| STATE OF INCORPORATION: | IRS EMPLOYER IDENTIFICATION NO: |
|-------------------------|---------------------------------|
| PENNSYLVANIA            | 23-3017653                      |

| Large accelerated filer  ̈                | Accelerated filer  ̈    |
|-----------------------------------------------|-----------------------------|
| Non-accelerated filer  ̈                  | Smaller reporting company x |
| (Do not check if a smaller reporting company) |

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|                                     |         |                                                                                                                |         | Page   |
|------------------------------------------|--------------|---------------------------------------------------------------------------------------------------------------------|--------------|--------|
| Part I.  Financial Information |         |                                                                                                                |
|                                     |         |                                                                                                                |         |   |
| Item 1.                                  |         | Financial Statements (unaudited):                                                                                   |         |   |
|                                     |         | Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010                                              |         | 3      |
|                                     |         | Consolidated Statements of Income for the three months ended March 31, 2011 and 2010                                |         | 4      |
|                                     |         | Consolidated Statements of Changes in Shareholders’ Equity for the three months ended March 31, 2011 and 2010 |         | 5      |
|                                     |         | Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010                            |         | 6      |
|                                     |         | Notes to Consolidated Financial Statements (Unaudited)                                                              |         | 7      |
|                                     |         |                                                                                                                |         |   |
| Item 2.                                  |         | Management’s Discussion and Analysis of Financial Condition and Results of Operations                         |         | 25     |
|                                     |         |                                                                                                                |         |   |
| Item 3.                                  |         | Quantitative and Qualitative Disclosure about Market Risk                                                           |         | 39     |
|                                     |         |                                                                                                                |         |   |
| Item 4T.                                 |         | Controls and Procedures                                                                                             |         | 43     |
|                                     |         |                                                                                                                |         |   |
| Part II.  Other Information    |         |                                                                                                                |
|                                     |         |                                                                                                                |         |   |
| Item 1.                                  |         | Legal Proceedings                                                                                                   |         | 44     |
|                                     |         |                                                                                                                |         |   |
| Item 1A.                                 |         | Risk Factors                                                                                                        |         | 44     |
|                                     |         |                                                                                                                |         |   |
| Item 2.                                  |         | Unregistered Sales of Equity Securities and Use of Proceeds                                                         |         | 44     |
|                                     |         |                                                                                                                |         |   |
| Item 3.                                  |         | Defaults upon Senior Securities                                                                                     |         | 44     |
|                                     |         |                                                                                                                |         |   |
| Item 4.                                  |         | (Removed and Reserved)                                                                                              |         | 44     |
|                                     |         |                                                                                                                |         |   |
| Item 5.                                  |         | Other Information                                                                                                   |         | 44     |
|                                     |         |                                                                                                                |         |   |
| Item 6.                                  |         | Exhibits                                                                                                            |         | 44     |
|                                     |         |                                                                                                                |         |   |
| Signatures                               |         |                                                                                                                |         | 46     |
|                                     |         |                                                                                                                |         |   |
| Exhibit index                            |    |                                                                                                                |    | 47     |

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|                                                                                                                                |   | March 31, 2011 |        |   | December 31, 2010 |   |
|-------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|--------|-----------------------------|--------|
|                                                                                                                                |   |                     |        |   |                        |   |
| Assets:                                                                                                                             |   |                     |        |   |                        |   |
| Cash and due from banks                                                                                                             |   | $                        | 9,700,307   |   |                        | $      | 8,071,151 |   |
| Interest-bearing deposits with financial institutions                                                                               |   |                     | 37,742,960  |   |                        |   | 14,896,194 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Total cash and cash equivalents                                                                                                     |   |                     | 47,443,267  |   |                        |   | 22,967,345 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Available-for-sale securities                                                                                                       |   |                     | 90,414,897  |   |                        |   | 82,940,996 |   |
| Held-to-maturity securities                                                                                                         |   |                     | 466,968     |   |                        |   | 490,375 |   |
| Federal Home Loan Bank Stock                                                                                                        |   |                     | 4,314,900   |   |                        |   | 4,542,000 |   |
| Loans, net (allowance for loan losses of $8,223,978 in 2011; $7,897,822 in 2010)                                                    |   |                     | 411,273,322 |   |                        |   | 407,903,329 |   |
| Loans held-for-sale (fair value $314,677 in 2011; $216,845 in 2010)                                                                 |   |                     | 309,600     |   |                        |   | 213,000 |   |
| Foreclosed assets held-for-sale                                                                                                     |   |                     | 1,131,595   |   |                        |   | 1,260,895 |   |
| Bank premises and equipment, net                                                                                                    |   |                     | 14,421,943  |   |                        |   | 14,763,873 |   |
| Cash surrender value of bank owned life insurance                                                                                   |   |                     | 9,501,732   |   |                        |   | 9,424,926 |   |
| Accrued interest receivable                                                                                                         |   |                     | 2,271,160   |   |                        |   | 2,228,409 |   |
| Other assets                                                                                                                        |   |                     | 14,747,128  |   |                        |   | 14,938,004 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Total assets                                                                                                                        |   | $                        | 596,296,512 |   |                        | $      | 561,673,152 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Liabilities:                                                                                                                        |   |                     |        |   |                        |   |   |   |
| Deposits:                                                                                                                           |   |                     |        |   |                        |   |   |   |
| Interest-bearing                                                                                                                    |   | $                        | 399,916,954 |   |                        | $      | 396,667,300 |   |
| Non-interest-bearing                                                                                                                |   |                     | 113,283,383 |   |                        |   | 85,780,392 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Total deposits                                                                                                                      |   |                     | 513,200,337 |   |                        |   | 482,447,692 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Accrued interest payable and other liabilities                                                                                      |   |                     | 2,662,440   |   |                        |   | 2,903,045 |   |
| Short-term borrowings                                                                                                               |   |                     | 11,131,104  |   |                        |   | 8,548,400 |   |
| Long-term debt                                                                                                                      |   |                     | 21,000,000  |   |                        |   | 21,000,000 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Total liabilities                                                                                                                   |   |                     | 547,993,881 |   |                        |   | 514,899,137 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Shareholders' equity:                                                                                                               |   |                     |        |   |                        |   |   |   |
| Preferred stock authorized 5,000,000 shares with no par value; none issued                                                          |   |                     | -           |   |                        |   | - |   |
| Capital stock, no par value (10,000,000 shares authorized; shares issued and outstanding; 2,199,380 in 2011; and 2,178,028 in 2010) |   |                     | 21,420,565  |   |                        |   | 21,046,646 |   |
| Retained earnings                                                                                                                   |   |                     | 30,225,700  |   |                        |   | 29,544,522 |   |
| Accumulated other comprehensive loss                                                                                                |   |                     | (3,343,634  | )      |                        |   | (3,817,153 | ) |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Total shareholders' equity                                                                                                          |   |                     | 48,302,631  |   |                        |   | 46,774,015 |   |
|                                                                                                                                |   |                     |        |   |                        |   |   |   |
| Total liabilities and shareholders' equity                                                                                          |   | $                        | 596,296,512 |   |                        | $      | 561,673,152 |   |

----

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|                                                                                                                         |   | Three months ended |      |
|------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-----------|
|                                                                                                                         |   | March 31, 2011     |      |   | March 31, 2010 |   |
|                                                                                                                         |   |                         |      |   |   |   |
| Interest income:                                                                                                             |   |                         |      |   |   |   |
| Loans:                                                                                                                       |   |                         |      |   |   |   |
| Taxable                                                                                                                      |   | $                            | 5,807,080 |   |   | $ | 6,080,017 |   |
| Nontaxable                                                                                                                   |   |                         | 127,433   |   |   |   | 146,296 |   |
| Interest-bearing deposits with financial institutions                                                                        |   |                         | 17,479    |   |   |   | 8,428 |   |
| Investment securities:                                                                                                       |   |                         |      |   |   |   |   |   |
| U.S. government agency and corporations                                                                                      |   |                         | 299,325   |   |   |   | 480,319 |   |
| States and political subdivisions (non-taxable)                                                                              |   |                         | 287,250   |   |   |   | 253,327 |   |
| Other securities                                                                                                             |   |                         | 11,755    |   |   |   | 65,911 |   |
| Federal funds sold                                                                                                           |   |                         | 51        |   |   |   | 6,993 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Total interest income                                                                                                        |   |                         | 6,550,373 |   |   |   | 7,041,291 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Interest expense:                                                                                                            |   |                         |      |   |   |   |   |   |
| Deposits                                                                                                                     |   |                         | 1,041,877 |   |   |   | 1,414,061 |   |
| Securities sold under repurchase agreements                                                                                  |   |                         | 19,048    |   |   |   | 44,892 |   |
| Other short-term borrowings and other                                                                                        |   |                         | 259       |   |   |   | 631 |   |
| Long-term debt                                                                                                               |   |                         | 255,570   |   |   |   | 422,773 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Total interest expense                                                                                                       |   |                         | 1,316,754 |   |   |   | 1,882,357 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Net interest income                                                                                                          |   |                         | 5,233,619 |   |   |   | 5,158,934 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Provision for loan losses                                                                                                    |   |                         | 475,000   |   |   |   | 575,000 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Net interest income after provision for loan losses                                                                          |   |                         | 4,758,619 |   |   |   | 4,583,934 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Other income:                                                                                                                |   |                         |      |   |   |   |   |   |
| Service charges on deposit accounts                                                                                          |   |                         | 627,146   |   |   |   | 617,024 |   |
| Service charges on loans                                                                                                     |   |                         | 119,998   |   |   |   | 145,468 |   |
| Fees and other revenue                                                                                                       |   |                         | 404,102   |   |   |   | 357,991 |   |
| Gain (loss) on sale or disposal of:                                                                                          |   |                         |      |   |   |   |   |   |
| Loans                                                                                                                        |   |                         | 245,591   |   |   |   | 99,330 |   |
| Investment securities                                                                                                        |   |                         | 887       |   |   |   | - |   |
| Premises and equipment                                                                                                       |   |                         | 42        |   |   |   | (16,171 | ) |
| Foreclosed assets held-for-sale                                                                                              |   |                         | 14,864    |   |   |   | 21,010 |   |
| Impairment losses on investment securities:                                                                                  |   |                         |      |   |   |   |   |   |
| Other-than-temporary impairment on investment securities                                                                     |   |                         | (214,734  | ) |   |   | (1,436,636 | ) |
| Non-credit related losses on investment securities not expected to be sold (recognized in other comprehensive income/(loss)) |   |                         | 140,042   |   |   |   | 1,357,586 |   |
| Net impairment losses on investment securities recognized in earnings                                                        |   |                         | (74,692   | ) |   |   | (79,050 | ) |
| Total other income                                                                                                           |   |                         | 1,337,938 |   |   |   | 1,145,602 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Other expenses:                                                                                                              |   |                         |      |   |   |   |   |   |
| Salaries and employee benefits                                                                                               |   |                         | 2,224,615 |   |   |   | 2,769,090 |   |
| Premises and equipment                                                                                                       |   |                         | 976,111   |   |   |   | 894,819 |   |
| Advertising and marketing                                                                                                    |   |                         | 150,590   |   |   |   | 158,943 |   |
| Professional services                                                                                                        |   |                         | 254,767   |   |   |   | 341,067 |   |
| FDIC assessment                                                                                                              |   |                         | 229,885   |   |   |   | 195,150 |   |
| Loan collection and other real estate owned                                                                                  |   |                         | 39,805    |   |   |   | 152,391 |   |
| Office supplies                                                                                                              |   |                         | 112,423   |   |   |   | 123,354 |   |
| Other                                                                                                                        |   |                         | 501,632   |   |   |   | 469,635 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Total other expenses                                                                                                         |   |                         | 4,489,828 |   |   |   | 5,104,449 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Income before income taxes                                                                                                   |   |                         | 1,606,729 |   |   |   | 625,087 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Provision for income taxes                                                                                                   |   |                         | 379,844   |   |   |   | 69,207 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Net income                                                                                                                   |   | $                            | 1,226,885 |   |   | $ | 555,880 |   |
|                                                                                                                         |   |                         |      |   |   |   |   |   |
| Per share data:                                                                                                              |   |                         |      |   |   |   |   |   |
| Net income - basic                                                                                                           |   | $                            | 0.56      |   |   | $ | 0.26 |   |
| Net income - diluted                                                                                                         |   | $                            | 0.56      |   |   | $ | 0.26 |   |
| Dividends                                                                                                                    |   | $                            | 0.25      |   |   | $ | 0.25 |   |

----

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|                                                                                                                                                |   |               |      |   |     |   |       |          |   |   | Accumulated  |   |   |   |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|----------|--------|------------|---------------|--------|--------|-------------------|--------|--------|--------|------------|
|                                                                                                                                                |   |               |      |   |     |   |       |          |   |   | other             |   |   |   |       |
|                                                                                                                                                |   | Capital stock |      |   | Retained |   |       | comprehensive |   |   |              |   |
|                                                                                                                                                |   | Shares             |      |   | Amount   |   |       | earnings      |   |   | loss              |   |   | Total  |       |
|                                                                                                                                                |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |
| Balance, December 31, 2009                                                                                                                          |   |               | 2,105,860 |   |     | $      | 19,982,677 |          |   | $      | 34,886,265        |   |   | $      | (9,194,395 | ) |   | $ | 45,674,547 |   |
| Total comprehensive income:                                                                                                                         |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   |   |   |
| Net income                                                                                                                                          |   |               |      |   |     |   |       |          |   |   | 555,880           |   |   |   |       |   |   |   | 555,880 |   |
| Change in net unrealized holding losses on available-for-sale securities, net of reclassification adjustment and net of tax adjustments of $549,197 |   |               |      |   |     |   |       |          |   |   |              |   |   |   | 1,066,088  |   |   |   | 1,066,088 |   |
| Non-credit related impairment losses on investment securities not expected to be sold, net of tax adjustments of $377,251                           |   |               |      |   |     |   |       |          |   |   |              |   |   |   | (732,310   | ) |   |   | (732,310 | ) |
| Comprehensive income                                                                                                                                |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   | 889,658 |   |
| Issuance of common stock through Employee Stock Purchase Plan                                                                                       |   |               | 4,754     |   |     |   | 67,367     |          |   |   |              |   |   |   |       |   |   |   | 67,367 |   |
| Issuance of common stock through Dividend  Reinvestment Plan                                                                              |   |               | 17,698    |   |     |   | 254,453    |          |   |   |              |   |   |   |       |   |   |   | 254,453 |   |
| Stock-based compensation expense                                                                                                                    |   |               |      |   |     |   | 7,485      |          |   |   |              |   |   |   |       |   |   |   | 7,485 |   |
| Cash dividends declared                                                                                                                             |   |               |      |   |     |   |       |          |   |   | (527,653          | )      |   |   |       |   |   |   | (527,653 | ) |
|                                                                                                                                                |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   |   |   |
| Balance, March 31, 2010                                                                                                                             |   |               | 2,128,312 |   |     | $      | 20,311,982 |          |   | $      | 34,914,492        |   |   | $      | (8,860,617 | ) |   | $ | 46,365,857 |   |
|                                                                                                                                                |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   |   |   |
|                                                                                                                                                |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   |   |   |
| Balance, December 31, 2010                                                                                                                          |   |               | 2,178,028 |   |     | $      | 21,046,646 |          |   | $      | 29,544,522        |   |   | $      | (3,817,153 | ) |   | $ | 46,774,015 |   |
| Total comprehensive income:                                                                                                                         |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   |   |   |
| Net income                                                                                                                                          |   |               |      |   |     |   |       |          |   |   | 1,226,885         |   |   |   |       |   |   |   | 1,226,885 |   |
| Change in net unrealized holding losses on available-for-sale securities, net of reclassification adjustment and net of tax adjustments of $242,461 |   |               |      |   |     |   |       |          |   |   |              |   |   |   | 470,662    |   |   |   | 470,662 |   |
| Non-credit related impairment gains on investment securities not expected to be sold, net of tax adjustments of $1,472                              |   |               |      |   |     |   |       |          |   |   |              |   |   |   | 2,857      |   |   |   | 2,857 |   |
| Comprehensive income                                                                                                                                |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   | 1,700,404 |   |
| Issuance of common stock through Employee Stock Purchase Plan                                                                                       |   |               | 4,801     |   |     |   | 67,060     |          |   |   |              |   |   |   |       |   |   |   | 67,060 |   |
| Issuance of common stock through Dividend  Reinvestment Plan                                                                              |   |               | 16,551    |   |     |   | 283,022    |          |   |   |              |   |   |   |       |   |   |   | 283,022 |   |
| Stock-based compensation expense                                                                                                                    |   |               |      |   |     |   | 23,837     |          |   |   |              |   |   |   |       |   |   |   | 23,837 |   |
| Cash dividends declared                                                                                                                             |   |               |      |   |     |   |       |          |   |   | (545,707          | )      |   |   |       |   |   |   | (545,707 | ) |
|                                                                                                                                                |   |               |      |   |     |   |       |          |   |   |              |   |   |   |       |   |   |   |   |   |
| Balance, March 31, 2011                                                                                                                             |   |               | 2,199,380 |   |     | $      | 21,420,565 |          |   | $      | 30,225,700        |   |   | $      | (3,343,634 | ) |   | $ | 48,302,631 |   |

----

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|                                                                         |   | Three months ended March 31, |        |
|------------------------------------------------------------------------------|--------|--------------------------------------------------|-------------|
|                                                                         |   | 2011                                             |        |   | 2010 |   |
|                                                                         |   |                                             |        |   |   |   |
| Cash flows from operating activities:                                        |   |                                             |        |   |   |   |
| Net income                                                                   |   | $                                                | 1,226,885   |   |   | $ | 555,880 |   |
| Adjustments to reconcile net income to cash flows from operating activities: |   |                                             |        |   |   |   |   |   |
| Depreciation, amortization and accretion                                     |   |                                             | 815,793     |   |   |   | 448,246 |   |
| Provision for loan losses                                                    |   |                                             | 475,000     |   |   |   | 575,000 |   |
| Deferred income tax expense (benefit)                                        |   |                                             | 62,568      |   |   |   | (204,941 | ) |
| Stock-based compensation expense                                             |   |                                             | 23,837      |   |   |   | 7,485 |   |
| Proceeds from sale of loans held-for-sale                                    |   |                                             | 8,741,898   |   |   |   | 7,991,498 |   |
| Originations of loans held-for-sale                                          |   |                                             | (6,555,101  | ) |   |   | (6,684,054 | ) |
| Increase in cash surrender value of life insurance                           |   |                                             | (76,806     | ) |   |   | (75,471 | ) |
| Net gain from sales of loans                                                 |   |                                             | (245,591    | ) |   |   | (99,330 | ) |
| Net gain on sale of investment securities                                    |   |                                             | (887        | ) |   |   | - |   |
| Net gain from sales of foreclosed assets held-for-sale                       |   |                                             | (14,864     | ) |   |   | (21,010 | ) |
| (Gain)/loss from disposal of equipment                                       |   |                                             | (42         | ) |   |   | 16,171 |   |
| Other-than-temporary impairment on securities                                |   |                                             | 74,692      |   |   |   | 79,050 |   |
| Change in:                                                                   |   |                                             |        |   |   |   |   |   |
| Accrued interest receivable                                                  |   |                                             | (42,751     | ) |   |   | 33,544 |   |
| Other assets                                                                 |   |                                             | (150,828    | ) |   |   | (89,807 | ) |
| Accrued interest payable and other liabilities                               |   |                                             | (150,139    | ) |   |   | 180,558 |   |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Net cash provided by operating activities                                    |   |                                             | 4,183,664   |   |   |   | 2,712,819 |   |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Cash flows from investing activities:                                        |   |                                             |        |   |   |   |   |   |
| Held-to-maturity securities:                                                 |   |                                             |        |   |   |   |   |   |
| Proceeds from maturities, calls and principal pay-downs                      |   |                                             | 23,407      |   |   |   | 36,771 |   |
| Available-for-sale securities:                                               |   |                                             |        |   |   |   |   |   |
| Proceeds from sales                                                          |   |                                             | 803,686     |   |   |   | - |   |
| Proceeds from maturities, calls and principal pay-downs                      |   |                                             | 4,113,985   |   |   |   | 12,290,737 |   |
| Purchases                                                                    |   |                                             | (12,049,766 | ) |   |   | (16,726,036 | ) |
| Net decrease in FHLB stock                                                   |   |                                             | 227,100     |   |   |   | - |   |
| Net increase in loans                                                        |   |                                             | (6,056,662  | ) |   |   | (4,014,606 | ) |
| Acquisition of bank premises and equipment                                   |   |                                             | (53,380     | ) |   |   | (209,598 | ) |
| Proceeds from sale of foreclosed assets held-for-sale                        |   |                                             | 144,164     |   |   |   | 570,605 |   |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Net cash used in investing activities                                        |   |                                             | (12,847,466 | ) |   |   | (8,052,127 | ) |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Cash flows from financing activities:                                        |   |                                             |        |   |   |   |   |   |
| Net increase in deposits                                                     |   |                                             | 30,752,645  |   |   |   | 27,562,726 |   |
| Net increase in short-term borrowings                                        |   |                                             | 2,582,704   |   |   |   | 9,837,115 |   |
| Proceeds from employee stock purchase plan participants                      |   |                                             | 67,060      |   |   |   | 67,367 |   |
| Dividends paid, net of dividends reinvested                                  |   |                                             | (366,084    | ) |   |   | (344,777 | ) |
| Proceeds from dividend reinvestment plan participants                        |   |                                             | 103,399     |   |   |   | 71,577 |   |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Net cash provided by financing activities                                    |   |                                             | 33,139,724  |   |   |   | 37,194,008 |   |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Net increase in cash and cash equivalents                                    |   |                                             | 24,475,922  |   |   |   | 31,854,700 |   |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Cash and cash equivalents, beginning                                         |   |                                             | 22,967,345  |   |   |   | 8,327,954 |   |
|                                                                         |   |                                             |        |   |   |   |   |   |
| Cash and cash equivalents, ending                                            |   | $                                                | 47,443,267  |   |   | $ | 40,182,654 |   |

----

----

----

|                                             |   | March 31, 2011 |   |
|--------------------------------------------------|--------|--------------------------|--------|
|                                             |   | Amortized                |   |   | Gross unrealized |   |   | Gross unrealized |   |   | Fair |   |
|                                             |   | cost                     |   |   | gains |   |   | losses |   |   | value |   |
|                                             |   |                     |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities:                     |   |                     |   |   |   |   |   |   |   |   |   |   |
| MBS - GSE residential                            |   | $                        | 467    |   |   | $ | 46 |   |   | $ | - |   |   | $ | 513 |   |
|                                             |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale securities:                   |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agency - GSE                                     |   | $                        | 21,322 |   |   | $ | 105 |   |   | $ | 167 |   |   | $ | 21,260 |   |
| Obligations of states and political subdivisions |   |                     | 26,590 |   |   |   | 281 |   |   |   | 635 |   |   |   | 26,236 |   |
| Corporate bonds:                                 |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pooled trust preferred securities                |   |                     | 6,799  |   |   |   | 90 |   |   |   | 5,501 |   |   |   | 1,388 |   |
| MBS - GSE residential                            |   |                     | 40,447 |   |   |   | 691 |   |   |   | 89 |   |   |   | 41,049 |   |
|                                             |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total debt securities                            |   |                     | 95,158 |   |   |   | 1,167 |   |   |   | 6,392 |   |   |   | 89,933 |   |
|                                             |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities - financial services           |   |                     | 322    |   |   |   | 160 |   |   |   | - |   |   |   | 482 |   |
|                                             |   |                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total available-for-sale securities              |   | $                        | 95,480 |   |   | $ | 1,327 |   |   | $ | 6,392 |   |   | $ | 90,415 |   |

|                                             |   | December 31, 2010 |   |
|--------------------------------------------------|--------|-----------------------------|--------|
|                                             |   | Amortized                   |   |   | Gross unrealized |   |   | Gross unrealized |   |   | Fair |   |
|                                             |   | cost                        |   |   | gains |   |   | losses |   |   | value |   |
|                                             |   |                        |   |   |   |   |   |   |   |   |   |   |
| Held-to-maturity securities:                     |   |                        |   |   |   |   |   |   |   |   |   |   |
| MBS - GSE residential                            |   | $                           | 490    |   |   | $ | 48 |   |   | $ | - |   |   | $ | 538 |   |
|                                             |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Available-for-sale securities:                   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agency - GSE                                     |   | $                           | 16,316 |   |   | $ | 122 |   |   | $ | 150 |   |   | $ | 16,288 |   |
| Obligations of states and political subdivisions |   |                        | 24,991 |   |   |   | 135 |   |   |   | 955 |   |   |   | 24,171 |   |
| Corporate bonds:                                 |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pooled trust preferred securities                |   |                        | 6,873  |   |   |   | 90 |   |   |   | 5,510 |   |   |   | 1,453 |   |
| MBS - GSE residential                            |   |                        | 40,222 |   |   |   | 524 |   |   |   | 193 |   |   |   | 40,553 |   |
|                                             |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total debt securities                            |   |                        | 88,402 |   |   |   | 871 |   |   |   | 6,808 |   |   |   | 82,465 |   |
|                                             |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity securities - financial services           |   |                        | 322    |   |   |   | 154 |   |   |   | - |   |   |   | 476 |   |
|                                             |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total available-for-sale securities              |   | $                           | 88,724 |   |   | $ | 1,025 |   |   | $ | 6,808 |   |   | $ | 82,941 |   |

----

|                                     |   | Amortized |   |   | Market |   |
|------------------------------------------|--------|-----------|--------|--------|--------|--------|
|                                     |   | cost      |   |   | value  |   |
| Held-to-maturity securities:             |   |      |   |   |   |   |
| MBS - GSE residential                    |   | $         | 467    |   |   | $      | 513 |   |
|                                     |   |      |   |   |   |   |   |   |
| Available-for-sale securities:           |   |      |   |   |   |   |   |   |
| Debt securities:                         |   |      |   |   |   |   |   |   |
| Due in one year or less                  |   | $         | 560    |   |   | $      | 562 |   |
| Due after one year through five years    |   |      | 8,034  |   |   |   | 8,005 |   |
| Due after five years through ten years   |   |      | 6,793  |   |   |   | 6,705 |   |
| Due after ten years                      |   |      | 39,324 |   |   |   | 33,612 |   |
| Total debt securities                    |   |      | 54,711 |   |   |   | 48,884 |   |
|                                     |   |      |   |   |   |   |   |   |
| MBS - GSE residential                    |   |      | 40,447 |   |   |   | 41,049 |   |
|                                     |   |      |   |   |   |   |   |   |
| Total available-for-sale debt securities |   | $         | 95,158 |   |   | $      | 89,933 |   |

|                                             |   | March 31, 2011           |   |
|--------------------------------------------------|--------|------------------------------------|--------|
|                                             |   | Less than 12 months |   |   | More than 12 months |   |   | Total |   |
|                                             |   | Fair                               |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                             |   | value                              |   |   | losses |   |   | value |   |   | losses |   |   | value |   |   | losses |   |
| Agency - GSE                                     |   | $                                  | 9,985  |   |   | $ | 167 |   |   | $ | - |   |   | $ | - |   |   | $ | 9,985 |   |   | $ | 167 |   |
| Obligations of states and political subdivisions |   |                               | 12,688 |   |   |   | 635 |   |   |   | - |   |   |   | - |   |   |   | 12,688 |   |   |   | 635 |   |
| Corporate bonds:                                 |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pooled trust preferred securities                |   |                               | -      |   |   |   | - |   |   |   | 1,298 |   |   |   | 5,501 |   |   |   | 1,298 |   |   |   | 5,501 |   |
| MBS - GSE residential                            |   |                               | 9,240  |   |   |   | 89 |   |   |   | - |   |   |   | - |   |   |   | 9,240 |   |   |   | 89 |   |
| Total temporarily impaired securities            |   | $                                  | 31,913 |   |   | $ | 891 |   |   | $ | 1,298 |   |   | $ | 5,501 |   |   | $ | 33,211 |   |   | $ | 6,392 |   |
| Number of securities                             |   |                               | 33     |   |   |   |   |   |   |   | 8 |   |   |   |   |   |   |   | 41 |   |   |   |   |   |

|                                             |   | December 31, 2010        |   |
|--------------------------------------------------|--------|------------------------------------|--------|
|                                             |   | Less than 12 months |   |   | More than 12 months |   |   | Total |   |
|                                             |   | Fair                               |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                                             |   | value                              |   |   | losses |   |   | value |   |   | losses |   |   | value |   |   | losses |   |
| Agency - GSE                                     |   | $                                  | 6,995  |   |   | $ | 150 |   |   | $ | - |   |   | $ | - |   |   | $ | 6,995 |   |   | $ | 150 |   |
| Obligations of states and political subdivisions |   |                               | 16,549 |   |   |   | 955 |   |   |   | - |   |   |   | - |   |   |   | 16,549 |   |   |   | 955 |   |
| Corporate bonds:                                 |   |                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Pooled trust preferred securities                |   |                               | -      |   |   |   | - |   |   |   | 1,364 |   |   |   | 5,510 |   |   |   | 1,364 |   |   |   | 5,510 |   |
| MBS - GSE residential                            |   |                               | 14,672 |   |   |   | 193 |   |   |   | - |   |   |   | - |   |   |   | 14,672 |   |   |   | 193 |   |
| Total temporarily impaired securities            |   | $                                  | 38,216 |   |   | $ | 1,298 |   |   | $ | 1,364 |   |   | $ | 5,510 |   |   | $ | 39,580 |   |   | $ | 6,808 |   |
| Number of securities                             |   |                               | 40     |   |   |   |   |   |   |   | 7 |   |   |   |   |   |   |   | 47 |   |   |   |   |   |

----

----

|                               |   | Three months ended |   |
|------------------------------------|--------|------------------------------|--------|
|                               |   | March 31,               |   |
|                               |   | 2011                         |   |   | 2010 |   |
| Pooled trust preferred securities: |   |                         |   |   |   |   |
| PreTSL VII, Mezzanine              |   | $                            | -      |   |   | $ | 19 |   |
| PreTSL XI, B-3                     |   |                         | -      |   |   |   | 60 |   |
| PreTSL XXIV, B-1                   |   |                         | 75     |   |   |   | - |   |
| Total                              |   | $                            | 75     |   |   | $ | 79 |   |

|                                                                                                                         |   | Three months ended |   |
|------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                                                         |   | March 31, 2011     |   |
|                                                                                                                         |   | HTM                |   |   | AFS |   |   | Total |   |
| Balance of credit-related OTTI                                                                                               |   | $                  | -      |   |   | $ | (15,034 | ) |   | $ | (15,034 | ) |
| Additions for credit-related OTTI not previously recognized                                                                  |   |               | -      |   |   |   |   |   |   |   | - |   |
| Additional credit-related OTTI previously recognized when there is no intent to sell before recovery of amortized cost basis |   |               | -      |   |   |   | (75 | ) |   |   | (75 | ) |
| Ending balance of credit-related OTTI                                                                                        |   | $                  | -      |   |   | $ | (15,109 | ) |   | $ | (15,109 | ) |

----

|                 |   |      |   | March 31, 2011 |   |   | December 31, 2010 |   |
|----------------------|--------|-----------|--------|--------------------------|--------|--------|-----------------------------|--------|
|                 |   |      |   | Book                     |   |   | Fair                        |   |   | Book |   |   | Fair |   |
| Deal                 |   | Class     |   | value                    |   |   | value                       |   |   | value |   |   | value |   |
| PreTSL VII           |   | Mezzanine |   | $                        | -      |   |                        | $      | 70 |   |   | $ | - |   |   | $ | 68 |   |
| PreTSL  IX |   | B-1,B-3   |   |                     | 1,679  |   |                        |   | 488 |   |   |   | 1,679 |   |   |   | 527 |   |
| PreTSL  XI |   | B-3       |   |                     | 1,125  |   |                        |   | 313 |   |   |   | 1,125 |   |   |   | 407 |   |
| PreTSL  XV |   | B-1       |   |                     | -      |   |                        |   | 20 |   |   |   | - |   |   |   | 21 |   |
| PreTSL XVIII         |   | C         |   |                     | 285    |   |                        |   | 7 |   |   |   | 285 |   |   |   | 11 |   |
| PreTSL XIX           |   | C         |   |                     | 452    |   |                        |   | 19 |   |   |   | 452 |   |   |   | 22 |   |
| PreTSL XXIV          |   | B-1       |   |                     | 407    |   |                        |   | 15 |   |   |   | 482 |   |   |   | 35 |   |
|                 |   |      |   | $                        | 3,948  |   |                        | $      | 932 |   |   | $ | 4,023 |   |   | $ | 1,091 |   |

|                 |   |      |   |   |   |   |   |   |   |   |             |   |   |             |   |   | Current        |   |   |              |   |   | Actual                   |    |   |          |   |   | Excess                   |   |   | Effective                |   |
|----------------------|--------|-----------|--------|--------|--------|--------|--------|--------|--------|--------|------------------|--------|--------|------------------|--------|--------|----------------|--------|--------|-------------------|--------|--------|--------------------------|---------|--------|---------------|--------|--------|--------------------------|--------|--------|--------------------------|--------|
|                 |   |      |   |   |   |   |   |   |   |   |             |   |   |             |   |   | number         |   |   |              |   |   | deferrals                |    |   |          |   |   | subordination (2)   |   |   | subordination (3)   |   |
|                 |   |      |   |   |   |   |   |   |   |   |             |   |   |             |   |   | of             |   |   |              |   |   | and defaults        |    |   |          |   |   | as a % of |   |   | as a % of |   |
|                 |   |      |   |   |   |   |   |   |   |   |             |   |   | Moody's /   |   |   | banks /   |   |   | Actual            |   |   | as a % of |    |   |          |   |   | current                  |   |   | current                  |   |
|                 |   |      |   |   | Book   |   |   | Fair   |   |   | Unrealized       |   |   | Fitch            |   |   | insurance      |   |   | deferrals         |   |   | current                  |    |   | Excess        |   |   | performing               |   |   | performing               |   |
| Deal                 |   | Class     |   |   | value  |   |   | value  |   |   | gain (loss) |   |   | ratings (1) |   |   | companies      |   |   | and defaults |   |   | collateral               |    |   | subordination |   |   | collateral               |   |   | collateral               |   |
| PreTSL  IV |   | Mezzanine |   |   | $      | 447    |   |   | $      | 228    |             |   | $      | (219             | )      |   | Ca / CCC       |   |   | 6 / -             |   |   | $                        | 18,000  |   |          |   | 27.1   |                     |   | $      | 9,978                    |   |   |   | 19.3 |   |   |   | 33.0 |   |
| PreTSL  V  |   | Mezzanine |   |   |   | -      |   |   |   | -      |             |   |   | -                |   |   | Ba3 / D        |   |   | 3 / -             |   |   |                     | 28,950  |   |          |   | 100.0  |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL VII           |   | Mezzanine |   |   |   | -      |   |   |   | 70     |             |   |   | 70               |   |   | Ca / C         |   |   | 19 / -            |   |   |                     | 154,000 |   |          |   | 67.8   |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL  IX |   | B-1,B-3   |   |   |   | 1,679  |   |   |   | 488    |             |   |   | (1,191           | )      |   | Ca / C         |   |   | 48 / -            |   |   |                     | 136,510 |   |          |   | 31.0   |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL XI            |   | B-3       |   |   |   | 1,125  |   |   |   | 313    |             |   |   | (812             | )      |   | Ca / C         |   |   | 65 / -            |   |   |                     | 180,780 |   |          |   | 30.7   |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL  XV |   | B-1       |   |   |   | -      |   |   |   | 20     |             |   |   | 20               |   |   | C / C          |   |   | 63 / 9            |   |   |                     | 211,700 |   |          |   | 35.4   |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL XVI           |   | C         |   |   |   | -      |   |   |   | -      |             |   |   | -                |   |   | Ca / C         |   |   | 49 / 7            |   |   |                     | 270,190 |   |          |   | 46.9   |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL XVII          |   | C         |   |   |   | -      |   |   |   | -      |             |   |   | -                |   |   | Ca / C         |   |   | 51 / 6            |   |   |                     | 172,270 |   |          |   | 36.3   |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL XVIII         |   | C         |   |   |   | 285    |   |   |   | 7      |             |   |   | (278             | )      |   | Ca / C         |   |   | 66 / 14           |   |   |                     | 168,340 |   |          |   | 24.9   |                     |   | None   |                     |   |   | N/A |   |   |   | 1.3 |   |
| PreTSL XIX           |   | C         |   |   |   | 452    |   |   |   | 19     |             |   |   | (433             | )      |   | C / C          |   |   | 60 / 14           |   |   |                     | 170,400 |   |          |   | 24.3   |                     |   | None   |                     |   |   | N/A |   |   |   | 3.2 |   |
| PreTSL XXIV          |   | B-1       |   |   |   | 407    |   |   |   | 15     |             |   |   | (392             | )      |   | Caa3 / CC |   |   | 80 / 13           |   |   |                     | 401,800 |   |          |   | 38.2   |                     |   | None   |                     |   |   | N/A |   |   |   | 4.7 |   |
| PreTSL XXV           |   | C-1       |   |   |   | -      |   |   |   | -      |             |   |   | -                |   |   | C / C          |   |   | 64 / 9            |   |   |                     | 326,600 |   |          |   | 37.2   |                     |   | None   |                     |   |   | N/A |   |   |   | N/A |   |
| PreTSL XXVII         |   | B         |   |   |   | 2,404  |   |   |   | 228    |             |   |   | (2,176           | )      |   | Ca / CC        |   |   | 42 / 7            |   |   |                     | 88,300  |   |          |   | 27.1   |                     |   | None   |                     |   |   | N/A |   |   |   | 20.7 |   |
|                 |   |      |   |   | $      | 6,799  |   |   | $      | 1,388  |             |   | $      | (5,411           | )      |   |           |   |   |              |   |   |                     |    |   |          |   |   |                     |   |   |                     |   |   |   |   |   |   |   |   |   |   |

----

----

|                       |   | March 31, 2011 |    |   | December 31, 2010 |   |
|----------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|
|                       |   | Amount                   |    |   | Amount                      |   |
|                       |   |                     |    |   |                        |   |
| Commercial and industrial  |   | $                        | 90,709  |   |                        | $      | 85,129 |   |
| Commercial real estate:    |   |                     |    |   |                        |   |   |   |
| Non-owner occupied         |   |                     | 85,270  |   |                        |   | 87,355 |   |
| Owner occupied             |   |                     | 69,472  |   |                        |   | 69,338 |   |
| Construction               |   |                     | 13,554  |   |                        |   | 12,501 |   |
| Consumer:                  |   |                     |    |   |                        |   |   |   |
| Home equity installment    |   |                     | 38,578  |   |                        |   | 40,089 |   |
| Home equity line of credit |   |                     | 30,063  |   |                        |   | 29,185 |   |
| Auto                       |   |                     | 11,089  |   |                        |   | 10,734 |   |
| Other                      |   |                     | 6,413   |   |                        |   | 7,165 |   |
| Residential:               |   |                     |    |   |                        |   |   |   |
| Real estate                |   |                     | 70,252  |   |                        |   | 68,160 |   |
| Construction               |   |                     | 4,097   |   |                        |   | 6,145 |   |
|                       |   |                     |    |   |                        |   |   |   |
| Total                      |   |                     | 419,497 |   |                        |   | 415,801 |   |
|                       |   |                     |    |   |                        |   |   |   |
| Allowance for loan losses  |   |                     | 8,224   |   |                        |   | 7,898 |   |
|                       |   |                     |    |   |                        |   |   |   |
| Loans, net                 |   | $                        | 411,273 |   |                        | $      | 407,903 |   |

----

|                       |   | March 31, 2011 |      |   | December 31, 2010 |   |
|----------------------------|--------|--------------------------|-----------|--------|-----------------------------|--------|
|                       |   |                     |      |   |                        |   |
| Commercial and industrial  |   | $                        | 164,583   |   |                        | $      | 164,583 |   |
|                       |   |                     |      |   |                        |   |   |   |
| Commercial real estate:    |   |                     |      |   |                        |   |   |   |
|                       |   |                     |      |   |                        |   |   |   |
| Non-owner occupied         |   |                     | 1,970,333 |   |                        |   | 2,000,333 |   |
| Owner occupied             |   |                     | 2,764,497 |   |                        |   | 2,768,036 |   |
|                       |   |                     |      |   |                        |   |   |   |
| Consumer:                  |   |                     |      |   |                        |   |   |   |
|                       |   |                     |      |   |                        |   |   |   |
| Home equity installment    |   |                     | 705,319   |   |                        |   | 600,745 |   |
| Home equity line of credit |   |                     | 489,658   |   |                        |   | 507,660 |   |
| Auto                       |   |                     | -         |   |                        |   | 14,000 |   |
| Other                      |   |                     | -         |   |                        |   | 13,467 |   |
|                       |   |                     |      |   |                        |   |   |   |
| Residential:               |   |                     |      |   |                        |   |   |   |
|                       |   |                     |      |   |                        |   |   |   |
| Real estate                |   |                     | 3,274,439 |   |                        |   | 3,805,462 |   |
| Construction               |   |                     | 94,389    |   |                        |   | 94,389 |   |
|                       |   |                     |      |   |                        |   |   |   |
| Total                      |   | $                        | 9,463,218 |   |                        | $      | 9,968,675 |   |

|                       |   |                        |      |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        | Recorded                           |   |
|----------------------------|--------|-----------------------------|-----------|--------|-----------------------------|--------|-----------|---------------------|--------|--------|---------------|--------|--------|---------|------------|--------|------------|--------|-------------|------------------------------------|--------|
|                       |   |                        |      |   |                        |   |      | Past due       |   |   |          |   |   |    |       |   | Total      |   |        | investment past               |   |
|                       |   | 30 - 59 Days |      |   | 60 - 89 Days |   |      | 90 days        |   |   | Total         |   |   |    |       |   | loans      |   |        | due ≥ 90 days |   |
| March 31, 2011   |   | past due               |      |   | past due               |   |      | or more * |   |   | past due |   |   | Current |       |   | receivable |   |        | and accruing                  |   |
|                       |   |                        |      |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |
| Commercial and industrial  |   | $                           | 336,161   |   |                        | $      | 313,674   |                |   | $      | 374,583       |   |   | $       | 1,024,418  |   |       | $      | 89,684,422  |                               |   | $ | 90,708,840 |   |   | $ | 210,000 |   |
| Commercial real estate:    |   |                        |      |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Non-owner occupied         |   |                        | 1,755,157 |   |                        |   | 629,716   |                |   |   | 2,198,593     |   |   |    | 4,583,466  |   |       |   | 80,686,550  |                               |   |   | 85,270,016 |   |   |   | 228,260 |   |
| Owner occupied             |   |                        | 5,661     |   |                        |   | -         |                |   |   | 2,764,497     |   |   |    | 2,770,158  |   |       |   | 66,701,712  |                               |   |   | 69,471,870 |   |   |   | - |   |
| Construction               |   |                        | -         |   |                        |   | -         |                |   |   | -             |   |   |    | -          |   |       |   | 13,553,901  |                               |   |   | 13,553,901 |   |   |   | - |   |
| Consumer:                  |   |                        |      |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Home equity installment    |   |                        | 252,144   |   |                        |   | -         |                |   |   | 814,795       |   |   |    | 1,066,939  |   |       |   | 37,510,065  |                               |   |   | 38,577,004 |   |   |   | 109,475 |   |
| Home equity line of credit |   |                        | -         |   |                        |   | -         |                |   |   | 489,657       |   |   |    | 489,657    |   |       |   | 29,573,439  |                               |   |   | 30,063,096 |   |   |   | - |   |
| Auto                       |   |                        | 79,333    |   |                        |   | 37,690    |                |   |   | -             |   |   |    | 117,023    |   |       |   | 10,971,994  |                               |   |   | 11,089,017 |   |   |   | - |   |
| Other                      |   |                        | 102,452   |   |                        |   | 28,585    |                |   |   | -             |   |   |    | 131,037    |   |       |   | 6,283,531   |                               |   |   | 6,414,568 |   |   |   | - |   |
| Residential:               |   |                        |      |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Real estate                |   |                        | 412,417   |   |                        |   | -         |                |   |   | 3,274,439     |   |   |    | 3,686,856  |   |       |   | 66,565,223  |                               |   |   | 70,252,079 |   |   |   | - |   |
| Construction               |   |                        | -         |   |                        |   | -         |                |   |   | 94,389        |   |   |    | 94,389     |   |       |   | 4,002,520   |                               |   |   | 4,096,909 |   |   |   | - |   |
|                       |   |                        |      |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Total                      |   | $                           | 2,943,325 |   |                        | $      | 1,009,665 |                |   | $      | 10,010,953    |   |   | $       | 13,963,943 |   |       | $      | 405,533,357 |                               |   | $ | 419,497,300 |   |   | $ | 547,735 |   |

----

|                        |   |                        |    |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        | Recorded                           |   |
|-----------------------------|--------|-----------------------------|---------|--------|-----------------------------|--------|-----------|---------------------|--------|--------|---------------|--------|--------|---------|------------|--------|------------|--------|-------------|------------------------------------|--------|
|                        |   |                        |    |   |                        |   |      | Past due       |   |   |          |   |   |    |       |   | Total      |   |        | investment past               |   |
|                        |   | 30 - 59 Days |    |   | 60 - 89 Days |   |      | 90 days        |   |   | Total         |   |   |    |       |   | loans      |   |        | due ≥ 90 days |   |
| December 31, 2010 |   | past due               |    |   | past due               |   |      | or more * |   |   | past due |   |   | Current |       |   | receivable |   |        | and accruing                  |   |
|                        |   |                        |    |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |
| Commercial and industrial   |   | $                           | 15,407  |   |                        | $      | 270,624   |                |   | $      | 262,306       |   |   | $       | 548,337    |   |       | $      | 84,580,937  |                               |   | $ | 85,129,274 |   |   | $ | 97,723 |   |
| Commercial real estate:     |   |                        |    |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Non-owner occupied          |   |                        | 56,093  |   |                        |   | 17,275    |                |   |   | 2,000,333     |   |   |    | 2,073,701  |   |       |   | 85,281,624  |                               |   |   | 87,355,325 |   |   |   | - |   |
| Owner occupied              |   |                        | 402,868 |   |                        |   | 20,539    |                |   |   | 2,783,586     |   |   |    | 3,206,993  |   |       |   | 66,130,947  |                               |   |   | 69,337,940 |   |   |   | 15,549 |   |
| Construction                |   |                        | -       |   |                        |   | -         |                |   |   | -             |   |   |    | -          |   |       |   | 12,500,834  |                               |   |   | 12,500,834 |   |   |   | - |   |
| Consumer:                   |   |                        |    |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Home equity installment     |   |                        | 205,889 |   |                        |   | 103,775   |                |   |   | 711,915       |   |   |    | 1,021,579  |   |       |   | 39,067,422  |                               |   |   | 40,089,001 |   |   |   | 111,171 |   |
| Home equity line of credit  |   |                        | 6,552   |   |                        |   | 44,634    |                |   |   | 507,660       |   |   |    | 558,846    |   |       |   | 28,626,253  |                               |   |   | 29,185,099 |   |   |   | - |   |
| Auto                        |   |                        | 235,193 |   |                        |   | 92,131    |                |   |   | 15,617        |   |   |    | 342,941    |   |       |   | 10,391,426  |                               |   |   | 10,734,367 |   |   |   | 1,617 |   |
| Other                       |   |                        | 21,034  |   |                        |   | 11,578    |                |   |   | 13,467        |   |   |    | 46,079     |   |       |   | 7,119,249   |                               |   |   | 7,165,328 |   |   |   | - |   |
| Residential:                |   |                        |    |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Real estate                 |   |                        | -       |   |                        |   | 1,107,570 |                |   |   | 3,868,020     |   |   |    | 4,975,590  |   |       |   | 63,183,924  |                               |   |   | 68,159,514 |   |   |   | 62,558 |   |
| Construction                |   |                        | -       |   |                        |   | -         |                |   |   | 94,389        |   |   |    | 94,389     |   |       |   | 6,050,080   |                               |   |   | 6,144,469 |   |   |   | - |   |
|                        |   |                        |    |   |                        |   |      |                |   |   |          |   |   |    |       |   |       |   |        |                               |   |   |   |   |   |   |   |   |
| Total                       |   | $                           | 943,036 |   |                        | $      | 1,668,126 |                |   | $      | 10,257,293    |   |   | $       | 12,868,455 |   |       | $      | 402,932,696 |                               |   | $ | 415,801,151 |   |   | $ | 288,618 |   |

|                        |   |      |       |   | Recorded   |   |      | Recorded   |   |   |       |   |   |      |       |
|-----------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|--------|-----------|------------|
|                        |   | Unpaid    |       |   | investment |   |      | investment |   |   | Total      |   |   |      |       |
|                        |   | principal |       |   | with       |   |      | with no    |   |   | recorded   |   |   | Related   |       |
|                        |   | balance   |       |   | allowance  |   |      | allowance  |   |   | investment |   |   | allowance |       |
| March 31, 2011              |   |      |       |   |       |   |      |       |   |   |       |   |   |      |       |
|                        |   |      |       |   |       |   |      |       |   |   |       |   |   |      |       |
| Commercial & industrial |   | $         | 811,545    |   |       | $      | 115,130   |       |   | $      | 49,453     |   |   | $         | 164,583    |   |   | $ | 22,320 |   |
| Commercial real estate:     |   |      |       |   |       |   |      |       |   |   |       |   |   |      |       |   |   |   |   |   |
| Non-owner occupied          |   |      | 2,654,140  |   |       |   | 299,700   |       |   |   | 1,670,633  |   |   |      | 1,970,333  |   |   |   | 121,181 |   |
| Owner occupied              |   |      | 4,548,746  |   |       |   | 4,187,752 |       |   |   | 361,004    |   |   |      | 4,548,756  |   |   |   | 558,020 |   |
| Consumer:                   |   |      |       |   |       |   |      |       |   |   |       |   |   |      |       |   |   |   |   |   |
| Home equity installment     |   |      | 738,649    |   |       |   | 437,160   |       |   |   | 268,159    |   |   |      | 705,319    |   |   |   | 74,506 |   |
| Home equity line of credit  |   |      | 489,659    |   |       |   | 148,357   |       |   |   | 341,301    |   |   |      | 489,658    |   |   |   | 69,429 |   |
| Residential:                |   |      |       |   |       |   |      |       |   |   |       |   |   |      |       |   |   |   |   |   |
| Real Estate                 |   |      | 3,295,590  |   |       |   | 1,984,403 |       |   |   | 1,290,036  |   |   |      | 3,274,439  |   |   |   | 350,282 |   |
| Construction                |   |      | 94,389     |   |       |   | 94,389    |       |   |   | -          |   |   |      | 94,389     |   |   |   | 15,615 |   |
|                        |   |      |       |   |       |   |      |       |   |   |       |   |   |      |       |   |   |   |   |   |
| Total                       |   | $         | 12,632,718 |   |       | $      | 7,266,891 |       |   | $      | 3,980,586  |   |   | $         | 11,247,477 |   |   | $ | 1,211,353 |   |

----

|                        |   |      |       |   | Recorded   |   |      | Recorded   |   |   |       |   |   |      |      |
|-----------------------------|--------|-----------|------------|--------|------------|--------|-----------|------------|--------|--------|------------|--------|--------|-----------|-----------|
|                        |   | Unpaid    |       |   | investment |   |      | investment |   |   | Total      |   |   |      |      |
|                        |   | principal |       |   | with       |   |      | with no    |   |   | recorded   |   |   | Related   |      |
|                        |   | balance   |       |   | allowance  |   |      | allowance  |   |   | investment |   |   | allowance |      |
| December 31, 2010           |   |      |       |   |       |   |      |       |   |   |       |   |   |      |      |
|                        |   |      |       |   |       |   |      |       |   |   |       |   |   |      |      |
| Commercial & industrial |   | $         | 811,545    |   |       | $      | -         |       |   | $      | 164,583    |   |   | $         | 164,583   |   |   | $ | - |   |
| Commercial real estate:     |   |      |       |   |       |   |      |       |   |   |       |   |   |      |      |   |   |   |   |   |
| Non-owner occupied          |   |      | 2,698,937  |   |       |   | 24,325    |       |   |   | 1,976,008  |   |   |      | 2,000,333 |   |   |   | 5,670 |   |
| Owner occupied              |   |      | 2,768,036  |   |       |   | 2,444,999 |       |   |   | 323,037    |   |   |      | 2,768,036 |   |   |   | 522,835 |   |
| Consumer:                   |   |      |       |   |       |   |      |       |   |   |       |   |   |      |      |   |   |   |   |   |
| Home equity installment     |   |      | 718,656    |   |       |   | 286,188   |       |   |   | 314,557    |   |   |      | 600,745   |   |   |   | 29,495 |   |
| Home equity line of credit  |   |      | 507,660    |   |       |   | 167,891   |       |   |   | 339,769    |   |   |      | 507,660   |   |   |   | 86,963 |   |
| Auto                        |   |      | 14,000     |   |       |   | -         |       |   |   | 14,000     |   |   |      | 14,000    |   |   |   | - |   |
| Other                       |   |      | 13,467     |   |       |   | -         |       |   |   | 13,467     |   |   |      | 13,467    |   |   |   | - |   |
| Residential:                |   |      |       |   |       |   |      |       |   |   |       |   |   |      |      |   |   |   |   |   |
| Real Estate                 |   |      | 3,805,462  |   |       |   | 2,442,732 |       |   |   | 1,362,730  |   |   |      | 3,805,462 |   |   |   | 351,643 |   |
| Construction                |   |      | 94,389     |   |       |   | 94,389    |       |   |   | -          |   |   |      | 94,389    |   |   |   | 11,121 |   |
|                        |   |      |       |   |       |   |      |       |   |   |       |   |   |      |      |   |   |   |   |   |
| Total                       |   | $         | 11,432,152 |   |       | $      | 5,460,524 |       |   | $      | 4,508,151  |   |   | $         | 9,968,675 |   |   | $ | 1,007,727 |   |

|                        |   | Three months ended March 31, 2011 |       |
|-----------------------------|--------|------------------------------------------------------------|------------|
|                        |   |                                                       |       |   |   |   |   | Cash basis |   |
|                        |   | Average                                                    |       |   | Interest |   |   | interest |   |
|                        |   | recorded                                                   |       |   | income |   |   | income |   |
|                        |   | investment                                                 |       |   | recognized |   |   | recognized |   |
|                        |   |                                                       |       |   |   |   |   |   |   |
| Commercial & industrial |   | $                                                          | 164,583    |   |   | $ | - |   |   | $ | - |   |
| Commercial real estate:     |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Non-owner occupied          |   |                                                       | 1,985,333  |   |   |   | - |   |   |   | - |   |
| Owner occupied              |   |                                                       | 3,822,979  |   |   |   | 26,039 |   |   |   | 13,987 |   |
| Consumer:                   |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Home equity installment     |   |                                                       | 653,032    |   |   |   | 5,727 |   |   |   | 2,917 |   |
| Home equity line of credit  |   |                                                       | 498,659    |   |   |   | 1,729 |   |   |   | 731 |   |
| Auto                        |   |                                                       | 7,000      |   |   |   | - |   |   |   | - |   |
| Other                       |   |                                                       | 6,734      |   |   |   | 33 |   |   |   | 33 |   |
| Residential:                |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Real Estate                 |   |                                                       | 3,539,951  |   |   |   | 84,669 |   |   |   | 14,604 |   |
| Construction                |   |                                                       | 94,389     |   |   |   | - |   |   |   | - |   |
|                        |   |                                                       |       |   |   |   |   |   |   |   |   |   |
| Total                       |   | $                                                          | 10,772,660 |   |   | $ | 118,197 |   |   | $ | 32,272 |   |

----

----

|            |   |                                |       |   |                    |   |       | Commercial real estate - |   |   | Commercial real estate - |   |   | Commercial real estate - |       |
|-----------------|--------|-------------------------------------|------------|--------|-------------------------|--------|------------|-----------------------------------------|--------|--------|-----------------------------------------|--------|--------|-----------------------------------------|------------|
|            |   | Commercial and industrial |       |   | non-owner occupied |   |       | owner occupied                     |   |   | construction                            |   |
|            |   | 3/31/2011                           |       |   | 12/31/2010              |   |       | 3/31/2011                               |   |   | 12/31/2010                              |   |   | 3/31/2011                               |       |   | 12/31/2010 |   |   | 3/31/2011 |   |   | 12/31/2010 |   |
|            |   |                                |       |   |                    |   |       |                                    |   |   |                                    |   |   |                                    |       |   |   |   |   |   |   |   |   |   |
| Pass            |   | $                                   | 87,115,137 |   |                    | $      | 82,041,657 |                                    |   | $      | 77,296,912                              |   |   | $                                       | 81,139,543 |   |   | $ | 62,543,320 |   |   | $ | 61,219,553 |   |   | $ | 10,287,260 |   |   | $ | 9,438,537 |   |
|            |   |                                |       |   |                    |   |       |                                    |   |   |                                    |   |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Special Mention |   |                                | 1,981,814  |   |                    |   | 2,212,483  |                                    |   |   | 1,917,503                               |   |   |                                    | 1,973,618  |   |   |   | - |   |   |   | 514,313 |   |   |   | 1,911,628 |   |   |   | 1,849,077 |   |
|            |   |                                |       |   |                    |   |       |                                    |   |   |                                    |   |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Substandard     |   |                                | 1,611,889  |   |                    |   | 875,134    |                                    |   |   | 6,055,601                               |   |   |                                    | 4,242,164  |   |   |   | 6,928,551 |   |   |   | 7,604,074 |   |   |   | 1,355,012 |   |   |   | 1,213,220 |   |
|            |   |                                |       |   |                    |   |       |                                    |   |   |                                    |   |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Doubtful        |   |                                | -          |   |                    |   | -          |                                    |   |   | -                                       |   |   |                                    | -          |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|            |   |                                |       |   |                    |   |       |                                    |   |   |                                    |   |   |                                    |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total           |   | $                                   | 90,708,840 |   |                    | $      | 85,129,274 |                                    |   | $      | 85,270,016                              |   |   | $                                       | 87,355,325 |   |   | $ | 69,471,871 |   |   | $ | 69,337,940 |   |   | $ | 13,553,900 |   |   | $ | 12,500,834 |   |

|           |   | Home equity installment |       |   | Home equity line of credit |   |       | Auto      |   |   | Other      |   |
|----------------|--------|-----------------------------------|------------|--------|------------------------------------------------|--------|------------|-----------|--------|--------|------------|--------|
|           |   | 3/31/2011                         |       |   | 12/31/2010                                     |   |       | 3/31/2011 |   |   | 12/31/2010 |   |   | 3/31/2011 |   |   | 12/31/2010 |   |   | 3/31/2011 |   |   | 12/31/2010 |   |
|           |   |                              |       |   |                                           |   |       |      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Performing     |   | $                                 | 37,763,504 |   |                                           | $      | 39,377,086 |      |   | $      | 29,573,438 |   |   | $ | 28,677,439 |   |   | $ | 11,089,017 |   |   | $ | 10,718,750 |   |   | $ | 6,413,274 |   |   | $ | 7,151,861 |   |
|           |   |                              |       |   |                                           |   |       |      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing |   |                              | 814,794    |   |                                           |   | 711,915    |      |   |   | 489,657    |   |   |   | 507,660 |   |   |   | - |   |   |   | 15,617 |   |   |   | - |   |   |   | 13,467 |   |
|           |   |                              |       |   |                                           |   |       |      |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total          |   | $                                 | 38,578,298 |   |                                           | $      | 40,089,001 |      |   | $      | 30,063,095 |   |   | $ | 29,185,099 |   |   | $ | 11,089,017 |   |   | $ | 10,734,367 |   |   | $ | 6,413,274 |   |   | $ | 7,165,328 |   |

|      |   | Residential real estate |       |   | Residential construction |   |
|----------------|--------|-----------------------------------|------------|--------|-------------------------------|--------|
|           |   | 3/31/2011                         |       |   | 12/31/2010                    |   |   | 3/31/2011 |   |   | 12/31/2010 |   |
|           |   |                              |       |   |                          |   |   |   |   |   |   |   |
| Performing     |   | $                                 | 66,977,810 |   |                          | $      | 64,291,494 |   |   | $ | 4,002,520 |   |   | $ | 6,050,080 |   |
|           |   |                              |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing |   |                              | 3,274,269  |   |                          |   | 3,868,020 |   |   |   | 94,389 |   |   |   | 94,389 |   |
|           |   |                              |       |   |                          |   |   |   |   |   |   |   |   |   |   |   |
| Total Total    |   | $                                 | 70,252,079 |   |                          | $      | 68,159,514 |   |   | $ | 4,096,909 |   |   | $ | 6,144,469 |   |

|   | § | identification of specific impaired loans by loan category; |
|--------|--------|-------------------------------------------------------------|

|   | § | specific loans that are not impaired, but have an identified potential for loss; |
|--------|--------|----------------------------------------------------------------------------------|

|   | § | calculation of specific allowances where required for the impaired loans based on collateral and other objective and quantifiable evidence; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | determination of homogenous pools by loan category and eliminating the impaired loans; |
|--------|--------|----------------------------------------------------------------------------------------|

|   | § | application of historical loss percentages (two-year average) to pools to determine the allowance allocation; |
|--------|--------|---------------------------------------------------------------------------------------------------------------|

|   | § | application of qualitative factor adjustment percentages to historical losses for trends or changes in the loan portfolio.  Qualitative factor adjustments include: |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                  |   | Commercial & |       |   | Commercial  |   |        |     |   |   | Residential |   |   |        |       |   |   |   |
|-------------------------------------------------------|--------|------------------|------------|--------|-------------|--------|-------------|----------|--------|--------|-------------|--------|--------|-------------|------------|--------|--------|--------|
| March 31, 2011                                        |   | industrial       |       |   | real estate |   |        | Consumer |   |   | real estate |   |   | Unallocated |       |   | Total  |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |
| Allowance for loan losses:                            |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |
| Beginning balance                                     |   | $                | 1,367,531  |   |        | $      | 4,238,272   |     |   | $      | 1,249,306   |   |   | $           | 862,654    |   |   | $      | 180,059 |   |   | $ | 7,897,822 |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Charge-offs                                           |   |             | -          |   |        |   | -           |     |   |   | 67,429      |   |   |        | 98,835     |   |   |   | - |   |   |   | 166,264 |   |
| Recoveries                                            |   |             | 3,850      |   |        |   | 246         |     |   |   | 5,845       |   |   |        | 7,479      |   |   |   | - |   |   |   | 17,420 |   |
| Provision                                             |   |             | 76,900     |   |        |   | 226,654     |     |   |   | 60,710      |   |   |        | 40,474     |   |   |   | 70,262 |   |   |   | 475,000 |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                | 1,448,281  |   |        | $      | 4,465,172   |     |   | $      | 1,248,432   |   |   | $           | 811,772    |   |   | $      | 250,321 |   |   | $ | 8,223,978 |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                | 22,320     |   |        | $      | 679,201     |     |   | $      | 143,935     |   |   | $           | 365,897    |   |   |   |   |   |   | $ | 1,211,353 |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                | 1,425,961  |   |        | $      | 3,785,971   |     |   | $      | 1,104,497   |   |   | $           | 445,875    |   |   |   |   |   |   | $ | 6,762,304 |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Loans receivable:                                     |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                | 90,708,840 |   |        | $      | 168,295,787 |     |   | $      | 86,143,685  |   |   | $           | 74,348,988 |   |   |   |   |   |   | $ | 419,497,300 |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                | 164,583    |   |        | $      | 6,519,089   |     |   | $      | 1,194,977   |   |   | $           | 3,368,828  |   |   |   |   |   |   | $ | 11,247,477 |   |
|                                                  |   |             |       |   |        |   |        |     |   |   |        |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                | 90,544,257 |   |        | $      | 161,776,698 |     |   | $      | 84,948,708  |   |   | $           | 70,980,160 |   |   |   |   |   |   | $ | 408,249,823 |   |

----

|                                                  |   | Commercial & |       |   | Commercial       |   |        |     |   |   | Residential      |   |   |        |       |   |   |   |
|-------------------------------------------------------|--------|-----------------------|------------|--------|------------------|--------|-------------|----------|--------|--------|------------------|--------|--------|-------------|------------|--------|--------|--------|
| December 31, 2010                           |   | industrial            |       |   | real estate |   |        | Consumer |   |   | real estate |   |   | Unallocated |       |   | Total  |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |
| Allowance for loan losses:                            |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |
| Beginning balance                                     |   | $                     | 1,406,102  |   |             | $      | 4,313,897   |     |   | $      | 1,252,826        |   |   | $           | 505,259    |   |   | $      | 95,519 |   |   | $ | 7,573,603 |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Charge-offs                                           |   |                  | 451,979    |   |             |   | 892,426     |     |   |   | 462,815          |   |   |        | 1,813      |   |   |   | - |   |   |   | 1,809,033 |   |
| Recoveries                                            |   |                  | 3,839      |   |             |   | 2,799       |     |   |   | 39,904           |   |   |        | 1,710      |   |   |   | - |   |   |   | 48,252 |   |
| Provision                                             |   |                  | 409,569    |   |             |   | 814,002     |     |   |   | 419,391          |   |   |        | 357,498    |   |   |   | 84,540 |   |   |   | 2,085,000 |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                     | 1,367,531  |   |             | $      | 4,238,272   |     |   | $      | 1,249,306        |   |   | $           | 862,654    |   |   | $      | 180,059 |   |   | $ | 7,897,822 |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                     | -          |   |             | $      | 528,505     |     |   | $      | 116,458          |   |   | $           | 362,764    |   |   |   |   |   |   | $ | 1,007,727 |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                     | 1,367,531  |   |             | $      | 3,709,767   |     |   | $      | 1,132,848        |   |   | $           | 499,890    |   |   |   |   |   |   | $ | 6,710,036 |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Loans receivable:                                     |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance                                        |   | $                     | 85,129,274 |   |             | $      | 169,194,099 |     |   | $      | 87,173,795       |   |   | $           | 74,303,983 |   |   |   |   |   |   | $ | 415,801,151 |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: individually evaluated for impairment |   | $                     | 164,583    |   |             | $      | 4,768,369   |     |   | $      | 1,135,872        |   |   | $           | 3,899,851  |   |   |   |   |   |   | $ | 9,968,675 |   |
|                                                  |   |                  |       |   |             |   |        |     |   |   |             |   |   |        |       |   |   |   |   |   |   |   |   |   |
| Ending balance: collectively evaluated for impairment |   | $                     | 84,964,691 |   |             | $      | 164,425,730 |     |   | $      | 86,037,923       |   |   | $           | 70,404,132 |   |   |   |   |   |   | $ | 405,832,476 |   |

|                                                         |   | Three months ended March 31, |      |
|--------------------------------------------------------------|--------|------------------------------|-----------|
|                                                         |   | 2011                         |      |   | 2010 |   |
| Basic EPS:                                                   |   |                         |      |   |   |   |
| Net income available to common shareholders                  |   | $                            | 1,226,885 |   |   | $ | 555,880 |   |
| Weighted-average common shares outstanding                   |   |                         | 2,185,488 |   |   |   | 2,113,672 |   |
| Basic EPS                                                    |   | $                            | 0.56      |   |   | $ | 0.26 |   |
|                                                         |   |                         |      |   |   |   |   |   |
| Diluted EPS:                                                 |   |                         |      |   |   |   |   |   |
| Net income available to common shareholders                  |   | $                            | 1,226,885 |   |   | $ | 555,880 |   |
| Weighted-average common shares outstanding                   |   |                         | 2,185,488 |   |   |   | 2,113,672 |   |
| Potentially dilutive common shares                           |   |                         | -         |   |   |   | - |   |
| Weighted-average common shares and dilutive potential shares |   |                         | 2,185,488 |   |   |   | 2,113,672 |   |
| Diluted EPS                                                  |   | $                            | 0.56      |   |   | $ | 0.26 |   |

----

|                          |   | March 31, 2011 |    |   | December 31, 2010 |   |
|-------------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|
|                          |   | Carrying                 |    |   | Estimated                   |   |   | Carrying |   |   | Estimated |   |
|                          |   | amount                   |    |   | fair value             |   |   | amount |   |   | fair value |   |
|                          |   |                     |    |   |                        |   |   |   |   |   |   |   |
| Financial assets:             |   |                     |    |   |                        |   |   |   |   |   |   |   |
| Cash and cash equivalents     |   | $                        | 47,443  |   |                        | $      | 47,443 |   |   | $ | 22,967 |   |   | $ | 22,967 |   |
| Held-to-maturity securities   |   |                     | 467     |   |                        |   | 513 |   |   |   | 490 |   |   |   | 538 |   |
| Available-for-sale securities |   |                     | 90,415  |   |                        |   | 90,415 |   |   |   | 82,941 |   |   |   | 82,941 |   |
| FHLB stock                    |   |                     | 4,315   |   |                        |   | 4,315 |   |   |   | 4,542 |   |   |   | 4,542 |   |
| Loans                         |   |                     | 411,273 |   |                        |   | 407,325 |   |   |   | 407,903 |   |   |   | 402,174 |   |
| Loans held-for-sale           |   |                     | 310     |   |                        |   | 315 |   |   |   | 213 |   |   |   | 217 |   |
| Accrued interest              |   |                     | 2,271   |   |                        |   | 2,271 |   |   |   | 2,228 |   |   |   | 2,228 |   |
|                          |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:        |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Deposit liabilities           |   |                     | 513,200 |   |                        |   | 506,703 |   |   |   | 482,448 |   |   |   | 478,721 |   |
| Short-term borrowings         |   |                     | 11,131  |   |                        |   | 11,131 |   |   |   | 8,548 |   |   |   | 8,548 |   |
| Long-term debt                |   |                     | 21,000  |   |                        |   | 23,628 |   |   |   | 21,000 |   |   |   | 23,956 |   |
| Accrued interest              |   |                     | 417     |   |                        |   | 417 |   |   |   | 440 |   |   |   | 440 |   |

----

|   | · | Cash and cash equivalents |
|--------|--------|---------------------------|

|   | · | Non-interest bearing deposit accounts |
|--------|--------|---------------------------------------|

|   | · | Savings, NOW and money market accounts |
|--------|--------|----------------------------------------|

|   | · | Short-term borrowings |
|--------|--------|-----------------------|

|   | · | Accrued interest |
|--------|--------|------------------|

|                                             |   |                |   |   | Fair value measurements at March 31, 2011: |   |
|--------------------------------------------------|--------|---------------------|--------|--------|--------------------------------------------------------------------------|--------|
|                                             |   | Total carrying |   |   | Quoted prices                                                       |   |   | Significant other |   |   | Significant |   |
|                                             |   | value at       |   |   | in active markets                                              |   |   | observable inputs |   |   | unobservable inputs |   |
| Assets:                                          |   | March 31, 2011      |   |   | (Level 1)                                                                |   |   | (Level 2) |   |   | (Level 3) |   |
| Available-for-sale securities:                   |   |                |   |   |                                                                     |   |   |   |   |   |   |   |
| Agency - GSE                                     |   | $                   | 21,260 |   |                                                                     | $      | - |   |   | $ | 21,260 |   |   | $ | - |   |
| Obligations of states and political subdivisions |   |                | 26,236 |   |                                                                     |   | - |   |   |   | 26,236 |   |   |   | - |   |
| Corporate bonds:                                 |   |                |   |   |                                                                     |   |   |   |   |   |   |   |   |   |   |   |
| Pooled trust preferred securities                |   |                | 1,388  |   |                                                                     |   | - |   |   |   | - |   |   |   | 1,388 |   |
| MBS - GSE residential                            |   |                | 41,049 |   |                                                                     |   | - |   |   |   | 41,049 |   |   |   | - |   |
| Equity securities - financial services           |   |                | 482    |   |                                                                     |   | 482 |   |   |   | - |   |   |   | - |   |
| Total available-for-sale securities              |   | $                   | 90,415 |   |                                                                     | $      | 482 |   |   | $ | 88,545 |   |   | $ | 1,388 |   |

----

|                                             |   |                |   |   | Fair value measurements at December 31, 2010: |   |
|--------------------------------------------------|--------|---------------------|--------|--------|-----------------------------------------------------------------------------|--------|
|                                             |   | Total carrying |   |   | Quoted prices                                                          |   |   | Significant other |   |   | Significant |   |
|                                             |   | value at       |   |   | in active markets                                                 |   |   | observable inputs |   |   | unobservable inputs |   |
| Assets:                                          |   | December 31, 2010   |   |   | (Level 1)                                                                   |   |   | (Level 2) |   |   | (Level 3) |   |
| Available-for-sale securities:                   |   |                |   |   |                                                                        |   |   |   |   |   |   |   |
| Agency - GSE                                     |   | $                   | 16,288 |   |                                                                        | $      | - |   |   | $ | 16,288 |   |   | $ | - |   |
| Obligations of states and political subdivisions |   |                | 24,171 |   |                                                                        |   | - |   |   |   | 24,171 |   |   |   | - |   |
| Corporate bonds:                                 |   |                |   |   |                                                                        |   |   |   |   |   |   |   |   |   |   |   |
| Pooled trust preferred securities                |   |                | 1,453  |   |                                                                        |   | - |   |   |   | - |   |   |   | 1,453 |   |
| MBS - GSE residential                            |   |                | 40,553 |   |                                                                        |   | - |   |   |   | 40,553 |   |   |   | - |   |
| Equity securities - financial services           |   |                | 476    |   |                                                                        |   | 476 |   |   |   | - |   |   |   | - |   |
| Total available-for-sale securities              |   | $                   | 82,941 |   |                                                                        | $      | 476 |   |   | $ | 81,012 |   |   | $ | 1,453 |   |

|                                                                        |   | As of and for the |   |   | As of and for the |   |
|-----------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|---------------------------------------|--------|
|                                                                        |   | three months ended          |   |   | three months ended          |   |
|                                                                        |   | March 31, 2011              |   |   | March 31, 2010              |   |
| Assets:                                                                     |   |                                  |   |   |                                  |   |
| Balance at beginning of period                                              |   | $                                     | 1,453  |   |                                  | $      | 5,242 |   |
| Realized losses in earnings                                                 |   |                                  | (75    | )      |                                  |   | (79 | ) |
| Unrealized gains (losses) in OCI:                                           |   |                                  |   |   |                                  |   |   |   |
| Gains                                                                       |   |                                  | 150    |   |                                  |   | 428 |   |
| Losses                                                                      |   |                                  | (141   | )      |                                  |   | (223 | ) |
| Purchases, sales, issuances andsettlements, amortization, andaccretion, net |   |                                  | -      |   |                                  |   | 39 |   |
| Accretion                                                                   |   |                                  | 1      |   |                                  |   | - |   |
| Balance at end of period                                                    |   | $                                     | 1,388  |   |                                  | $      | 5,407 |   |

----

|                    |   |                |   |   | Fair value measurements at March 31, 2011 |   |
|-------------------------|--------|---------------------|--------|--------|-------------------------------------------------------------------------|--------|
|                    |   | Total carrying |   |   | Quoted prices                                                      |   |   | Significant other |   |   | Significant |   |
|                    |   | value at       |   |   | in active markets                                             |   |   | observable inputs |   |   | unobservable inputs |   |
| Assets:                 |   | March 31, 2011      |   |   | (Level 1)                                                               |   |   | (Level 2) |   |   | (Level 3) |   |
| Impaired loans          |   | $                   | 6,056  |   |                                                                    | $      | - |   |   | $ | 5,868 |   |   | $ | 188 |   |
| Other real estate owned |   |                | 1,132  |   |                                                                    |   | - |   |   |   | 1,053 |   |   |   | 79 |   |
| Total                   |   | $                   | 7,188  |   |                                                                    | $      | - |   |   | $ | 6,921 |   |   | $ | 267 |   |

|                    |   |                        |   |   | Fair value measurements at December 31, 2010 |   |
|-------------------------|--------|-----------------------------|--------|--------|----------------------------------------------------------------------------|--------|
|               |   | Total carrying         |   |   | Quoted prices                                                         |   |   | Significant other |   |   | Significant |   |
|               |   | value at               |   |   | in active markets                                                |   |   | observable inputs |   |   | unobservable inputs |   |
| Assets:                 |   | December 31, 2010 |   |   | (Level 1)                                                             |   |   | (Level 2) |   |   | (Level 3) |   |
| Impaired loans          |   | $                           | 4,453  |   |                                                                       | $      | - |   |   | $ | 4,387 |   |   | $ | 66 |   |
| Other real estate owned |   |                        | 1,261  |   |                                                                       |   | - |   |   |   | 1,053 |   |   |   | 208 |   |
| Total                   |   | $                           | 5,714  |   |                                                                       | $      | - |   |   | $ | 5,440 |   |   | $ | 274 |   |

|   | § | the effects of economic deterioration on current customers, specifically the effect of the economy on loan customers’ ability to repay loans; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | § | the costs and effects of litigation and of unexpected or adverse outcomes in such litigation; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | § | the impact of new laws and regulations, including the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the regulations promulgated there under; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | governmental monetary and fiscal policies, as well as legislative and regulatory changes; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | § | the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Financial Accounting Standards Board and other accounting standard setters; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | the risks of changes in interest rates on the level and composition of deposits, loan demand, and the values of loan collateral, securities and interest rate protection agreements, as well as interest rate risks; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | the effects of competition from other commercial banks, thrifts, mortgage banking firms, consumer finance companies, credit unions, securities brokerage firms, insurance companies, money market and other mutual funds and other financial institutions operating in the Company’s market area and elsewhere, including institutions operating locally, regionally, nationally and internationally, together with such competitors offering banking products and services by mail, telephone, computer and the internet; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | technological changes; |
|--------|--------|------------------------|

|   | § | acquisitions and integration of acquired businesses; |
|--------|--------|------------------------------------------------------|

|   | § | the failure of assumptions underlying the establishment of reserves for loan losses and estimations of values of collateral and various financial assets and liabilities; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | volatilities in the securities markets; |
|--------|--------|-----------------------------------------|

|   | § | deteriorating economic conditions; |
|--------|--------|------------------------------------|

|   | § | disruption of credit and equity markets; and |
|--------|--------|----------------------------------------------|

|   | § | acts of war or terrorism. |
|--------|--------|---------------------------|

----

----

|                                       |   | Three months ended: |    |
|--------------------------------------------|--------|-------------------------------|---------|
|                                       |   | March 31, 2011      |    |   | March 31, 2010 |   |
|                                       |   | Average                       |    |   |   |   |   | Yield / |   |   | Average |   |   |   |   |   | Yield / |   |
|                                       |   | balance                       |    |   | Interest |   |   | rate |   |   | balance |   |   | Interest |   |   | rate |   |
| Assets                                     |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning assets:                   |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans and leases                           |   | $                             | 419,208 |   |   | $ | 6,001 |   |   |   | 5.80 | % |   | $ | 437,200 |   |   | $ | 6,302 |   |   |   | 5.85 | % |
| Investments                                |   |                          | 97,458  |   |   |   | 741 |   |   |   | 3.08 |   |   |   | 92,932 |   |   |   | 924 |   |   |   | 4.03 |   |
| Federal funds sold                         |   |                          | 81      |   |   |   | 0 |   |   |   | 0.25 |   |   |   | 12,884 |   |   |   | 7 |   |   |   | 0.22 |   |
| Interest-bearing deposits                  |   |                          | 27,880  |   |   |   | 17 |   |   |   | 0.25 |   |   |   | 13,458 |   |   |   | 8 |   |   |   | 0.25 |   |
| Total interest-earning assets              |   |                          | 544,627 |   |   |   | 6,759 |   |   |   | 5.03 |   |   |   | 556,474 |   |   |   | 7,241 |   |   |   | 5.28 |   |
| Non-interest-earning assets                |   |                          | 37,044  |   |   |   |   |   |   |   |   |   |   |   | 31,888 |   |   |   |   |   |   |   |   |   |
| Total assets                               |   | $                             | 581,671 |   |   |   |   |   |   |   |   |   |   | $ | 588,362 |   |   |   |   |   |   |   |   |   |
|                                       |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities and shareholders' equity       |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities:              |   |                          |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other interest-bearing deposits            |   | $                             | 252,283 |   |   | $ | 297 |   |   |   | 0.48 | % |   | $ | 257,210 |   |   | $ | 506 |   |   |   | 0.78 | % |
| Certificates of deposit                    |   |                          | 139,878 |   |   |   | 745 |   |   |   | 2.16 |   |   |   | 146,384 |   |   |   | 908 |   |   |   | 2.46 |   |
| Borrowed funds                             |   |                          | 21,748  |   |   |   | 256 |   |   |   | 4.77 |   |   |   | 42,042 |   |   |   | 423 |   |   |   | 4.08 |   |
| Repurchase agreements                      |   |                          | 14,787  |   |   |   | 19 |   |   |   | 0.52 |   |   |   | 18,012 |   |   |   | 45 |   |   |   | 1.01 |   |
| Total interest-bearing liabilities         |   |                          | 428,696 |   |   |   | 1,317 |   |   |   | 1.25 |   |   |   | 463,648 |   |   |   | 1,882 |   |   |   | 1.65 |   |
| Non-interest-bearing deposits              |   |                          | 101,942 |   |   |   |   |   |   |   |   |   |   |   | 74,808 |   |   |   |   |   |   |   |   |   |
| Other non-interest-bearing liabilities     |   |                          | 3,257   |   |   |   |   |   |   |   |   |   |   |   | 3,380 |   |   |   |   |   |   |   |   |   |
| Shareholders' equity                       |   |                          | 47,776  |   |   |   |   |   |   |   |   |   |   |   | 46,526 |   |   |   |   |   |   |   |   |   |
| Total liabilities and shareholders' equity |   | $                             | 581,671 |   |   |   |   |   |   |   |   |   |   | $ | 588,362 |   |   |   |   |   |   |   |   |   |
| Net interest income/interest rate spread   |   |                          |    |   |   | $ | 5,442 |   |   |   | 3.78 | % |   |   |   |   |   | $ | 5,359 |   |   |   | 3.63 | % |
| Net interest margin                        |   |                          |    |   |   |   |   |   |   |   | 4.05 | % |   |   |   |   |   |   |   |   |   |   | 3.91 | % |

----

|   | • | specific loans that could have loss potential; |
|--------|---------|------------------------------------------------|

|   | • | levels of and trends in delinquencies and non-accrual loans; |
|--------|---------|--------------------------------------------------------------|

|   | • | levels of and trends in charge-offs and recoveries; |
|--------|---------|-----------------------------------------------------|

|   | • | trends in volume and terms of loans; |
|--------|---------|--------------------------------------|

|   | • | changes in risk selection and underwriting standards; |
|--------|---------|-------------------------------------------------------|

|   | • | changes in lending policies, procedures and practices; |
|--------|---------|--------------------------------------------------------|

|   | • | experience, ability and depth of lending management; |
|--------|---------|------------------------------------------------------|

|   | • | national and local economic trends and conditions; and |
|--------|---------|--------------------------------------------------------|

|   | • | changes in credit concentrations. |
|--------|---------|-----------------------------------|

----

----

|                                   |   | March 31, 2011 |   |   | December 31, 2010 |   |
|----------------------------------------|--------|--------------------------|--------|--------|-----------------------------|--------|
|                                   |   | Amount                   |   |   | %                           |   |   | Amount |   |   | % |   |
| MBS - GSE residential                  |   | $                        | 41,516 |   |                        |   | 45.7 |   |   | $ | 41,043 |   |   |   | 49.2 |   |
| State & municipal subdivisions     |   |                     | 26,236 |   |                        |   | 28.9 |   |   |   | 24,171 |   |   |   | 29.0 |   |
| Agency - GSE                           |   |                     | 21,260 |   |                        |   | 23.4 |   |   |   | 16,288 |   |   |   | 19.5 |   |
| Pooled trust preferred securities      |   |                     | 1,388  |   |                        |   | 1.5 |   |   |   | 1,453 |   |   |   | 1.7 |   |
| Equity securities - financial services |   |                     | 482    |   |                        |   | 0.5 |   |   |   | 476 |   |   |   | 0.6 |   |
| Total investments                      |   | $                        | 90,882 |   |                        |   | 100.0 |   |   | $ | 83,431 |   |   |   | 100.0 |   |

|   | · | The few observable transactions and market quotations that were available were not reliable for purposes of determining fair value at March 31, 2011; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An income valuation approach (present value technique) that maximizes the use of relevant observable market inputs and minimizes the use of unobservable inputs are equally or more representative of fair value than the market approach valuation technique; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The 13 PreTSLs are classified within “Level 3” (as defined in current accounting guidance and explained in Note 7, “Fair Measurements” of the consolidated financial statements) of the fair value hierarchy because significant adjustments are required to determine fair value at the measurement date.  The Company engages an independent third party that is a structured products specialist firm, to analyze the PreTSL portfolio.  The approach and results were reviewed and corroborated by management.  The approach to determine OTTI involves the following: |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Data about the transaction structure, as defined in the offering documents and the underlying collateral, were collected; |
|--------|---|---------------------------------------------------------------------------------------------------------------------------|

----

|   | o | The credit worthiness of each collateral is determined by reviewing the obligor and estimating the credit risk existing or inherent for such obligor; |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Using the credit risk estimates and making assumptions about default correlation, simulate 10,000 Monte Carlo scenarios (a class of computational algorithms that rely on repeated random sampling to compute their results) with respect to default timing for each security; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Project tranche cash flows over 10,000 Monte Carlo scenarios; determine the percentage of the total scenarios that result in a loss to the tranche.  If the number of scenarios resulting in a loss exceeded 50%, OTTI is presumed to exist; |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | Utilize several high-level financial factors to construct an appropriate discount rate for each tranche within each transaction. Factors include the portfolio’s weighted average credit rating, the average life of the collateral pool, the Bloomberg US Bank Benchmark discount rate, an appropriate spread differential to account for the rating assumed by the Bloomberg US Bank Benchmark and the actual average rating of the collateral pool. Lastly, credit loss already assumed under Monte Carlo simulation is subtracted from the discount rate construction in the previous step to avoid double-counting of credit risk; |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | With an appropriate discount rate for each tranche, an appropriate book price is determined; |
|--------|---|----------------------------------------------------------------------------------------------|

|   | o | With a projected discount rate, an estimated cash flow test was performed on each issue to compare the present value of the currently estimated cash flows as of March 31, 2011 to the amount projected as of the last measurement date, December 31, 2010; |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | o | If the results of the cash flow tests resulted in a significant adverse change in projected cash flows, credit-related OTTI is present. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                       |   | March 31, 2011 |    |   | December 31, 2010 |   |   |   |   |   |    |   |
|----------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|--------|--------|--------|--------|---------|--------|
|                       |   | Amount                   |    |   | %                           |   |   | Amount |   |   | %       |   |   | Variance |   |   | % |   |
|                       |   |                     |    |   |                        |   |   |   |   |   |    |   |   |   |   |   |   |   |
| Commercial and industrial  |   | $                        | 90,709  |   |                        |   | 21.6   |   |   | $      | 85,129  |   |   |   | 20.5 |   |   | $ | 5,580 |   |   |   | 6.6 |   |
| Commercial real estate:    |   |                     |    |   |                        |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-owner occupied         |   |                     | 85,270  |   |                        |   | 20.3   |   |   |   | 87,355  |   |   |   | 21.0 |   |   |   | (2,085 | ) |   |   | (2.4 | ) |
| Owner occupied             |   |                     | 69,472  |   |                        |   | 16.6   |   |   |   | 69,338  |   |   |   | 16.7 |   |   |   | 134 |   |   |   | 0.2 |   |
| Construction               |   |                     | 13,554  |   |                        |   | 3.2    |   |   |   | 12,501  |   |   |   | 3.0 |   |   |   | 1,053 |   |   |   | 8.4 |   |
| Consumer:                  |   |                     |    |   |                        |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Home equity installment    |   |                     | 38,578  |   |                        |   | 9.2    |   |   |   | 40,089  |   |   |   | 9.6 |   |   |   | (1,511 | ) |   |   | (3.8 | ) |
| Home equity line of credit |   |                     | 30,063  |   |                        |   | 7.2    |   |   |   | 29,185  |   |   |   | 7.0 |   |   |   | 878 |   |   |   | 3.0 |   |
| Auto                       |   |                     | 11,089  |   |                        |   | 2.7    |   |   |   | 10,734  |   |   |   | 2.6 |   |   |   | 355 |   |   |   | 3.3 |   |
| Other                      |   |                     | 6,413   |   |                        |   | 1.5    |   |   |   | 7,165   |   |   |   | 1.7 |   |   |   | (752 | ) |   |   | (10.5 | ) |
| Residential:               |   |                     |    |   |                        |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                |   |                     | 70,252  |   |                        |   | 16.7   |   |   |   | 68,160  |   |   |   | 16.4 |   |   |   | 2,092 |   |   |   | 3.1 |   |
| Construction               |   |                     | 4,097   |   |                        |   | 1.0    |   |   |   | 6,145   |   |   |   | 1.5 |   |   |   | (2,048 | ) |   |   | (33.3 | ) |
|                       |   |                     |    |   |                        |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                      |   |                     | 419,497 |   |                        |   | 100.0  |   |   |   | 415,801 |   |   |   | 100.0 |   |   | $ | 3,696 |   |   |   | 0.9 |   |
|                       |   |                     |    |   |                        |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance for loan losses  |   |                     | 8,224   |   |                        |   |   |   |   |   | 7,898   |   |   |   |   |   |   | $ | 326 |   |   |   |   |   |
|                       |   |                     |    |   |                        |   |   |   |   |   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net                 |   | $                        | 411,273 |   |                        |   |   |   |   | $      | 407,903 |   |   |   |   |   |   | $ | 3,370 |   |   |   |   |   |

|   | • | identification of specific impaired loans by loan category; |
|--------|---------|-------------------------------------------------------------|

|   | • | calculation of specific allowances where required for the impaired loans based on collateral and other objective and quantifiable evidence; |
|--------|---------|---------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | determination of homogenous pools by loan category and eliminating the impaired loans; |
|--------|---------|----------------------------------------------------------------------------------------|

|   | • | application of historical loss percentages (two-year average) to pools to determine the allowance allocation; |
|--------|---------|---------------------------------------------------------------------------------------------------------------|

|   | • | application of qualitative factor adjustment percentages to historical losses for trends or changes in the loan portfolio, and/or current economic conditions. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                            |   | As of and for the |        |   | As of and for the |   |        | As of and for the |   |
|---------------------------------|--------|---------------------------------------|-------------|--------|---------------------------------------|--------|-------------|---------------------------------------|--------|
|                            |   | three months ended          |        |   | twelve months ended         |   |        | three months ended          |   |
|                            |   | March 31, 2011              |        |   | December 31, 2010           |   |        | March 31, 2010              |   |
|                            |   |                                  |        |   |                                  |   |        |                                  |   |
| Balance at beginning of period  |   | $                                     | 7,897,822   |   |                                  | $      | 7,573,603   |                                  |   | $ | 7,573,603 |   |
|                            |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Provision charged to operations |   |                                  | 475,000     |   |                                  |   | 2,085,000   |                                  |   |   | 575,000 |   |
|                            |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Charge-offs:                    |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Commercial and industrial       |   |                                  | -           |   |                                  |   | 451,979     |                                  |   |   | 144,690 |   |
| Commercial real estate          |   |                                  | -           |   |                                  |   | 892,426     |                                  |   |   | 200,000 |   |
| Consumer                        |   |                                  | 67,429      |   |                                  |   | 462,816     |                                  |   |   | 76,483 |   |
| Residential                     |   |                                  | 98,835      |   |                                  |   | 1,812       |                                  |   |   | - |   |
| Total                           |   |                                  | 166,264     |   |                                  |   | 1,809,033   |                                  |   |   | 421,173 |   |
|                            |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Recoveries:                     |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Commercial and industrial       |   |                                  | 3,850       |   |                                  |   | 3,839       |                                  |   |   | 2,849 |   |
| Commercial real estate          |   |                                  | 246         |   |                                  |   | 2,799       |                                  |   |   | - |   |
| Consumer                        |   |                                  | 5,845       |   |                                  |   | 39,904      |                                  |   |   | 21,310 |   |
| Residential                     |   |                                  | 7,479       |   |                                  |   | 1,710       |                                  |   |   | - |   |
| Total                           |   |                                  | 17,420      |   |                                  |   | 48,252      |                                  |   |   | 24,159 |   |
|                            |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Net charge-offs                 |   |                                  | 148,844     |   |                                  |   | 1,760,781   |                                  |   |   | 397,014 |   |
|                            |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Balance at end of period        |   | $                                     | 8,223,978   |   |                                  | $      | 7,897,822   |                                  |   | $ | 7,751,589 |   |
|                            |   |                                  |        |   |                                  |   |        |                                  |   |   |   |   |
| Total loans, end of period      |   | $                                     | 419,806,900 |   |                                  | $      | 416,014,151 |                                  |   | $ | 434,257,867 |   |

|                                         |   | As of and for the |      |   |   | As of and for the |   |      |   | As of and for the |   |   |
|----------------------------------------------|--------|---------------------------------------|-----------|--------|--------|---------------------------------------|--------|-----------|--------|---------------------------------------|--------|--------|
|                                         |   | three months ended          |      |   |   | twelve months ended         |   |      |   | three months ended          |   |   |
|                                         |   | March 31, 2011              |      |   |   | December 31, 2010           |   |      |   | March 31, 2010              |   |   |
| Net charge-offs to (annualized):             |   |                                  |      |   |   |                                  |   |      |   |                                  |   |   |
| Average loans                                |   |                                  | 0.14      | %      |   |                                  |   | 0.41      | %      |                                  |   |   | 0.36 | % |   |
| Allowance for loan losses                    |   |                                  | 7.24      | %      |   |                                  |   | 22.29     | %      |                                  |   |   | 20.49 | % |   |
| Provision for loan losses                    |   |                                  | 0.31      |   | x      |                                  |   | 0.84      |   | x                                     |   |   | 0.69 |   | x |
|                                         |   |                                  |      |   |   |                                  |   |      |   |                                  |   |   |   |   |   |
| Allowance for loan losses to:                |   |                                  |      |   |   |                                  |   |      |   |                                  |   |   |   |   |   |
| Total loans                                  |   |                                  | 1.96      | %      |   |                                  |   | 1.90      | %      |                                  |   |   | 1.79 | % |   |
| Non-accrual loans                            |   |                                  | 0.87      |   | x      |                                  |   | 0.79      |   | x                                     |   |   | 0.70 |   | x |
| Non-performing loans                         |   |                                  | 0.82      |   | x      |                                  |   | 0.77      |   | x                                     |   |   | 0.68 |   | x |
| Net charge-offs (annualized)                 |   |                                  | 13.81     |   | x      |                                  |   | 4.48      |   | x                                     |   |   | 4.88 |   | x |
|                                         |   |                                  |      |   |   |                                  |   |      |   |                                  |   |   |   |   |   |
|                                         |   |                                  |      |   |   |                                  |   |      |   |                                  |   |   |   |   |   |
| Loans 30-89 days past due and still accruing |   | $                                     | 3,952,990 |   |   |                                  | $      | 2,611,162 |   |                                  |   | $      | 6,770,142 |   |   |
| Loans 90 days past due and accruing          |   | $                                     | 547,735   |   |   |                                  | $      | 288,618   |   |                                  |   | $      | 255,290 |   |   |
| Non-accrual loans                            |   | $                                     | 9,463,218 |   |   |                                  | $      | 9,968,675 |   |                                  |   | $      | 11,099,264 |   |   |
| Allowance for loan losses to loans 90        |   |                                  |      |   |   |                                  |   |      |   |                                  |   |   |   |   |   |
| days or more past due and accruing           |   |                                  | 15.01     |   | x      |                                  |   | 27.36     |   | x                                     |   |   | 30.36 |   | x |

----

----

|                                  |   | March 31, 2011 |        |   | December 31, 2010 |   |        | March 31, 2010 |   |
|---------------------------------------|--------|--------------------------|-------------|--------|-----------------------------|--------|-------------|--------------------------|--------|
|                                  |   |                     |        |   |                        |   |        |                     |   |
| Loans past due 90 days or more        |   |                     |        |   |                        |   |        |                     |   |
| and accruing                          |   | $                        | 547,735     |   |                        | $      | 288,618     |                     |   | $ | 255,290 |   |
| Non-accrual loans                     |   |                     | 9,463,218   |   |                        |   | 9,968,675   |                     |   |   | 11,099,264 |   |
| Total non-performing loans            |   |                     | 10,010,953  |   |                        |   | 10,257,293  |                     |   |   | 11,354,554 |   |
|                                  |   |                     |        |   |                        |   |        |                     |   |   |   |   |
| Troubled debt restructurings          |   |                     | 2,067,595   |   |                        |   | 782,688     |                     |   |   | - |   |
| Other real estate owned               |   |                     | 1,131,595   |   |                        |   | 1,260,895   |                     |   |   | 337,397 |   |
| Non-accrual securities                |   |                     | 932,521     |   |                        |   | 1,091,311   |                     |   |   | 1,910,243 |   |
| Total non-performing assets           |   | $                        | 14,142,664  |   |                        | $      | 13,392,187  |                     |   | $ | 13,602,194 |   |
|                                  |   |                     |        |   |                        |   |        |                     |   |   |   |   |
| Total loans including HFS             |   | $                        | 419,806,900 |   |                        | $      | 416,014,151 |                     |   | $ | 434,257,867 |   |
| Total assets                          |   | $                        | 596,296,512 |   |                        | $      | 561,673,152 |                     |   | $ | 595,288,575 |   |
| Non-accrual loans to total loans      |   |                     | 2.25        | %      |                        |   | 2.40        | %                        |   |   | 2.56 | % |
| Non-performing loans to total loans   |   |                     | 2.38        | %      |                        |   | 2.47        | %                        |   |   | 2.61 | % |
| Non-performing assets to total assets |   |                     | 2.37        | %      |                        |   | 2.38        | %                        |   |   | 2.28 | % |

|                       |   | Gross    |    |   | Past due 90        |   |   | Non-    |   |   | Total non- |   |   | % of |   |
|----------------------------|--------|----------|---------|--------|------------------------------|--------|--------|---------|--------|--------|-----------------|--------|--------|-----------|--------|
|                       |   | loan     |    |   | days or more       |   |   | accrual |   |   | performing      |   |   | gross     |   |
|                       |   | balances |    |   | and still accruing |   |   | loans   |   |   | loans           |   |   | loans     |   |
|                       |   |     |    |   |                         |   |   |    |   |   |            |   |   |      |   |
| Commercial and industrial  |   | $        | 90,709  |   |                         | $      | 210    |    |   | $      | 165             |   |   | $         | 375    |   |   |   | 0.41 | % |
| Commercial real estate:    |   |     |    |   |                         |   |   |    |   |   |            |   |   |      |   |   |   |   |   |   |
| Non-owner occupied         |   |     | 85,270  |   |                         |   | 228    |    |   |   | 1,970           |   |   |      | 2,199  |   |   |   | 2.58 | % |
| Owner occupied             |   |     | 69,472  |   |                         |   | -      |    |   |   | 2,765           |   |   |      | 2,765  |   |   |   | 3.98 | % |
| Construction               |   |     | 13,554  |   |                         |   | -      |    |   |   | -               |   |   |      | -      |   |   |   | - |   |
| Consumer:                  |   |     |    |   |                         |   |   |    |   |   |            |   |   |      |   |   |   |   |   |   |
| Home equity installment    |   |     | 38,578  |   |                         |   | 110    |    |   |   | 705             |   |   |      | 815    |   |   |   | 2.11 | % |
| Home equity line of credit |   |     | 30,063  |   |                         |   | -      |    |   |   | 490             |   |   |      | 490    |   |   |   | 1.63 | % |
| Auto                       |   |     | 11,089  |   |                         |   | -      |    |   |   | -               |   |   |      | -      |   |   |   | - |   |
| Other                      |   |     | 6,413   |   |                         |   | -      |    |   |   | -               |   |   |      | -      |   |   |   | - |   |
| Residential:               |   |     |    |   |                         |   |   |    |   |   |            |   |   |      |   |   |   |   |   |   |
| Real estate                |   |     | 70,252  |   |                         |   | -      |    |   |   | 3,274           |   |   |      | 3,274  |   |   |   | 4.66 | % |
| Construction               |   |     | 4,097   |   |                         |   | -      |    |   |   | 94              |   |   |      | 94     |   |   |   | 2.30 | % |
| Loans held for sale        |   |     | 310     |   |                         |   | -      |    |   |   | -               |   |   |      | -      |   |   |   | - |   |
| Total                      |   | $        | 419,807 |   |                         | $      | 548    |    |   | $      | 9,463           |   |   | $         | 10,012 |   |   |   | 2.38 | % |

----

|                    |   | March 31, 2011 |    |   | December 31, 2010 |   |
|-------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|
|                    |   | Amount                   |    |   | %                           |   |   | Amount |   |   | % |   |
| Money market            |   | $                        | 82,329  |   |                        |   | 16.0 |   |   | $ | 79,610 |   |   |   | 16.5 |   |
| NOW                     |   |                     | 65,738  |   |                        |   | 12.8 |   |   |   | 67,572 |   |   |   | 14.0 |   |
| Savings and club        |   |                     | 114,847 |   |                        |   | 22.4 |   |   |   | 105,835 |   |   |   | 21.9 |   |
| Certificates of deposit |   |                     | 137,003 |   |                        |   | 26.7 |   |   |   | 143,651 |   |   |   | 29.8 |   |
| Total interest-bearing  |   |                     | 399,917 |   |                        |   | 77.9 |   |   |   | 396,668 |   |   |   | 82.2 |   |
| Non-interest-bearing    |   |                     | 113,283 |   |                        |   | 22.1 |   |   |   | 85,780 |   |   |   | 17.8 |   |
| Total deposits          |   | $                        | 513,200 |   |                        |   | 100.0 |   |   | $ | 482,448 |   |   |   | 100.0 |   |

----

|                             |   | March 31, 2011 |   |   | December 31, 2010 |   |
|----------------------------------|--------|--------------------------|--------|--------|-----------------------------|--------|
|                             |   | Amount                   |   |   | %                           |   |   | Amount |   |   | % |   |
|  Repurchase agreements      |   | $                        | 10,406 |   |                        |   | 32.3 |   |   | $ | 7,548 |   |   |   | 25.5 |   |
|  Demand note, U.S. Treasury |   |                     | 725    |   |                        |   | 2.3 |   |   |   | 1,000 |   |   |   | 3.4 |   |
|  FHLB advances:             |   |                     |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                        |   |                     | 21,000 |   |                        |   | 65.4 |   |   |   | 21,000 |   |   |   | 71.1 |   |
| Total borrowings                 |   | $                        | 32,131 |   |                        |   | 100.0 |   |   | $ | 29,548 |   |   |   | 100.0 |   |

----

|                                          |   |              |    |   | More than            |   |    | More than        |   |   |             |   |   |   |    |
|-----------------------------------------------|--------|-------------------|---------|--------|---------------------------|--------|---------|-----------------------|--------|--------|------------------|--------|--------|--------|---------|
|                                          |   | Three months |    |   | three months to |   |    | one year to |   |   | More than   |   |   |   |    |
|                                          |   | or less      |    |   | twelve months        |   |    | three years      |   |   | three years |   |   | Total  |    |
| Cash and cash equivalents                     |   | $                 | 37,762  |   |                      | $      | -       |                  |   | $      | -                |   |   | $      | 9,681   |   |   | $ | 47,443 |   |
| Investment securities (1)(2)                  |   |              | 5,776   |   |                      |   | 12,648  |                  |   |   | 23,846           |   |   |   | 52,927  |   |   |   | 95,197 |   |
| Loans (2)                                     |   |              | 129,006 |   |                      |   | 77,495  |                  |   |   | 107,301          |   |   |   | 97,781  |   |   |   | 411,583 |   |
| Fixed and other assets                        |   |              | -       |   |                      |   | 9,502   |                  |   |   | -                |   |   |   | 32,572  |   |   |   | 42,074 |   |
| Total assets                                  |   | $                 | 172,544 |   |                      | $      | 99,645  |                  |   | $      | 131,147          |   |   | $      | 192,961 |   |   | $ | 596,297 |   |
| Total cumulative assets                       |   | $                 | 172,544 |   |                      | $      | 272,189 |                  |   | $      | 403,336          |   |   | $      | 596,297 |   |   |   |   |   |
|                                          |   |              |    |   |                      |   |    |                  |   |   |             |   |   |   |    |   |   |   |   |   |
| Non-interest bearing transaction deposits (3) |   | $                 | -       |   |                      | $      | 11,328  |                  |   | $      | 31,153           |   |   | $      | 70,802  |   |   | $ | 113,283 |   |
| Interest-bearing transaction deposits (3)     |   |              | 71,312  |   |                      |   | -       |                  |   |   | 72,542           |   |   |   | 119,062 |   |   |   | 262,916 |   |
| Time deposits                                 |   |              | 17,529  |   |                      |   | 59,598  |                  |   |   | 45,020           |   |   |   | 14,854  |   |   |   | 137,001 |   |
| Repurchase agreements                         |   |              | 10,406  |   |                      |   | -       |                  |   |   | -                |   |   |   | -       |   |   |   | 10,406 |   |
| Short-term borrowings                         |   |              | 725     |   |                      |   | -       |                  |   |   | -                |   |   |   | -       |   |   |   | 725 |   |
| Long-term debt                                |   |              | -       |   |                      |   | -       |                  |   |   | 5,000            |   |   |   | 16,000  |   |   |   | 21,000 |   |
| Other liabilities                             |   |              | -       |   |                      |   | -       |                  |   |   | -                |   |   |   | 2,663   |   |   |   | 2,663 |   |
| Total liabilities                             |   | $                 | 99,972  |   |                      | $      | 70,926  |                  |   | $      | 153,715          |   |   | $      | 223,381 |   |   | $ | 547,994 |   |
| Total cumulative liabilities                  |   | $                 | 99,972  |   |                      | $      | 170,898 |                  |   | $      | 324,613          |   |   | $      | 547,994 |   |   |   |   |   |
|                                          |   |              |    |   |                      |   |    |                  |   |   |             |   |   |   |    |   |   |   |   |   |
| Interest sensitivity gap                      |   | $                 | 72,572  |   |                      | $      | 28,719  |                  |   | $      | (22,568          | )      |   | $      | (30,420 | ) |   |   |   |   |
|                                          |   |              |    |   |                      |   |    |                  |   |   |             |   |   |   |    |   |   |   |   |   |
| Cumulative gap                                |   | $                 | 72,572  |   |                      | $      | 101,291 |                  |   | $      | 78,723           |   |   | $      | 48,303  |   |   |   |   |   |
|                                          |   |              |    |   |                      |   |    |                  |   |   |             |   |   |   |    |   |   |   |   |   |
| Cumulative gap to total assets                |   |              | 12.2    | %      |                      |   | 17.0    | %                     |   |   | 13.2             | %      |   |   | 8.1     | % |   |   |   |   |

----

|   | (1) | Includes FHLB stock and the net unrealized gains/losses on securities AFS. |
|--------|-----|----------------------------------------------------------------------------|

|   | (2) | Investments and loans are included in the earlier of the period in which interest rates were next scheduled to adjust or the period in which they are due.  In addition, loans are included in the periods in which they are scheduled to be repaid based on scheduled amortization.  For amortizing loans and MBS – GSE residential, annual prepayment rates are assumed reflecting historical experience as well as management’s knowledge and experience of its loan products. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The Bank’s demand and savings accounts are generally subject to immediate withdrawal.  However, management considers a certain amount of such accounts to be core accounts having significantly longer effective maturities based on the retention experiences of such deposits in changing interest rate environments.  The effective maturities presented are the recommended maturity distribution limits for non-maturing deposits based on historical deposit studies. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Earnings at risk:           |   | Rates +200 |   |   | Rates -200 |   |
|-----------------------------|--------|------------|--------|--------|------------|--------|
| Percent change in:          |   |       |   |   |       |   |
| Net interest income         |   |       | 5.3    | %      |       |   | (2.6 | ) % |
| Net income                  |   |       | 14.7   |   |       |   | (7.3 | ) |
|                        |   |       |   |   |       |   |   |   |
| Economic value at risk:     |   |       |   |   |       |   |   |   |
| Percent change in:          |   |       |   |   |       |   |   |   |
| Economic value of equity    |   |       | (24.4  | )      |       |   | (5.8 | ) |
| Economic value of equity    |   |       |   |   |       |   |   |   |
| as a percent of book assets |   |       | (1.9   | )      |       |   | (0.5 | ) |

|                                    |   | Net interest |   |   | $        |   |   | %        |   |
|-----------------------------------------|--------|-------------------|--------|--------|----------|--------|--------|----------|--------|
| Change in interest rates |   | income            |   |   | variance |   |   | variance |   |
|                                    |   |              |   |   |     |   |   |     |   |   |
| +200 basis points                       |   | $                 | 22,861 |   |     | $      | 1,149  |     |   |   | 5.3 | % |
| +100 basis points                       |   |              | 22,114 |   |     |   | 402    |     |   |   | 1.9 |   |
|   Flat rate                        |   |              | 21,712 |   |     |   | -      |     |   |   | - |   |
| -100 basis points                       |   |              | 21,779 |   |     |   | 67     |     |   |   | 0.3 |   |
| -200 basis points                       |   |              | 21,153 |   |     |   | (559   | )        |   |   | (2.6 | ) |

----

----

|                 |   |   |       |   |   |   |   |   |                   |   |   |       | To be well capitalized |    |
|---------------------------|--------|--------|------------|--------|--------|--------|--------|--------|------------------------|--------|--------|------------|---------------------------------------|---------|
|                      |   |   |       |   |   |   |   |   | For capital       |   |   |       | under prompt corrective     |    |
|                      |   | Actual |       |   |   |   |   |   | adequacy purposes |   |   |       | action provisions                |    |
|                      |   | amount |       |   | Ratio  |   |   |   | Amount                 |   |   |       | Ratio                                 |    |   |   | Amount |   |   |   | Ratio |   |
| Total capital             |   |   |       |   |   |   |   |   |                   |   |   |       |                                  |    |   |   |   |   |   |   |   |   |
| (to risk-weighted assets) |   |   |       |   |   |   |   |   |                   |   |   |       |                                  |    |   |   |   |   |   |   |   |   |
| Consolidated              |   | $      | 54,509,388 |   |   |   | 12.1   | %      | ≥                |   | $      | 36,069,556 |                                  | ≥ |   |   | 8.0 | % |   |   |   | N/A |   |   |   |   | N/A |   |
| Bank                      |   | $      | 54,130,664 |   |   |   | 12.0   | %      | ≥                |   | $      | 36,059,748 |                                  | ≥ |   |   | 8.0 | % | ≥ |   | $ | 45,074,685 |   | ≥ |   |   | 10.0 | % |
| Tier I capital            |   |   |       |   |   |   |   |   |                   |   |   |       |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to risk-weighted assets) |   |   |       |   |   |   |   |   |                   |   |   |       |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated              |   | $      | 48,768,534 |   |   |   | 10.8   | %      | ≥                |   | $      | 18,034,778 |                                  | ≥ |   |   | 4.0 | % |   |   |   | N/A |   |   |   |   | N/A |   |
| Bank                      |   | $      | 48,463,312 |   |   |   | 10.8   | %      | ≥                |   | $      | 18,029,874 |                                  | ≥ |   |   | 4.0 | % | ≥ |   | $ | 27,044,811 |   | ≥ |   |   | 6.0 | % |
| Tier I capital            |   |   |       |   |   |   |   |   |                   |   |   |       |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (to average assets)       |   |   |       |   |   |   |   |   |                   |   |   |       |                                  |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated              |   | $      | 48,768,534 |   |   |   | 8.4    | %      | ≥                |   | $      | 23,260,311 |                                  | ≥ |   |   | 4.0 | % |   |   |   | N/A |   |   |   |   | N/A |   |
| Bank                      |   | $      | 48,463,312 |   |   |   | 8.4    | %      | ≥                |   | $      | 23,242,306 |                                  | ≥ |   |   | 4.0 | % | ≥ |   | $ | 29,052,882 |   | ≥ |   |   | 5.0 | % |

----

----

----

----

|               | Fidelity D & D Bancorp, Inc.      |
|--------------------|---------------------------------------|
|               |                                  |
| Date: May 11, 2011 | /s/ Daniel J. Santaniello             |   |
|               | Daniel J. Santaniello,                |
|               | President and Chief Executive Officer |

|               | Fidelity D & D Bancorp, Inc.      |
|--------------------|---------------------------------------|
|               |                                  |
| Date: May 11, 2011 | /s/ Salvatore R. DeFrancesco, Jr.     |   |
|               | Salvatore R. DeFrancesco, Jr.,        |
|               | Treasurer and Chief Financial Officer |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         | Page   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 3(i) Amended and Restated Articles of Incorporation of Registrant. Incorporated by reference to Annex B of the Proxy Statement/Prospectus included in Registrant’s Amendment 4 to its Registration Statement No. 333-90273 on Form S-4, filed with the SEC on April 6, 2000.                                                                                                                                                                                                                                                                     |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 3(ii) Amended and Restated Bylaws of Registrant. Incorporated by reference to Exhibit 3(ii) to Registrant’s Form 8-K filed with the SEC on November 21, 2007.                                                                                                                                                                                                                                                                                                                                                                                    |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.1 1998 Independent Directors Stock Option Plan of The Fidelity Deposit and Discount Bank, as assumed by Registrant. Incorporated by reference to Exhibit 10.1 to Registrant’s Registration Statement No. 333-90273 on Form S-4, filed with the SEC on November 3, 1999.                                                                                                                                                                                                                                                                       |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.2 1998 Stock Incentive Plan of The Fidelity Deposit and Discount Bank, as assumed by Registrant. Incorporated by reference to Exhibit 10.2 of Registrant’s Registration Statement No. 333-90273 on Form S-4, filed with the SEC on November 3, 1999.                                                                                                                                                                                                                                                                                          |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.3 Registrant’s 2000 Dividend Reinvestment Plan.  Incorporated by reference to Exhibit 4 to Registrant’s Registration Statement No. 333-45668 on Form S-1, filed with the SEC on September 12, 2000 and as amended by Pre-Effective Amendment No. 1 on October 11, 2000, by Post-Effective Amendment No. 1 on May 30, 2001, by Post-Effective Amendment No. 2 on July 7, 2005 and by Registration Statement No. 333-152806 on Form S-3 filed on August 6, 2008 and by Post-Effective Amendment No. 1 on January 25, 2010. |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.4 Registrant’s 2000 Independent Directors Stock Option Plan.  Incorporated by reference to Exhibit 4.3 to Registrant’s Registration Statement No. 333-64356 on Form S-8 filed with the SEC on July 2, 2001.                                                                                                                                                                                                                                                                                                                   |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.5 Amendment, dated October 2, 2007, to the Registrant’s 2000 Independent Directors Stock Option Plan.  Incorporated by reference to Exhibit 10.2 to Registrant’s Form 8-K filed with the SEC on October 4, 2007.                                                                                                                                                                                                                                                                                                              |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.6 Registrant’s 2000 Stock Incentive Plan.  Incorporated by reference to Exhibit 4.4 to Registrant’s Registration Statement No. 333-64356 on Form S-8 filed with the SEC on July 2, 2001.                                                                                                                                                                                                                                                                                                                                      |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.7 Amendment, dated October 2, 2007, to the Registrant’s 2000 Stock Incentive Plan.  Incorporated by reference to Exhibit 10.1 to Registrant’s Form 8-K filed with the SEC on October 4, 2007.                                                                                                                                                                                                                                                                                                                                 |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.8 Registrant’s 2002 Employee Stock Purchase Plan.  Incorporated by reference to Exhibit 4.4 to Registrant’s Registration Statement No. 333-113339 on Form S-8 filed with the SEC on March 5, 2004.                                                                                                                                                                                                                                                                                                                            |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.9 Change of Control Agreement with Salvatore R. DeFrancesco, Registrant and The Fidelity Deposit and Discount Bank, dated March 21, 2006.  Incorporated by reference to Exhibit 99.2 to Registrant’s Current Report on Form 8-K filed with the SEC on March 27, 2006.                                                                                                                                                                                                                                                               |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.10 Amended and Restated Executive Employment Agreement between Fidelity D & D Bancorp, Inc., The Fidelity Deposit and Discount Bank and Daniel J. Santaniello, dated March 23, 2011. Incorporated by reference to Exhibit 99.1 to Registrant’s Current Report on Form 8-K filed with the SEC on March 29, 2011.                                                                                                                                                                                                                      |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.11 Amended and Restated Executive Employment Agreement between Fidelity D & D Bancorp, Inc., The Fidelity Deposit and Discount Bankand Timothy P. O’Brien, dated March 23, 2011.  Incorporated by reference to Exhibit 99.2 to Registrant’s Current Report on Form 8-K filed with the SEC on March 29, 2011.                                                                                                                                                                                                              |         | *      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |         |   |
| 10.12 Change in Control and Severance Agreement between Fidelity D & D Bancorp, Inc., The Fidelity Deposit and Discount Bankand John T. Piszak, dated March 23, 2011.   Incorporated by reference to Exhibit 99.3 to Registrant’s Current Report on Form 8-K filed with the SEC on March 29, 2011.                                                                                                                                                                                                                            |    | *      |

----

| 11Statement regarding computation of earnings per share.                                                                                                    |         | 21     |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------|
|                                                                                                                                                        |         |   |
| 31.1 Rule 13a-14(a) Certification of Principal Executive Officer.                                                                                           |         | 48     |
|                                                                                                                                                        |         |   |
| 31.2 Rule 13a-14(a) Certification of Principal Financial Officer.                                                                                           |         | 49     |
|                                                                                                                                                        |         |   |
| 32.1 Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |         | 50     |
|                                                                                                                                                        |         |   |
| 32.2 Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |    | 50     |

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----