities |       38,246,799            |            231,766                                                                   |           (479,996)                                                                       |       37,998,569            |
| Money market preferred equity securities            |         3,878,860 |                        - |                        - |         3,878,860 |
| Total Available-for-Sale Securities                 |  $   52,125,659                       |  $        334,014                                                                              |  $       (479,996)                                                                                  |  $   51,979,677                       |

|                       |                                           |                                                                  |              |                                           |                                                                  |   |                                |                                                       |
|----------------------------|------------------------------------------------|-----------------------------------------------------------------------|-------------------|------------------------------------------------|-----------------------------------------------------------------------|--------|-------------------------------------|------------------------------------------------------------|
|                       | Less Than 12 Months                            |                                                                  | 12 Months or More |                                           | Total                                                                 |
|                       | Fair                                           | Unrealized                                                            |              | Fair                                           | Unrealized                                                            |   | Fair                                | Unrealized                                                 |
| June 30, 2009:             | Value                                          | Loss                                                                  |              | Value                                          | Loss                                                                  |   | Value                               | Loss                                                       |
|                       |                                           |                                                                  |              |                                           |                                                                  |   |                                |                                                       |
| Mortgage-backed securities |  $     5,032,313 |  $         (65,385) |              |  $   13,089,248            |  $         (58,956) |   |  $   18,121,561 |  $       (124,341) |
|                       |                                           |                                                                  |              |                                           |                                                                  |   |                                |                                                       |
| December 30, 2008:         |                                           |                                                                  |              |                                           |                                                                  |   |                                |                                                       |
|                       |                                           |                                                                  |              |                                           |                                                                  |   |                                |                                                       |
| Mortgage-backed securities |  $   14,593,894            |  $       (317,703)            |              |  $     5,527,631 |  $       (162,293)            |   |  $   20,121,525 |  $       (479,996) |

----

|                                  | Amoritzed Cost                       | Fair Value                                |
|-----------------------------------------------------------|--------------------------------------|-------------------------------------------|
| June 30, 2009:                                            |                                 |                                      |
|  Maturity:                                           |                                 |                                      |
|      1-5 years                   | $     5,000,000  |  $     5,009,375 |
|      Mortgage-backed securities  | 25,018,158                      |  24,987,552                          |
| Total                                                | $   30,018,158        |  $   29,996,927            |
|                                                      |                                 |                                      |
| December 30, 2008:                                        |                                 |                                      |
| Maturity:                                            |                                 |                                      |
|      1-5 years                   | $   10,000,000        | $  10,102,248                   |
|      Mortgage-backed securities  | 38,246,799                      | 37,998,569                           |
| Total                                                | $   48,246,799        | $   48,100,817             |

----

|                           |   | Three months ended                                                       | Six months ended                                                                                              |
|--------------------------------|--------|--------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------|
|                           |   |  June 30,                                                           |  June 30,                                                                                                |
| (Thousands of dollars)         |   | 2009                                                                     | 2008                                                                                                          | 2009 | 2008 |
|                           |   |                                                                     |                                                                                                          |   |   |
| Balance at beginning of period |   |  $ 16,630,905                                                       |  $6,149,620                                                                                              |  $ 16,247,070 |  $5,672,620 |
| Provision for loan losses      |   |       5,956,000                            |    1,068,000                                                                                   |       7,556,000 |    1,545,000 |
| Charge-offs                    |   |     (6,095,148)                                      |                   - |     (7,311,433) |                   - |
| Recoveries                     |   |            72,911 |                   - |            73,031 |                   - |
| Balance at end of period       |   |     16,564,668                                       |    7,217,620                                                                                   |     16,564,668 |    7,217,620 |

|                                                  | June 30,                                                         |   | December 31,                                                     |
|-------------------------------------------------------|------------------------------------------------------------------|--------|------------------------------------------------------------------|
|                                                  | 2009                                                             |   | 2008                                                             |
|                                                  |                                                             |   |                                                             |
| Impaired loans receiveable for which there is a       |                                                             |   |                                                             |
|    related allowance for credit losses |  $      27,801,090            |   |  $      42,535,777            |
|                                                  |                                                             |   |                                                             |
| Impaired loans receiveable for which there is no      |                                                             |   |                                                             |
|    related allowance for credit losses |  $      92,066,409            |   |  $      37,620,136            |
|                                                  |                                                             |   |                                                             |
| Allowance for credit losses related to impaired loans |  $        4,401,143 |   |  $        4,211,954 |

----

| Three months ended June 30, 2009                           |                                                                                       |                                                                                    |    |   |
|------------------------------------------------------------|--------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|---------|--------|
|                                                       |                                                                                       |                                                                                    |    |   |
|                                                       | Net Loss                                                                                   | Shares                                                                                  |    | Amount |
| Basic and Diluted Loss Per Share                           |                                                                                       |                                                                                    |    |   |
|    Loss attributable to common shareholders |  $            (4,636,857) |              4,745,956 |  $ | (0.98) |

----

| Three months ended June 30, 2008                                          |                                                                                                                                                                                        |                                                                                                               |    |                                                          |
|---------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|---------|---------------------------------------------------------------|
|                                                                      |                                                                                                                                                                                        |                                                                                                               |    |                                                          |
|                                                                      | Net Income                                                                                                                                                                                  | Shares                                                                                                             |    | Amount                                                        |
| Basic Income Per Share                                                    |                                                                                                                                                                                        |                                                                                                               |    |                                                          |
|    Income available to common shareholders                 |  $                 396,239                                                                        |              4,751,209                            |  $ | 0.08                                                          |
|      Effect of Dilutive Securities               |                                                                                                                                                                                        |                                                                                                               |    |                                                          |
|         Stock Options outstanding |                                - |                   18,119 |    |           - |
| Diluted Income Per Share                                                  |                                                                                                                                                                                        |                                                                                                               |    |                                                          |
|    Income available to common shareholders                 |                                                                                                                                                                                        |                                                                                                               |    |                                                          |
|    plus assumed conversions                                |  $                 396,239                                                                        |              4,769,328                            |  $ | 0.08                                                          |
| Six months ended June 30, 2009                             |                                                                                       |                                                                                    |    |   |
|------------------------------------------------------------|--------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|---------|--------|
|                                                       |                                                                                       |                                                                                    |    |   |
|                                                       | Net Loss                                                                                   | Shares                                                                                  |    | Amount |
| Basic and Diluted Loss Per Share                           |                                                                                       |                                                                                    |    |   |
|    Loss attributable to common shareholders |  $            (5,733,818) |              4,744,690 |  $ | (1.21) |
| Six months ended June 30, 2008                                            |                                                                                                                                                                                        |                                                                                                               |    |                                 |
|---------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|---------|--------------------------------------|
|                                                                      |                                                                                                                                                                                        |                                                                                                               |    |                                 |
|                                                                      | Net Income                                                                                                                                                                                  | Shares                                                                                                             |    | Amount                               |
| Basic Income Per Share                                                    |                                                                                                                                                                                        |                                                                                                               |    |                                 |
|    Income available to common shareholders                 |  $                 546,906                                                                        |              4,751,114                            |  $ | 0.12                                 |
|      Effect of Dilutive Securities               |                                                                                                                                                                                        |                                                                                                               |    |                                 |
|         Stock Options outstanding |                                - |                   18,787 |    |      (0.01) |
| Diluted Income Per Share                                                  |                                                                                                                                                                                        |                                                                                                               |    |                                 |
|    Income available to common shareholders                 |                                                                                                                                                                                        |                                                                                                               |    |                                 |
|    plus assumed conversions                                |  $                 546,906                                                                        |              4,769,901                            |  $ | 0.11                                 |

----

|                              | Three Months Ended                                                                                                        |                                                                                                                      | Six Months Ended                                                                                                          |
|-----------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                              | June 30, 2009                                                                                                             |                                                                                                                      | June 30, 2009                                                                                                             |
|                              | Before Tax                                                                                                                |                                                                                                                      | Net of Tax                                                                                                                |   |  Before Tax |   |  Net of Tax |
|                              | Amount                                                                                                                    | Tax Effect                                                                                                                | Amount                                                                                                                    |   |  Amount |  Tax Effect |  Amount |
|                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized holding gains          |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| arising during the period         |  $       751,160                                                                  |  $     (285,445)                                                                            |  $       465,715                                                                  |   |  $    1,079,869 |  $     (410,350) |  $       669,519 |
|                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Reclassification adjustment       |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| for gains recognized in income    |                     - |                     - |                     - |   |         (434,333) |           165,047 |         (269,286) |
|                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized holding gains (losses) |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| on available for sale securities, |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| net of taxes                      |  $       751,160                                                                  |  $     (285,445)                                                                            |  $       465,715                                                                  |   |  $       645,536 |  $     (245,303) |  $       400,233 |
|                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
|                              | Three Months Ended                                                                                                        |                                                                                                                      | Six Months Ended                                                                                                          |
|                              | June 30, 2008                                                                                                             |                                                                                                                      | June 30, 2008                                                                                                             |
|                              | Before Tax                                                                                                                |                                                                                                                      | Net of Tax                                                                                                                |   |  Before Tax |   |  Net of Tax |
|                              | Amount                                                                                                                    | Tax Effect                                                                                                                | Amount                                                                                                                    |   |  Amount |  Tax Effect |  Amount |
|                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized holding (loss)gain     |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| arising during the period         |  $     (291,489)                                                                            |  $       110,766                                                                  |  $     (180,723)                                                                            |   |  $       133,572 |  $       (50,757) |  $         82,815 |
|                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Reclassification adjustment       |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| for gains recognized in income    |                     - |                     - |                     - |   |                       - |                       - |                       - |
|                              |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized holding (loss) gain    |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| on available for sale securities, |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| net of taxes                      |  $     (291,489)                                                                            |  $       110,766                                                                  |  $     (180,723)                                                                            |   |  $       133,572 |  $       (50,757) |  $         82,815 |

----

|   | Commitments to extend credit:       |                                                                              |                                                                   |
|--------|-------------------------------------|-----------------------------------------------------------------------------------|------------------------------------------------------------------------|
|   |                                | Future loan commitments                                                           |  $         9,219,400 |   |
|   |                                | Unused lines of credit                                                            |           49,156,293 |   |
|   |                                | Undisbursed construction loans                                                    |           51,101,772 |   |
|   | Financial standby letters of credit |             1,381,600 |                                                                   |
|   |                                |                                                                              |  $     110,859,065                       |   |

----

----

|   | o | Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quotedprices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                          |  Quoted Prices in                                                                                                                                                           | Significant                         | Significant                                                                                                                      |                                                                    |
|-------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|
|                          |  Active Markets                                                                                                                                                             | Observable                          | Unobservable                                                                                                                     | Balance                                                                 |
|                          |  for Identical Assets                                                                                                                                                       | Inputs                              | Inputs                                                                                                                           | as of                                                                   |
| June 30, 2009                 | (Level 1)                                                                                                                                                                        | (Level 2)                           | (Level 3)                                                                                                                        | June 30, 2009                                                           |
|                          |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
| Securities available-for-sale |  $                            - |  $   33,399,681 |  $                    - |  $         33,399,681 |
|                          |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
|                          |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
|                          | Quoted Prices in                                                                                                                                                                 | Significant                         | Significant                                                                                                                      |                                                                    |
|                          | Active Markets                                                                                                                                                                   | Observable                          | Unobservable                                                                                                                     | Balance                                                                 |
|                          | for Identical Assets                                                                                                                                                             | Inputs                              | Inputs                                                                                                                           | as of                                                                   |
| December 31, 2008             | (Level 1)                                                                                                                                                                        | (Level 2)                           | (Level 3)                                                                                                                        | December 31, 2008                                                       |
|                          |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
| Securities available-for-sale |  $                            - |  $   51,979,677 |  $                    - |  $         51,979,677 |
|                          |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |

----

|               |  Quoted Prices in                                                                                                                                                     | Significant                                                                                                                      | Significant                    |                                                         |                                                       |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|--------------------------------|--------------------------------------------------------------|------------------------------------------------------------|
|               |  Active Markets                                                                                                                                                       | Observable                                                                                                                       | Unobservable                   | Balance                                                      | Total                                                      |
|               |  for Identical Assets                                                                                                                                                 | Inputs                                                                                                                           | Inputs                         | as of                                                        | Gains                                                      |
| June 30, 2009      | (Level 1)                                                                                                                                                                  | (Level 2)                                                                                                                        | (Level 3)                      | June 30, 2009                                                | (Losses)                                                   |
|               |                                                                                                                                                                       |                                                                                                                             |                           |                                                         |                                                       |
| Impaired Loans (1) |  $                           - |  $                    - |  $  111,316,118 |  $       111,316,118 |  $       (166,000) |

|               | Quoted Prices in                                                                                                                                                           | Significant                                                                                                                      | Significant                               |                                                                    |   |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------------------------------------|--------|
|               | Active Markets                                                                                                                                                             | Observable                                                                                                                       | Unobservable                              | Balance                                                                 |   |
|               | for Identical Assets                                                                                                                                                       | Inputs                                                                                                                           | Inputs                                    | as of                                                                   |   |
| December 31, 2008  | (Level 1)                                                                                                                                                                  | (Level 2)                                                                                                                        | (Level 3)                                 | December 31, 2008                                                       |   |
|               |                                                                                                                                                                       |                                                                                                                             |                                      |                                                                    |   |
| Impaired Loans (1) |  $                           - |  $                    - |  $    57,233,190 |  $         57,233,190 |   |

|                    |  Quoted Prices in                                                                                                                                                     | Significant                                                                                                                      | Significant                                    |                                                 |
|-------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------------|
|                    |  Active Markets                                                                                                                                                       | Observable                                                                                                                       | Unobservable                                   | Balance                                              |
|                    |  for Identical Assets                                                                                                                                                 | Inputs                                                                                                                           | Inputs                                         | as of                                                |
|                    | (Level 1)                                                                                                                                                                  | (Level 2)                                                                                                                        | (Level 3)                                      | June 30, 2009                                        |
|                    |                                                                                                                                                                       |                                                                                                                             |                                           |                                                 |
| Other real estate owned |  $                           - |  $                    - |  $     5,436,500 |  $      5,436,500 |
|                    |                                                                                                                                                                       |                                                                                                                             |                                           |                                                 |

----

----

|                                                 |                                                                  |                                                                              |
|------------------------------------------------------|-----------------------------------------------------------------------|-----------------------------------------------------------------------------------|
|                                                 | June 30, 2009                                                         | December 31, 2008                                                                 |
|                                                 |  Recorded                                                        |                                                                              |  Recorded |   |
|                                                 |  Book                                                            |  Fair                                                                        |  Book |  Fair |
|                                                 |  Balance                                                         |  Value                                                                       |  Balance |  Value |
| Financial Assets:                                    |                                                                  |                                                                              |   |   |
| Cash and noninterest bearing balances due from banks | $12,306                                                               | $12,306                                                                           | $3,046 | $3,046 |
| Interest-bearing deposits due from banks             |     145,299                                       |           145,299               |         1,241 |           1,241 |
| Federal funds sold                                   |       20,000                            |         20,000                            |       20,000 |         20,000 |
| Short-term investments                               |            144 |              144 |            317 |              317 |
| Available-for-sale securities                        |       33,400                            |         33,400                            |       51,980 |         51,980 |
| Federal Reserve Bank stock                           |         1,915                 |           1,915                 |         1,913 |           1,913 |
| Federal Home Loan Bank stock                         |         4,508                 |           4,508                 |         4,508 |           4,508 |
| Loans receivable, net                                |     712,918                                       |       714,333                                       |     788,569 |       795,938 |
| Accrued interest receivable                          |         3,506                 |           3,506                 |         4,557 |           4,557 |
|                                                 |                                                                  |                                                                              |   |   |
| Financial Liabilities:                               |                                                                  |                                                                              |   |   |
| Demand deposits                                      | $52,383                                                               | $52,383                                                                           | $50,194 | $50,194 |
| Savings deposits                                     |       59,506                            |         59,506                            |       46,040 |         46,040 |
| Money market deposits                                |     118,504                                       |       118,504                                       |       68,242 |         68,242 |
| Negotiable orders of withdrawal                      |       23,383                            |         23,383                            |       19,545 |         19,545 |
| Time deposits                                        |     605,602                                       |       603,759                                       |     600,801 |       601,357 |
| FHLB Borrowings                                      |       50,000                            |         48,421                            |       50,000 |         50,106 |
| Repurchase agreements                                |         7,000                 |           7,793                 |         7,000 |           8,365 |
| Subordinated debentures                              |         8,248                 |           8,248                 |         8,248 |           8,248 |
| Accrued interest payable                             |            460 |              460 |            493 |              493 |

----

----

----

----

----

----

|                                                |   | June 30,                                                                                                  | December 31,                                                                                              |
|-----------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------|
|                                                |   | 2009                                                                                                      | 2008                                                                                                      |
|                                                |   |                                                                                                      |                                                                                                      |
| U. S. Government sponsored                          |   |                                                                                                      |                                                                                                      |
|   agency obligations                      |   |  $             5,009,375            |  $           10,102,248                       |
| U. S. Government Agency and sponsored               |   |                                                                                                      |                                                                                                      |
|    agency mortgage-backed securities |   |               24,987,552            |               37,998,569            |
| Money market preferred                              |   |                                                                                                      |                                                                                                      |
|   equity securities                       |   |                 3,402,754 |                 3,878,860 |
| Total Available for Sale Securities                 |   |  $           33,399,681                       |  $           51,979,677                       |

----

----

|   |                                        | June 30,                                                                                                                              | December 31,                                                                                                                          |   |
|--------|---------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------|--------|
|   |                                        | 2009                                                                                                                                  | 2008                                                                                                                                  |   |
|   | Real Estate                                 |                                                                                                                                  |                                                                                                                                  |   |
|   |    Commercial                |  $           241,934,123                                                  |  $           262,570,339                                                  |   |
|   |    Residential               |               175,508,127                                       |               170,449,780                                       |   |
|   |    Construction              |               219,648,954                                       |               257,117,081                                       |   |
|   |    Construction to permanent |                 20,951,158                            |                 35,625,992                            |   |
|   | Commercial                                  |                 24,375,800                            |                 33,860,527                            |   |
|   | Consumer home equity                        |                 46,355,869                            |                 45,022,128                            |   |
|   | Consumer installment                        |                   1,174,164                 |                      993,707 |   |
|   | Total Loans                                 |               729,948,195                                       |               805,639,554                                       |   |
|   | Premiums on purchased loans                 |                      135,109 |                      158,072 |   |
|   | Net deferred loan fees                      |                     (600,338)     |                     (981,869)     |   |
|   | Allowance for loan losses                   |                (16,564,668)                                |                (16,247,070)                                |   |
|   | Loans receivable, net                       |  $           712,918,298                                                  |  $           788,568,687                                                  |   |

----

|   |                                         | June 30,                                                                                                           | December 31,                                                                                                                       |   |
|--------|----------------------------------------------|--------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | (Thousands of dollars)                       | 2009                                                                                                               | 2008                                                                                                                               |   |
|   |                                         |                                                                                                               |                                                                                                                               |   |
|   | Loans past due over 90 days                  |  $                 6,265 |  $                    337 |   |
|   |      still accruing |                                                                                                               |                                                                                                                               |   |
|   | Non accruing loans                           |                 119,867            |                   80,156                 |   |
|   |      Total          |  $             126,132                       |  $               80,493                            |   |
|   | % of Total Loans                             | 17.69%                                                                                                             | 10.21%                                                                                                                             |   |
|   | % of Total Assets                            | 12.86%                                                                                                             | 8.81%                                                                                                                              |   |

----

----

----

|                                                        | Three months ended                                                             |                                                                                                                      | Six months ending |
|-------------------------------------------------------------|--------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|-------------------|
|                                                        |  June 30,                                                                 |                                                                                                                      |  June 30,    |
| (Thousands of dollars)                                      | 2009                                                                           | 2008                                                                                                                      |              | 2009 | 2008 |
|                                                        |                                                                           |                                                                                                                      |              |   |   |
| Balance at beginning of period                              |  $  16,630,905                                                  |  $   6,149,620                                                                                        |              |  $      16,247,070 |  $   5,672,620 |
| Charge-offs                                                 |      (6,095,148)                                      |                     - |              |          (7,311,433) |                     - |
| Recoveries                                                  |             72,911 |                     - |              |                 73,031 |                     - |
| Net Charge-offs                                             |      (6,022,237)                                      |                     - |              |          (7,238,402) |                     - |
| Provision charged to operations                             |        5,956,000                            |       1,068,000                                                                             |              |            7,556,000 |       1,545,000 |
| Balance at end of period                                    |  $  16,564,668                                                  |  $   7,217,620                                                                                        |              |  $      16,564,668 |  $   7,217,620 |
|                                                        |                                                                           |                                                                                                                      |              |   |   |
| Ratio of net charge-offs during                             |                                                                           |                                                                                                                      |              |   |   |
|      the period to average loans   |                                                                           |                                                                                                                      |              |   |   |
|      outstanding during the period | 0.78%                                                                          | 0.00%                                                                                                                     |              | 0.91% | 0.00% |

----

|   |                                                                | June 30,                                                                                                   | December 31,                                                                                               |   |
|--------|---------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|--------|
|   |                                                                | 2009                                                                                                       | 2008                                                                                                       |   |
|   |                                                                |                                                                                                       |                                                                                                       |   |
|   | Non-interest bearing                                                |  $             52,382,718            |  $             50,194,400            |   |
|   |                                                                |                                                                                                       |                                                                                                       |   |
|   | Interest bearing                                                    |                                                                                                       |                                                                                                       |   |
|   |      NOW                                   |                 23,383,309 |                 19,544,552 |   |
|   |      Savings                               |                 59,505,652 |                 46,040,086 |   |
|   |      Money market                          |               118,504,027            |                 68,241,790 |   |
|   |      Time certificates, less than $100,000 |               349,985,599            |               405,298,436            |   |
|   |      Time certificates, $100,000 or more   |               255,616,022            |               195,502,087            |   |
|   | Total interest bearing                                              |               806,994,609            |               734,626,951            |   |
|   | Total Deposits                                                      |  $           859,377,327                       |  $           784,821,351                       |   |

----

----

|                               | Three months ended June 30,                                 |
|------------------------------------|-------------------------------------------------------------|
|                               |                                                        | 2009 |   |   |   | 2008 |   |
|                               |                                                        | Interest |   |   |   | Interest |   |
|                               | Average                                                     | Income/ | Average |   | Average | Income/ | Average |
|                               | Balance                                                     | Expense | Rate |   | Balance | Expense | Rate |
|                               | (dollars in thousands)                                      |
| Interest earning assets:           |                                                        |   |   |   |   |   |   |
| Loans                              |  $   775,845                            |  $    10,615 | 5.47% |   |  $   772,634 |  $   13,775 | 7.13% |
| Investments                        |        36,759            |            350 | 3.81% |   |        63,580 |           702 | 4.42% |
| Interest bearing deposits in banks |        59,418            |              19 | 0.13% |   |          1,443 |               4 | 1.11% |
| Federal funds sold                 |        49,670            |              15 | 0.12% |   |          8,122 |             43 | 2.12% |
| Total interest                     |                                                        |   |   |   |   |   |   |
|   earning assets         |      921,692                       |        10,999 | 4.77% |   |      845,779 |       14,524 | 6.87% |
|                               |                                                        |   |   |   |   |   |   |
| Cash and due from banks            |        26,182            |   |   |   |          6,354 |   |   |
| Premises and equipment, net        |          7,392 |   |   |   |          7,755 |   |   |
| Allowance for loan losses          |       (16,778)                |   |   |   |        (6,329) |   |   |
| Other assets                       |        37,407            |   |   |   |        29,352 |   |   |
| Total Assets                       |  $   975,895                            |   |   |   |  $   882,911 |   |   |
|                               |                                                        |   |   |   |   |   |   |
| Interest bearing liabilities:      |                                                        |   |   |   |   |   |   |
| Deposits                           |  $   802,738                            |  $      6,006 | 2.99% |   |  $   692,331 |  $     6,825 | 3.94% |
| FHLB advances                      |        50,011            |            423 | 3.38% |   |        47,152 |           381 | 3.23% |
| Subordinated debt                  |          8,248 |              89 | 4.32% |   |          8,248 |           118 | 5.72% |
| Other borrowings                   |          7,000 |              77 | 4.40% |   |          7,000 |             74 | 4.23% |
| Total interest                     |                                                        |   |   |   |   |   |   |
|   bearing liabilities    |      867,997                       |          6,595 | 3.04% |   |      754,731 |         7,398 | 3.92% |
|                               |                                                        |   |   |   |   |   |   |
| Demand deposits                    |        47,062            |   |   |   |        56,136 |   |   |
| Accrued expenses and               |                                                        |   |   |   |   |   |   |
|   other liabilities      |          3,822 |   |   |   |          4,455 |   |   |
| Shareholders' equity               |        57,014            |   |   |   |        67,589 |   |   |
| Total liabilities and equity       |  $   975,895                            |   |   |   |  $   882,911 |   |   |
|                               |                                                        |   |   |   |   |   |   |
| Net interest income                |                                                        |  $      4,404 |   |   |   |  $     7,126 |   |
| Interest margin                    |                                                        |   | 1.91% |   |   |   | 3.37% |
| Interest spread                    |                                                        |   | 1.73% |   |   |   | 2.95% |

----

|                               | Six months ended June 30,                                   |
|------------------------------------|-------------------------------------------------------------|
|                               |                                                        | 2009 |   |   |   | 2008 |   |
|                               |                                                        | Interest |   |   |   | Interest |   |
|                               | Average                                                     | Income/ | Average |   | Average | Income/ | Average |
|                               | Balance                                                     | Expense | Rate |   | Balance | Expense | Rate |
|                               | (dollars in thousands)                                      |
| Interest earning assets:           |                                                        |   |   |   |   |   |   |
| Loans                              |  $   792,495                            |  $    22,390 | 5.65% |   |  $   747,691 |  $   27,097 | 7.25% |
| Investments                        |        46,073            |            922 | 4.00% |   |        72,721 |         1,623 | 4.46% |
| Interest bearing deposits in banks |        31,099            |              19 | 0.12% |   |            994 |               6 | 1.21% |
| Federal funds sold                 |        41,978            |              27 | 0.13% |   |          7,443 |             97 | 2.61% |
| Total interest                     |                                                        |   |   |   |   |   |   |
|   earning assets         |      911,645                       |        23,358 | 5.12% |   |      828,849 |       28,823 | 6.95% |
|                               |                                                        |   |   |   |   |   |   |
| Cash and due from banks            |        21,425            |   |   |   |          6,158 |   |   |
| Premises and equipment, net        |          7,510 |   |   |   |          7,701 |   |   |
| Allowance for loan losses          |       (16,715)                |   |   |   |        (6,083) |   |   |
| Other assets                       |        34,006            |   |   |   |        29,074 |   |   |
| Total Assets                       |  $   957,871                            |   |   |   |  $   865,699 |   |   |
|                               |                                                        |   |   |   |   |   |   |
| Interest bearing liabilities:      |                                                        |   |   |   |   |   |   |
| Deposits                           |  $   783,287                            |  $    12,249 | 3.13% |   |  $   683,302 |  $   14,434 | 4.22% |
| FHLB advances                      |        50,005            |            842 | 3.37% |   |        40,911 |           682 | 3.33% |
| Subordinated debt                  |          8,248 |            182 | 4.41% |   |          8,248 |           278 | 6.74% |
| Other borrowings                   |          7,000 |            153 | 4.37% |   |          7,008 |           154 | 4.39% |
| Total interest                     |                                                        |   |   |   |   |   |   |
|   bearing liabilities    |      848,540                       |        13,426 | 3.16% |   |      739,469 |       15,548 | 4.21% |
|                               |                                                        |   |   |   |   |   |   |
| Demand deposits                    |        46,952            |   |   |   |        53,548 |   |   |
| Accrued expenses and               |                                                        |   |   |   |   |   |   |
|   other liabilities      |          4,394 |   |   |   |          5,134 |   |   |
| Shareholders' equity               |        57,985            |   |   |   |        67,548 |   |   |
| Total liabilities and equity       |  $   957,871                            |   |   |   |  $   865,699 |   |   |
|                               |                                                        |   |   |   |   |   |   |
| Net interest income                |                                                        |  $      9,932 |   |   |   |  $   13,275 |   |
| Interest margin                    |                                                        |   | 2.18% |   |   |   | 3.20% |
| Interest spread                    |                                                        |   | 1.96% |   |   |   | 2.74% |

----

|                               | Three months ended June 30,                                                                 |                                                                                  | Six months ended June 30,                                                             |
|------------------------------------|---------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                               | 2009 vs 2008                                                                                |                                                                                  | 2009 vs 2008                                                                          |
|                               | Increase (decrease) in Interest                                                             |                                                                                  | Increase (decrease) in Interest                                                       |
|                               | Income/Expense                                                                              |                                                                                  | Income/Expense                                                                        |
|                               | Due to change in:                                                                           |                                                                                  | Due to change in:                                                                     |
|                               | Volume                                                                                      | Rate                                                                                  | Total                                                                                 |   | Volume | Rate | Total |
|                               | (dollars in thousands)                                                                      |                                                                                  | (dollars in thousands)                                                                |
| Interest earning assets:           |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Loans                              |  $          57                       |  $    (3,217)                                                |  $    (3,160)                                                |   |  $         1,549 |  $       (6,256) |  $       (4,707) |
| Investments                        |          (265)                                 |            (87)                |          (352)                           |   |              (547) |              (154) |              (701) |
| Interest bearing deposits in banks |              22            |              (7)     |              15      |   |                 22 |                 (9) |                 13 |
| Federal funds sold                 |              45            |            (73)                |            (28)                |   |                 95 |              (165) |               (70) |
| Total interest                     |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
|   earning assets         |          (141)                                 |        (3,384)                                     |        (3,525)                                     |   |             1,119 |           (6,584) |           (5,465) |
|                               |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Interest bearing liabilities:      |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Deposits                           |  $        983                                  |  $    (1,802)                                                |  $       (819)                                |   |  $         1,903 |  $       (4,088) |  $       (2,185) |
| FHLB advances                      |              22            |              20      |              42      |   |               150 |                 10 |               160 |
| Subordinated debt                  |                - |            (29)                |            (29)                |   |                   - |               (96) |               (96) |
| Other borrowings                   |                - |               3 |               3 |   |                   - |                 (1) |                 (1) |
| Total interest                     |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
|   bearing liabilities    |         1,005                                       |        (1,808)                                     |          (803)                           |   |             2,053 |           (4,175) |           (2,122) |
|                               |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Net interest income                |  $    (1,146)                                                      |  $    (1,576)                                                |  $    (2,722)                                                |   |  $          (934) |  $       (2,409) |  $       (3,343) |

----

----

----

----

|   |                      | June 30, 2009 |   | December 31, 2008 |   |
|--------|---------------------------|---------------|--------|-------------------|--------|
|   | Total Risk-based Capital  | 10.22%        |   | 10.27%            |   |
|   | Tier 1 Risk-based Capital | 8.95%         |   | 9.01%             |   |
|   | Leverage Capital          | 6.08%         |   | 7.23%             |   |

----

|   |                      | June 30, 2009 |   | December 31, 2008 |   |
|--------|---------------------------|---------------|--------|-------------------|--------|
|   | Total Risk-based Capital  | 10.20%        |   | 10.22%            |   |
|   | Tier 1 Risk-based Capital | 8.93%         |   | 8.96%             |   |
|   | Leverage Capital          | 6.07%         |   | 7.19%             |   |

----

----

|   |                 | Basis  | Interest Rate   | June 30, | December 31, |   |
|--------|----------------------|--------|-----------------|----------|--------------|--------|
|   |                 | Points | Risk Guidelines | 2009     | 2008         |   |
|   |                 |   |            |     |         |   |
|   | GAP percentage total |   | +/- 10%         | 6.25%    | 2.51%        |   |
|   | Net interest income  | 200    | +/- 10%         | -4.62%   | -1.32%       |   |
|   |                 | -200   | +/- 10%         | 0.98%    | -0.54%       |   |
|   | Net portfolio value  | 200    | +/- 20%         | -14.37%  | -12.48%      |   |
|   |                 | -200   | +/- 20%         | 0.59%    | 5.40%        |   |

----

| Net Interest Income and Economic Value |
|----------------------------------------|
| Summary Performance                    |
|                                   |   |   |   |   |   |   |   |   |
| June 30, 2009                          |
|                                   | Net Interest Income |   | Net Portfolio Value |
| Projected Interest                     | Estimated | $ Change | % Change |   |   | Estimated | $ Change | % Change |
| Rate Scenario                          | Value | from Base | from Base |   |   | Value | from Base | from Base |
| + 200                                  |       27,607 |       (1,337) | -4.62% |   |   |       49,479 |       (8,305) | -14.37% |
| + 100                                  |       28,253 |          (691) | -2.39% |   |   |       53,721 |       (4,063) | -7.03% |
| BASE                                   |       28,944 |   |   |   |   |       57,784 |   |   |
| - 100                                  |       29,334 |            390 | 1.35% |   |   |       58,850 |         1,066 | 1.84% |
| - 200                                  |       29,228 |            284 | 0.98% |   |   |       58,125 |            341 | 0.59% |
|                                   |   |   |   |   |   |   |   |   |
| December 31, 2008                      |
|                                   | Net Interest Income |   | Net Portfolio Value |
| Projected Interest                     | Estimated | $ Change | % Change |   |   | Estimated | $ Change | % Change |
| Rate Scenario                          | Value | from Base | from Base |   |   | Value | from Base | from Base |
| + 200                                  |       22,609 |          (302) | -1.32% |   |   |       67,804 |       (9,668) | -12.48% |
| + 100                                  |       22,745 |          (166) | -0.73% |   |   |       72,462 |       (5,010) | -6.47% |
| BASE                                   |       22,911 |   |   |   |   |       77,472 |   |   |
| - 100                                  |       22,927 |              16 | 0.07% |   |   |       80,422 |         2,950 | 3.81% |
| - 200                                  |       22,788 |          (123) | -0.54% |   |   |       81,658 |         4,186 | 5.40% |

----

|   | (a) | On June 19, 2009, the Company issued 19,318 shares of its common stock to its six outside directors. Pursuant to a policy adopted by the Board of Directors, outside directors serving on the board receive an annual award of the Company’s common stock at each year’s annual meeting valued at $10,000 based on the last reported sale price on the trading day immediately preceding the Annual Meeting.  Theaward is prorated for directors who have served less than a full year.  The shares have not been registered under the Securities Act of 1933 and therefore were issued in a private placement transaction exempt from registration under Section 4(2) of the Securities Act. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   | For purposes of this transaction, the Company shares were valued at $2.89 per share, for a total value of $55,833. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | (b) | Not applicable |
|--------|-----|----------------|

|   | (c) | Not applicable |
|--------|-----|----------------|

|   | (d) | Not applicable |
|--------|-----|----------------|

|   | (a) | The Annual Meeting of Shareholders (the “Annual Meeting”) of Patriot National Bancorp, Inc was held on June 17, 2009. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Not applicable pursuant to Instruction 3 to Item 4 of Part II of Form 10-Q. |
|--------|-----|----------------------------------------------------------------------------------|

|   | (c) | The following is a brief description of the matters voted upon at the Annual Meeting and the number of votes cast for, against or withheld as well as the number of abstentions to each such matter: |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   |                      |      |   | Withheld     |
|--------|---------------------------|-----------|--------|--------------|
|   |                      |      |   | Authority to |
|   |                      | For       |   | Vote For     |
|   | Angelo De Caro            | 3,958,536 |   | 259,091      |
|   | John J. Ferguson          | 3,980,805 |   | 236,822      |
|   | Brian A. Fitzgerald       | 4,009,051 |   | 208,576      |
|   | John A. Geoghegan         | 4,003,982 |   | 213,645      |
|   | L. Morris Glucksman       | 4,003,922 |   | 213,705      |
|   | Charles F. Howell         | 3,980,805 |   | 236,822      |
|   | Michael F. Intrieri       | 4,000,813 |   | 216,814      |
|   | Robert F. O’Connell | 3,980,805 |   | 236,822      |
|   | Raymond B. Smyth          | 4,026,651 |   | 190,976      |
|   | Philip W. Wolford         | 4,021,091 |   | 196,536      |

|   | (ii) | The consideration of a proposal to ratify the appointment of McGladrey & Pullen, LLP as independent auditors for Bancorp for the year ending December 31, 2009. |
|--------|------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | For       |   | Against |   | Abstain |   |
|--------|-----------|--------|---------|--------|---------|--------|
|   | 4,162,291 |   | 53,786  |   | 1,600   |   |

|   | (d) | Not applicable. |
|--------|-----|-----------------|

----

| Item 6: | Exhibits |
|---------|----------|

|   | No.      | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|--------|----------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 2        | Agreement and Plan of Reorganization dated as of June 28, 1999 between Bancorp and the Bank (incorporated by reference to Exhibit 2 to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission File No. 000-29599)).                                                                                                                                                                                                              |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3(i)     | Certificate of Incorporation of Bancorp, (incorporated by reference to Exhibit 3(i) to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission File No. 000-29599)).                                                                                                                                                                                                                                                                   |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3(i)(A)  | Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp, Inc. dated July 16, 2004 (incorporated by reference to Exhibit 3(i)(A) to Bancorp's Annual Report on Form 10-KSB for the year ended December 31, 2004 (Commission File No. 000-29599)).                                                                                                                                                                                |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3(i)(B)  | Certificate of Amendment of Certificate of Incorporation of Patriot National Bancorp, Inc. dated June 15, 2006 (incorporated by reference to Exhibit 3(i)(B) to Bancorp’s Quarterly Report of Form 10-Q for the quarter ended September 30, 2006 (commission File No. 000-29599)).                                                                                                                                                                          |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 3(ii)    | Amended and Restated By-laws of Bancorp (incorporated by reference to Exhibit 3.2 to Bancorp’s Current Report on Form  8 - K dated December 26, 2007 (Commission File No. 1-32007))                                                                                                                                                                                                                                                     |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 4        | Reference is made to the Rights Agreement dated April 19, 2004 by and between Patriot National Bancorp, Inc. and Registrar and Transfer Company filed as Exhibit 99.2 to Bancorp’s Report on Form 8-K filed on April 19, 2004, and the First Amendment to the Rights Agreement dated January 23, 2008 filed as Exhibit 4.1to Bancorp’s Report on Form 8-K dated January 24, 2008 which are incorporated herein by reference. |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|   | 10(a)(1) | 2001 Stock Appreciation Rights Plan of Bancorp (incorporated by reference to Exhibit 10(a)(1) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2001 (Commission File No. 000-29599)).                                                                                                                                                                                                                                    |

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|   | No.       | Description                                                                                                                                                                                                                                                                                                                          |
|--------|-----------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      |                                                                                                                                                                                                                                                                                                                                 |
|   | 10(a)(3)  | Employment Agreement, dated as of October 23, 2000, as amended by a First Amendment, dated as of March 21, 2001, among the Bank, Bancorp and Charles F. Howell (incorporated by reference to Exhibit 10(a)(4) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2000 (Commission File No. 000-29599)). |
|   |      |                                                                                                                                                                                                                                                                                                                                 |
|   | 10(a)(4)  | Change of Control Agreement, dated as of January 1, 2007 among Angelo De Caro, and Patriot National Bank and Bancorp (incorporated by reference to Exhibit 10(a)(4) to Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 000-29599)).                         |
|   |      |                                                                                                                                                                                                                                                                                                                                 |
|   | 10(a)(5)  | Employment Agreement dated as of January 1, 2008 among  Patriot National Bank, Bancorp and Robert F. O’Connell (incorporated by reference to Exhibit 10(a)(5) to Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2007 (Commission File No. 000-29599)).               |
|   |      |                                                                                                                                                                                                                                                                                                                                 |
|   | 10(a)(6)  | Change of Control Agreement, dated as of January 1, 2007 among Robert F. O’Connell, Patriot National Bank and Bancorp (incorporated by reference to Exhibit 10(a)(6) to Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 000-29599)).                       |
|   |      |                                                                                                                                                                                                                                                                                                                                 |
|   | 10(a)(9)  | License agreement dated July 1, 2003 between Patriot National Bank and L. Morris Glucksman (incorporated by reference to Exhibit 10(a)(9) to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 2003 (Commission File No. 000-29599)).                                                                |
|   |      |                                                                                                                                                                                                                                                                                                                                 |
|   | 10(a)(10) | Employment Agreement dated as of January 1, 2007 among Patriot National Bank, Bancorp and Charles F. Howell (incorporated by reference to Exhibit 10(a)(10) to Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 000-29599)).                                      |
|   |      |                                                                                                                                                                                                                                                                                                                                 |
|   | 10(a)(11) | Change of Control Agreement, dated as of January 1, 2007 among Charles F. Howell, Patriot National Bank and Bancorp (incorporated by reference to Exhibit 10(a)(11) to Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 000-29599)).                              |

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|   | No.       | Description                                                                                                                                                                                                                                                                                             |
|--------|-----------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 10(a)(12) | 2005 Director Stock Award Plan (incorporated by reference to Exhibit 10(a)(12) to Bancorp’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2006 (Commission File No. 000 - 295999)).                                                                                 |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 10(a)(13) | Change of Control Agreement, dated as of January 1, 2007 between Martin G. Noble and Patriot National Bank (incorporated by reference to Exhibit 10(a)(13) to Bancorp’s Annual Report on Form 10-K for the year ended December  31, 2006 (Commission File No. 000-29599)).    |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 10(a)(14) | Change of Control Agreement, dated as of January 1, 2007 among Philip W. Wolford, Patriot National Bank and Bancorp (incorporated by reference to Exhibit 10(a)(14) to Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2006 (Commission File No. 000-29599)). |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 10(a)(15) | Formal Written Agreement between Patriot National Bank and the Office of the Comptroller of the Currency (incorporated by reference to Exhibit 10(a)(15) to Bancorp’s Current Report on Form 8-K dated February 9, 2009 (Commission File No. 000-29599)).                                         |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 10(c)     | 1999 Stock Option Plan of the Bank (incorporated by reference to Exhibit 10(c) to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission File No. 000-29599)).                                                                                                                   |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 14        | Code of Conduct for Senior Financial Officers (incorporated by reference to Exhibit 14 to Bancorp’s Annual Report on Form 10 - KSB for the year ended December 31, 2004 (Commission File No. 000-29599).                                                                           |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 21        | Subsidiaries of Bancorp (incorporated by reference to Exhibit 21 to Bancorp’s Annual Report on Form 10-KSB for the year ended December 31, 1999 (Commission File No. 000-29599)).                                                                                                                 |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 31(1)     | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer                                                                                                                                                                                                                                       |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 31(2)     | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer                                                                                                                                                                                                                                       |
|   |      |                                                                                                                                                                                                                                                                                                    |
|   | 32        | Section 1350 Certifications                                                                                                                                                                                                                                                                             |

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|   | Patriot National Bancorp, inc.                                |
|--------|---------------------------------------------------------------|
|   | (Registrant)                                                  |
|   |                                                          |
|   |                                                          |
|   | By:   /s/  Robert F. O’Connell |
|   | Robert F. O’Connell,                                    |
|   | Senior Executive Vice President                               |
|   | Chief Financial Officer                                       |
|   | (On behalf of the registrant and aschief financial officer)   |

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