**FORM      10-QSB**

| For                the Quarter Ended September 30, 2005 | Commission                file number 000-29599 |
|---------------------------------------------------------|-------------------------------------------------|

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

----

|                   |                                                                       |   |
|------------------------|----------------------------------------------------------------------------|--------|
|                   |                                                                       |   |
| Part                I  |                                                                       | Page   |
| Part                I  | FINANCIAL                INFORMATION                                       |   |
|                   |                                                                       |   |
| Item                1. | Consolidated                Financial Statements                           | 3      |
|                   |                                                                       |   |
| Item                2. | Management’s                Discussion and Analysis or               |   |
|                   | Plan                of Operation                                           | 15     |
|                   |                                                                       |   |
| Item                3. | Controls                and Procedures                                     | 26     |
|                   |                                                                       |   |
| Part                II | OTHER                INFORMATION                                           |   |
|                   |                                                                       |   |
| Item                2. | Unregistered                Sales of Equity Securities and Use of Proceeds | 28     |
|                   |                                                                       |   |
| Item                6. | Exhibits                                                                   | 28     |

----

**Item      1.**
**Consolidated      Financial Statements**

**PATRIOT      NATIONAL BANCORP, INC**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                               |   | September                30, |              | December                31, |   |
|----------------------------------------------------------------------------------------------------|--------|------------------------------|-------------------|-----------------------------|--------|
|                                                                                               |   | 2005                         |              | 2004                        |   |
|                                                                                               |   |                         | (Unaudited)  |                        |   |   |   |
| **ASSETS**                                                                                         |   |                         |              |                        |   |   |   |
| Cash                and due from banks                                                             |   | $                            | 10,172,850        |                        | $      | 6,670,409 |   |
| Federal                funds sold                                                                  |   |                         | 7,800,000         |                        |   | 37,500,000 |   |
| Short                term investments                                                              |   |                         | 1,083,631         |                        |   | 11,460,057 |   |
| **Cash                and cash equivalents**                                                       |   |                         | **19,056,481**    |                        |   | **55,630,466** |   |
|                                                                                               |   |                         |              |                        |   |   |   |
| Available                for sale securities (at fair value)                                       |   |                         | 85,153,142        |                        |   | 76,269,475 |   |
| Federal                Reserve Bank stock                                                          |   |                         | 693,200           |                        |   | 692,600 |   |
| Federal                Home Loan Bank stock                                                        |   |                         | 1,296,700         |                        |   | 1,296,700 |   |
| Loans                receivable (net of allowance for loan losses: 2005                $4,191,525; |   |                         |              |                        |   |   |   |
| 2004                $3,481,525)                                                                    |   |                         | 340,989,746       |                        |   | 263,874,820 |   |
| Accrued                interest receivable                                                         |   |                         | 2,241,622         |                        |   | 1,758,339 |   |
| Premises                and equipment                                                              |   |                         | 2,440,085         |                        |   | 2,132,633 |   |
| Deferred                tax asset, net                                                             |   |                         | 1,959,865         |                        |   | 1,677,042 |   |
| Goodwill                                                                                           |   |                         | 930,091           |                        |   | 930,091 |   |
| Other                assets                                                                        |   |                         | 835,857           |                        |   | 784,789 |   |
| **Total                assets**                                                                    |   | **$**                        | **455,596,789**   |                        | **$**  | **405,046,955** |   |
| **LIABILITIES                AND SHAREHOLDERS' EQUITY**                                            |   |                         |              |                        |   |   |   |
| **Liabilities**                                                                                    |   |                         |              |                        |   |   |   |
| Deposits:                                                                                          |   |                         |              |                        |   |   |   |
| Noninterest                bearing deposits                                                        |   | $                            | 44,855,669        |                        | $      | 42,584,120 |   |
| Interest                bearing deposits                                                           |   |                         | 364,912,600       |                        |   | 324,421,205 |   |
| **Total                deposits**                                                                  |   |                         | **409,768,269**   |                        |   | **367,005,325** |   |
| Federal                Home Loan Bank borrowings                                                   |   |                         | 4,000,000         |                        |   | 8,000,000 |   |
| Subordinated                debt                                                                   |   |                         | 8,248,000         |                        |   | 8,248,000 |   |
| Accrued                expenses and other liabilities                                              |   |                         | 2,336,749         |                        |   | 2,037,196 |   |
| **Total                liabilities**                                                               |   |                         | **424,353,018**   |                        |   | **385,290,521** |   |
| **Shareholders'                equity**                                                            |   |                         |              |                        |   |   |   |
| Preferred                stock: 1,000,000 shares authorized; no shares issued                      |   |                         |              |                        |   |   |   |
| Common                stock, $2 par value: 30,000,000 shares authorized; shares                    |   |                         |              |                        |   |   |   |
| issued                and outstanding: 2005 - 3,229,274; 2004 - 2,486,391                          |   |                         | 6,458,548         |                        |   | 4,972,782 |   |
| Additional                paid-in capital                                                          |   |                         | 21,690,078        |                        |   | 11,830,173 |   |
| Retained                earnings                                                                   |   |                         | 3,949,830         |                        |   | 3,346,718 |   |
| Accumulated                other comprehensive loss - net unrealized                               |   |                         |              |                        |   |   |   |
| loss                on available for sale securities, net of taxes                                 |   |                         | (854,685          | )                           |   | (393,239 | ) |
| **Total                shareholders' equity**                                                      |   |                         | **31,243,771**    |                        |   | **19,756,434** |   |
| **Total                liabilities and shareholders' equity**                                      |   | **$**                        | **455,596,789**   |                        | **$**  | **405,046,955** |   |
|                                                                                               |   |                         |              |                        |   |   |   |

----

**PATRIOT      NATIONAL BANCORP, INC.**

**CONSOLIDATED      STATEMENTS OF INCOME**

**(Unaudited)**

|                                                       |   | Three                Months Ended |          | Nine                Months Ended |   |
|------------------------------------------------------------|--------|-----------------------------------|---------------|----------------------------------|--------|
|                                                       |   | September                30,      |          | September                30,     |   |
|                                                       |   | 2005                              |          | 2004                             |   | 2005 |   | 2004 |   |
| Interest                and Dividend Income                |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Interest                and fees on loans                  |   | $                                 | 5,536,477     |                             | $      | 4,107,029 |   | $ | 15,128,669 |   | $ | 11,236,459 |   |
| Interest                and dividends on                   |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| investment                securities                       |   |                              | 814,647       |                             |   | 707,740 |   |   | 2,483,631 |   |   | 2,156,205 |   |
| Interest                on federal funds sold              |   |                              | 88,134        |                             |   | 40,335 |   |   | 230,460 |   |   | 81,145 |   |
| **Total                interest and dividend income**      |   |                              | **6,439,258** |                             |   | **4,855,104** |   |   | **17,842,760** |   |   | **13,473,809** |   |
| Interest                Expense                            |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Interest                on deposits                        |   |                              | 2,514,851     |                             |   | 1,564,253 |   |   | 6,543,197 |   |   | 4,400,680 |   |
| Interest                on Federal Home Loan Bank          |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| borrowings                                                 |   |                              | 80,024        |                             |   | 96,192 |   |   | 303,485 |   |   | 298,891 |   |
| Interest                on subordinated debt               |   |                              | 136,924       |                             |   | 98,225 |   |   | 380,267 |   |   | 274,127 |   |
| Interest                on other borrowings                |   |                              | 1,312         |                             |   | 2,786 |   |   | 1,312 |   |   | 41,353 |   |
| **Total                interest expense**                  |   |                              | **2,733,111** |                             |   | **1,761,456** |   |   | **7,228,261** |   |   | **5,015,051** |   |
| **Net                interest income**                     |   |                              | **3,706,147** |                             |   | **3,093,648** |   |   | **10,614,499** |   |   | **8,458,758** |   |
| Provision                for Loan Losses                   |   |                              | 350,000       |                             |   | 235,000 |   |   | 710,000 |   |   | 455,000 |   |
| **Net                interest income after**               |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| **provision                for loan losses**               |   |                              | **3,356,147** |                             |   | **2,858,648** |   |   | **9,904,499** |   |   | **8,003,758** |   |
| Noninterest                Income                          |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Mortgage                brokerage referral fees            |   |                              | 673,029       |                             |   | 383,114 |   |   | 1,648,487 |   |   | 1,396,544 |   |
| Loan                processing fees                        |   |                              | 125,635       |                             |   | 95,900 |   |   | 308,978 |   |   | 336,984 |   |
| Fees                and service charges                    |   |                              | 143,793       |                             |   | 114,531 |   |   | 428,195 |   |   | 329,253 |   |
| Other                income                                |   |                              | 43,125        |                             |   | 22,577 |   |   | 131,818 |   |   | 80,684 |   |
| **Total                noninterest income**                |   |                              | **985,582**   |                             |   | **616,122** |   |   | **2,517,478** |   |   | **2,143,465** |   |
| Noninterest                Expenses                        |   |                              |          |                             |   |   |   |   |   |   |   |   |   |
| Salaries                and benefits                       |   |                              | 2,393,739     |                             |   | 1,850,932 |   |   | 6,652,635 |   |   | 5,514,710 |   |
| Occupancy                and equipment expenses, net       |   |                              | 538,645       |                             |   | 473,821 |   |   | 1,523,961 |   |   | 1,233,961 |   |
| Data                processing and other outside services  |   |                              | 333,024       |                             |   | 201,337 |   |   | 817,291 |   |   | 602,398 |   |
| Professional                services                       |   |                              | 120,170       |                             |   | 87,569 |   |   | 383,461 |   |   | 298,670 |   |
| Advertising                and promotional expenses        |   |                              | 112,459       |                             |   | 69,273 |   |   | 336,206 |   |   | 288,648 |   |
| Loan                administration and processing expenses |   |                              | 47,839        |                             |   | 53,746 |   |   | 153,511 |   |   | 185,501 |   |
| Other                noninterest expenses                  |   |                              | 324,142       |                             |   | 319,101 |   |   | 1,010,924 |   |   | 867,719 |   |
| **Total                noninterest expenses**              |   |                              | **3,870,018** |                             |   | **3,055,779** |   |   | **10,877,989** |   |   | **8,991,607** |   |
| **Income                before income taxes**              |   |                              | **471,711**   |                             |   | **418,991** |   |   | **1,543,988** |   |   | **1,155,616** |   |
| Provision                for Income Taxes                  |   |                              | 191,000       |                             |   | 169,000 |   |   | 625,000 |   |   | 470,000 |   |
| **Net                income**                              |   | **$**                             | **280,711**   |                             | **$**  | **249,991** |   | **$** | **918,988** |   | **$** | **685,616** |   |
| **Basic                income per share**                  |   | **$**                             | **0.11**      |                             | **$**  | **0.10** |   | **$** | **0.37** |   | **$** | **0.28** |   |
| **Diluted                income per share**                |   | **$**                             | **0.11**      |                             | **$**  | **0.10** |   | **$** | **0.36** |   | **$** | **0.27** |   |
| **Dividends                per share**                     |   | **$**                             | **0.040**     |                             | **$**  | **0.035** |   | **$** | **0.115** |   | **$** | **0.100** |   |

----

**PATRIOT      NATIONAL BANCORP, INC**

**CONSOLIDATED      STATEMENTS OF COMPREHENSIVE INCOME (LOSS)**

**(Unaudited)**

|                                                            |   | Three                Months Ended |       | Nine                Months Ended |   |
|-----------------------------------------------------------------|--------|-----------------------------------|------------|----------------------------------|--------|
|                                                            |   | September                30,      |       | September                30,     |   |
|                                                            |   | 2005                              |       | 2004                             |   | 2005 |   | 2004 |   |
|                                                            |   |                              |       |                             |   |   |   |   |   |   |   |   |   |
| Net                income                                       |   | $                                 | 280,711    |                             | $      | 249,991 |   | $ | 918,988 |   | $ | 685,616 |   |
|                                                            |   |                              |       |                             |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) on securities: |   |                              |       |                             |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gains (losses) arising        |   |                              |       |                             |   |   |   |   |   |   |   |   |   |
| During                the period, net of taxes                  |   |                              | (284,657   | )                                |   | 487,484 |   |   | (461,446 | ) |   | (62,263 | ) |
|                                                            |   |                              |       |                             |   |   |   |   |   |   |   |   |   |
| **Comprehensive                (loss) income**                  |   | **$**                             | **(3,946** | **)**                            | **$**  | **737,475** |   | **$** | **457,542** |   | **$** | **623,353** |   |
|                                                            |   |                              |       |                             |   |   |   |   |   |   |   |   |   |
|                                                            |   |                              |       |                             |   |   |   |   |   |   |   |   |   |

----

**PATRIOT      NATIONAL BANCORP, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS**

**(Unaudited)**

|                                                                                               |   | Nine                Months Ended |            |
|----------------------------------------------------------------------------------------------------|--------|----------------------------------|-----------------|
|                                                                                               |   | September                30,     |            |
|                                                                                               |   | 2005                             |            | 2004 |   |
|                                                                                               |   |                             |            |   |   |   |   |
| Cash                Flows from Operating Activities                                                |   |                             |            |   |   |   |   |
| Net                income                                                                          |   | $                                | 918,988         |   | $ | 685,616 |   |
| Adjustments                to reconcile net income to net cash                                     |   |                             |            |   |   |   |   |
| provided                by operating activities:                                                   |   |                             |            |   |   |   |   |
| Amortization                and accretion of investment premiums and discounts, net                |   |                             | 298,196         |   |   | 405,428 |   |
| Provision                for loan losses                                                           |   |                             | 710,000         |   |   | 455,000 |   |
| Depreciation                and amortization                                                       |   |                             | 441,327         |   |   | 406,093 |   |
| (Gain)                loss on disposal of premises and equipment                                   |   |                             | (12             | ) |   | 3,804 |   |
| Changes                in assets and liabilities:                                                  |   |                             |            |   |   |   |   |
| (Decrease)                increase in deferred loan fees                                           |   |                             | (86,946         | ) |   | 341,718 |   |
| Increase                in accrued interest receivable                                             |   |                             | (483,283        | ) |   | (211,182 | ) |
| Increase                in other assets                                                            |   |                             | (51,068         | ) |   | (16,321 | ) |
| Increase                (decrease) in accrued expenses and other liabilities                       |   |                             | 257,407         |   |   | (543,399 | ) |
| **Net                cash provided by operating activities**                                       |   |                             | **2,004,609**   |   |   | **1,526,757** |   |
| Cash                Flows from Investing Activities                                                |   |                             |            |   |   |   |   |
| Purchases                of available for sale securities                                          |   |                             | (28,208,360     | ) |   | (16,020,313 | ) |
| Principal                repayments on available for sale securities                               |   |                             | 16,282,227      |   |   | 18,501,889 |   |
| Proceeds                from maturities of available for sale securities                           |   |                             | 2,000,000       |   |   | 5,000,000 |   |
| Purchase                of Federal Home Loan Bank Stock                                            |   |                             | -               |   |   | (219,400 | ) |
| Purchase                of Federal Reserve Bank Stock                                              |   |                             | (600            | ) |   | (1,450 | ) |
| Net                increase in loans                                                               |   |                             | (77,737,980     | ) |   | (40,428,906 | ) |
| Purchases                of premises and equipment                                                 |   |                             | (748,767        | ) |   | (974,851 | ) |
| **Net                cash used in investing activities**                                           |   |                             | **(88,413,480** | **)** |   | **(34,143,031** | **)** |
| Cash                Flows from Financing Activities                                                |   |                             |            |   |   |   |   |
| Net                (decrease) increase in demand, savings and money market                deposits |   |                             | (5,742,167      | ) |   | 11,756,337 |   |
| Net                increase in time certificates of deposits                                       |   |                             | 48,505,111      |   |   | 29,263,523 |   |
| Proceeds                from FHLB borrowings                                                       |   |                             | 36,001,000      |   |   | 17,000,000 |   |
| Principal                repayments of FHLB borrowings                                             |   |                             | (40,001,000     | ) |   | (26,000,000 | ) |
| Decrease                in securities sold under agreements to repurchase                          |   |                             | -               |   |   | (5,700,000 | ) |
| Decrease                in other borrowings                                                        |   |                             | -               |   |   | (178,941 | ) |
| Dividends                paid on common stock                                                      |   |                             | (273,729        | ) |   | (230,431 | ) |
| Proceeds                from issuance of common stock                                              |   |                             | 11,345,671      |   |   | 466,704 |   |
| **Net                cash provided by financing activities**                                       |   |                             | **49,834,886**  |   |   | **26,377,192** |   |
| **Net                decrease in cash and cash equivalents**                                       |   |                             | **(36,573,985** | **)** |   | **(6,239,082** | **)** |
|                                                                                               |   |                             |            |   |   |   |   |
| Cash                and cash equivalents                                                           |   |                             |            |   |   |   |   |
| Beginning                                                                                          |   |                             | 55,630,466      |   |   | 29,454,671 |   |
| Ending                                                                                             |   | $                                | 19,056,481      |   | $ | 23,215,589 |   |
|                                                                                               |   |                             |            |   |   |   |   |
|                                                                                               |   |                             |            |   |   |   |   |

----

**PATRIOT      NATIONAL BANCORP, INC.**

**CONSOLIDATED      STATEMENTS OF CASH FLOWS, Continued**

**(Unaudited)**

|                                                                                  |   | Nine                Months Ended |      |
|---------------------------------------------------------------------------------------|--------|----------------------------------|-----------|
|                                                                                  |   | September                30,     |      |
|                                                                                  |   | 2005                             |      | 2004 |   |
|                                                                                  |   |                             |      |   |   |   |   |
| Supplemental                Disclosures of Cash Flow Information                      |   |                             |      |   |   |   |   |
| Cash                paid for:                                                         |   |                             |      |   |   |   |   |
| Interest                                                                              |   | $                                | 7,241,149 |   | $ | 5,032,840 |   |
| Income                Taxes                                                           |   | $                                | 780,921   |   | $ | 600,120 |   |
|                                                                                  |   |                             |      |   |   |   |   |
| Supplemental                disclosure of noncash investing and financing activities: |   |                             |      |   |   |   |   |
|                                                                                  |   |                             |      |   |   |   |   |
| Unrealized                holding loss on available for sale                          |   |                             |      |   |   |   |   |
| securities                arising during the period                                   |   | $                                | (744,270  | ) | $ | (100,425 | ) |
|                                                                                  |   |                             |      |   |   |   |   |
|                                                                                  |   |                             |      |   |   |   |   |
| Accrued                dividends declared on common stock                             |   | $                                | 129,171   |   | $ | 86,919 |   |
|                                                                                  |   |                             |      |   |   |   |   |

----

**PATRIOT      NATIONAL BANCORP, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)**

**Note      1.**
**Basis      of Financial Statement Presentation**

**Note      2.**
**Investments**

|                                               |   | September                30, |       | December                31, |   |
|----------------------------------------------------|--------|------------------------------|------------|-----------------------------|--------|
|                                               |   | 2005                         |       | 2004                        |   |
| U.                S. Government Agency and         |   |                         |       |                        |   |   |   |
| sponsored                agency obligations        |   | $                            | 16,553,112 |                        | $      | 14,823,295 |   |
| Mortgage-backed                securities          |   |                         | 61,600,030 |                        |   | 52,446,180 |   |
| Money                market preferred              |   |                         |       |                        |   |   |   |
| equity                securities                   |   |                         | 7,000,000  |                        |   | 9,000,000 |   |
| Total                Available for sale securities |   | $                            | 85,153,142 |                        | $      | 76,269,475 |   |

----

|                                        |   |      |       | Gross      |   | Gross      |   |   |       |
|---------------------------------------------|--------|-----------|------------|------------|--------|------------|--------|--------|------------|
|                                        |   | Amortized |       | Unrealized |   | Unrealized |   | Fair   |       |
|                                        |   | Cost      |       | Gains      |   | Losses     |   | Value  |       |
| U.S.                Government Agency and   |   |      |       |       |   |       |   |   |       |   |   |   |   |
| sponsored                agency obligations |   | $         | 16,999,000 |       | $      | -          |   | $      | (445,888   | ) | $ | 16,553,112 |   |
| Mortgage-backed                securities   |   |      | 62,532,667 |       |   | 45,753     |   |   | (978,390   | ) |   | 61,600,030 |   |
| Money                market preferred       |   |      |       |       |   |       |   |   |       |   |   |   |   |
| equity                securities            |   |      | 7,000,000  |       |   | -          |   |   | -          |   |   | 7,000,000 |   |
|                                        |   | $         | 86,531,667 |       | $      | 45,753     |   | $      | (1,424,278 | ) | $ | 85,153,142 |   |
|                                        |   |      |       |       |   |       |   |   |       |   |   |   |   |

**Note      3.**
**Loans**

|                                       |   | September                30, |        | December                31, |   |
|--------------------------------------------|--------|------------------------------|-------------|-----------------------------|--------|
|                                       |   | 2005                         |        | 2004                        |   |
| Real                Estate                 |   |                         |        |                        |   |   |   |
| Commercial                                 |   | $                            | 133,274,206 |                        | $      | 106,771,441 |   |
| Residential                                |   |                         | 75,649,591  |                        |   | 36,965,661 |   |
| Construction                               |   |                         | 88,168,915  |                        |   | 74,598,919 |   |
| Commercial                                 |   |                         | 14,523,883  |                        |   | 17,562,523 |   |
| Consumer                installment        |   |                         | 1,069,242   |                        |   | 1,386,709 |   |
| Consumer                home equity        |   |                         | 33,141,407  |                        |   | 30,874,894 |   |
| Total                Loans                 |   |                         | 345,827,244 |                        |   | 268,160,147 |   |
| Premiums                on purchased loans |   |                         | 384,637     |                        |   | 313,754 |   |
| Net                deferred fees           |   |                         | (1,030,610  | )                           |   | (1,117,556 | ) |
| Allowance                for loan losses   |   |                         | (4,191,525  | )                           |   | (3,481,525 | ) |
| Total                Loans                 |   | $                            | 340,989,746 |                        | $      | 263,874,820 |   |

----

**Note      4.**
**Deposits**

|                                                 |   | September                30, |        | December                31, |   |
|------------------------------------------------------|--------|------------------------------|-------------|-----------------------------|--------|
|                                                 |   | 2005                         |        | 2004                        |   |
|                                                 |   |                         |        |                        |   |   |   |
| Noninterest                bearing                   |   | $                            | 44,855,669  |                        | $      | 42,584,120 |   |
|                                                 |   |                         |        |                        |   |   |   |
| Interest                bearing                      |   |                         |        |                        |   |   |   |
| NOW                                                  |   |                         | 28,680,917  |                        |   | 26,814,653 |   |
| Savings                                              |   |                         | 21,180,401  |                        |   | 22,104,121 |   |
| Money                market                          |   |                         | 63,494,403  |                        |   | 72,450,663 |   |
| Time                certificates, less than $100,000 |   |                         | 161,364,347 |                        |   | 131,764,662 |   |
| Time                certificates, $100,000 or more   |   |                         | 90,192,532  |                        |   | 71,287,106 |   |
| Total                interest bearing                |   |                         | 364,912,600 |                        |   | 324,421,205 |   |
| Total                Deposits                        |   | $                            | 409,768,269 |                        | $      | 367,005,325 |   |

**Note      5.**
**Borrowings**

**Note      6.**
**Income      per share**

----

|                                                          |   | Net                Income |                            | Shares |   | Amount    |   |
|---------------------------------------------------------------|--------|---------------------------|---------------------------------|--------|--------|-----------|--------|
| Basic                Income Per Share                         |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   | $                         | 280,711                         |   |   | 2,573,139 |   | $ | 0.11 |   |
| Effect                of Dilutive Securities                  |   |                      |                            |   |   |      |   |   |   |   |
| Warrants/Stock                Options outstanding             |   |                      | -                               |   |   | 34,033    |   |   | - |   |
| Diluted                Income Per Share                       |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   |                      |                            |   |   |      |   |   |   |   |
| plus                assumed conversions                       |   | $                         | 280,711                         |   |   | 2,607,172 |   | $ | 0.11 |   |
|                                                          |   |                      |                            |   |   |      |   |   |   |   |
| Quarter                ended September 30, 2004               |
|                                                          |   |                      |                            |   |   |      |   |   |   |   |
|                                                          |   |                      | Net                Income  |   |   | Shares    |   |   | Amount |   |
| Basic                Income Per Share                         |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   | $                         | 249,991                         |   |   | 2,469,562 |   | $ | 0.10 |   |
| Effect                of Dilutive Securities                  |   |                      |                            |   |   |      |   |   |   |   |
| Warrants/Stock                Options outstanding             |   |                      | -                               |   |   | 31,658    |   |   | - |   |
| Diluted                Income Per Share                       |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   |                      |                            |   |   |      |   |   |   |   |
| plus                assumed conversions                       |   | $                         | 249,991                         |   |   | 2,501,220 |   | $ | 0.10 |   |
|                                                          |   |                      |                            |   |   |      |   |   |   |   |
|                                                          |   |                      |                            |   |   |      |   |   |   |   |
| Nine                months ended September 30, 2005 |
|                                                          |   |                      |                            |   |   |      |   |   |   |   |
|                                                               |   |                      | Net                Income  |   |   | Shares    |   |   | Amount |   |
| Basic                Income Per Share                         |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   | $                         | 918,988                         |   |   | 2,516,856 |   | $ | 0.37 |   |
| Effect                of Dilutive Securities                  |   |                      |                            |   |   |      |   |   |   |   |
| Warrants/Stock                Options outstanding             |   |                      | -                               |   |   | 43,935    |   |   | (0.01 | ) |
| Diluted                Income Per Share                       |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   |                      |                            |   |   |      |   |   |   |   |
| plus                assumed conversions                       |   | $                         | 918,988                         |   |   | 2,560,791 |   | $ | 0.36 |   |
|                                                          |   |                      |                            |   |   |      |   |   |   |   |
| Nine                months ended September 30, 2004 |
|                                                          |   |                      |                            |   |   |      |   |   |   |   |
|                                                          |   |                      | Net                Income  |   |   | Shares    |   |   | Amount |   |
| Basic                Income Per Share                         |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   | $                         | 685,616                         |   |   | 2,437,353 |   | $ | 0.28 |   |
| Effect                of Dilutive Securities                  |   |                      |                            |   |   |      |   |   |   |   |
| Warrants/Stock                Options outstanding             |   |                      | -                               |   |   | 57,971    |   |   | (0.01 | ) |
| Diluted                Income Per Share                       |   |                      |                            |   |   |      |   |   |   |   |
| Income                available to common shareholders        |   |                      |                            |   |   |      |   |   |   |   |
| plus                assumed conversions                       |   | $                         | 685,616                         |   |   | 2,495,324 |   | $ | 0.27 |   |

----

**Note      7.**
**Other      Comprehensive Income**

|                                             |   | Three                Months Ended       |                              | Nine                Months Ended  |   |
|--------------------------------------------------|--------|-----------------------------------------|-----------------------------------|-----------------------------------|--------|
|                                             |   | September 30, 2005            |                              | September                30, 2005 |   |
|                                             |   | Before                Tax               |                              | Tax                               |   | Net                of Tax |   | Before                Tax |   | Tax |   | Net                of Tax |   |
|                                             |   | Amount                                  |                              | Effect                            |   | Amount |   | Amount |   | Effect |   | Amount |   |
| Unrealized                holding loss           |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| arising                during the period         |   | $                                       | (459,125                          | )                                 | $      | 174,468 |   | $ | (284,657 | ) | $ | (744,270 | ) | $ | 282,824 |   | $ | (461,446 | ) |
|                                             |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification                adjustment       |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                gains recognized in income    |   |                                    | -                                 |                              |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                             |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                holding loss on        |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| available                for sale securities,    |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net                of taxes                      |   | $                                       | (459,125                          | )                                 | $      | 174,468 |   | $ | (284,657 | ) | $ | (744,270 | ) | $ | 282,824 |   | $ | (461,446 | ) |
|                                             |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                             |   | Three                Months Ended  | Nine                Months Ended  |
|                                             |   | September                30, 2004  | September                30, 2004 |
|                                                  |   |                                    | Before                Tax    |                              |   | Tax |   |   | Net                of Tax |   |   | Before                Tax |   |   | Tax |   |   | Net                of Tax |   |
|                                                  |   |                                    | Amount                       |                              |   | Effect |   |   | Amount |   |   | Amount |   |   | Effect |   |   | Amount |   |
|                                             |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gain (loss)    |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| arising                during the period         |   | $                                       | 786,265                           |                              | $      | (298,781 | ) | $ | 487,484 |   | $ | (100,425 | ) | $ | 38,162 |   | $ | (62,263 | ) |
|                                             |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification                adjustment       |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for                gains recognized in income    |   |                                    | -                                 |                              |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                             |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized                holding gain (loss)    |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| on                available for sale securities, |   |                                    |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| net                of taxes                      |   | $                                       | 786,265                           |                              | $      | (298,781 | ) | $ | 487,484 |   | $ | (100,425 | ) | $ | 38,162 |   | $ | (62,263 | ) |

**Note      8.**
**Segment      Reporting**

----

|                                                |   |   |             |   |   |  Mortgage  |   |   | Consolidated |   |
|-----------------------------------------------------|--------|--------|------------------|--------|--------|-----------------|--------|--------|--------------|--------|
|                                                |   |   |  Bank       |   |   | Broker          |   |   | Totals       |   |
|                                                |   |   |             |   |   |            |   |   |         |   |
| Net                interest income                  |   | $      | 3,706            |   | $      | -               |   | $      | 3,706        |   |
| Noninterest                income                   |   |   | 56               |   |   | 930             |   |   | 986          |   |
| Noninterest                expense                  |   |   | 2,950            |   |   | 920             |   |   | 3,870        |   |
| Provision                for loan losses            |   |   | 350              |   |   | -               |   |   | 350          |   |
| Income                before taxes                  |   |   | 462              |   |   | 10              |   |   | 472          |   |
| Assets                at period end                 |   |   | 454,533          |   |   | 1,064           |   |   | 455,597      |   |
|                                                |   |   |             |   |   |            |   |   |         |   |
| Quarter                ended September 30, 2004     |
|                                                |   |   |             |   |   | Mortgage   |   |   | Consolidated |   |
|                                                |   |   | Bank        |   |   | Broker          |   |   | Totals       |   |
|                                                |   |   |             |   |   |            |   |   |         |   |
| Net                interest income                  |   | $      | 3,094            |   | $      | -               |   | $      | 3,094        |   |
| Noninterest                income                   |   |   | 166              |   |   | 450             |   |   | 616          |   |
| Noninterest                expense                  |   |   | 2,540            |   |   | 516             |   |   | 3,056        |   |
| Provision                for loan losses            |   |   | 235              |   |   | -               |   |   | 235          |   |
| Income                (loss) before taxes           |   |   | 485              |   |   | (66             | )      |   | 419          |   |
| Assets                at period end                 |   |   | 367,823          |   |   | 1,103           |   |   | 368,926      |   |
|                                                |   |   |             |   |   |            |   |   |         |   |
| Nine                months ended September 30, 2005 |
|                                                |   |   |             |   |   |  Mortagage |   |   | Consolidated |   |
|                                                |   |   |   Bank |   |   | Broker          |   |   | Totals       |   |
|                                                |   |   |             |   |   |            |   |   |         |   |
| Net                interest income                  |   | $      | 10,615           |   | $      | -               |   | $      | 10,615       |   |
| Noninterest                income                   |   |   | 374              |   |   | 2,143           |   |   | 2,517        |   |
| Noninterest                expense                  |   |   | 8,652            |   |   | 2,226           |   |   | 10,878       |   |
| Provision                for loan losses            |   |   | 710              |   |   | -               |   |   | 710          |   |
| Income                (loss) before taxes           |   |   | 1,627            |   |   | (84             | )      |   | 1,543        |   |
| Assets                at period end                 |   |   | 454,533          |   |   | 1,064           |   |   | 455,597      |   |
|                                                |   |   |             |   |   |            |   |   |         |   |
| Nine                months ended September 30, 2004 |
|                                                |   |   |             |   |   |  Mortagage |   |   | Consolidated |   |
|                                                |   |   |   Bank |   |   | Broker          |   |   | Totals       |   |
|                                                |   |   |             |   |   |            |   |   |         |   |
| Net                interest income                  |   | $      | 8,459            |   | $      | -               |   | $      | 8,459        |   |
| Noninterest                income                   |   |   | 494              |   |   | 1,649           |   |   | 2,143        |   |
| Noninterest                expense                  |   |   | 7,201            |   |   | 1,790           |   |   | 8,991        |   |
| Provision                for loan losses            |   |   | 455              |   |   | -               |   |   | 455          |   |
| Income                (loss) before taxes           |   |   | 1,297            |   |   | (141            | )      |   | 1,156        |   |
| Assets                at period end                 |   |   | 367,823          |   |   | 1,103           |   |   | 368,926      |   |

----

**Note      9.**
**Financial      Instruments with Off-Balance Sheet Risk**

| Commitments                to extend credit:       |   |   |        |
|----------------------------------------------------|--------|--------|-------------|
| Future                loan commitments             |   | $      | 39,891,311  |   |
| Unused                lines of credit              |   |   | 39,309,660  |   |
| Undisbursed                construction loans      |   |   | 36,680,115  |   |
| Financial                standby letters of credit |   |   | 216,000     |   |
|                                               |   | $      | 116,097,086 |   |

----

**Item      2.    **
**Management's      Discussion and Analysis or Plan of Operation**

| (a) | *Plan                of Operation* |
|-----|------------------------------------|

| (b)    | *Management's                Discussion and Analysis of*                      |
|--------|-------------------------------------------------------------------------------|
|   | *Financial                Condition and Results of                Operations* |

**SUMMARY**

**FINANCIAL      CONDITION**

***Assets***

----

***Investments***

***Loans***

***Critical      Accounting Policies***

----

***Allowance      for Loan Losses***

----

**Analysis      of Allowance for Loan Losses**

|                                                 |   | September                30, |   |
|------------------------------------------------------|--------|------------------------------|--------|
| *(Thousands                of dollars)*              |   | 2005                         |   | 2004 |   |
| Balance                at beginning of period        |   | $                            | 3,481  |   | $ | 2,935 |   |
| Charge-offs                                          |   |                         | -      |   |   | (8 | ) |
| Recoveries                                           |   |                         | -      |   |   | - |   |
| Net                (charge-offs) recoveries          |   |                         | -      |   |   | (8 | ) |
| Provision                charged to operations       |   |                         | 710    |   |   | 455 |   |
| Balance                at end of period              |   | $                            | 4,191  |   | $ | 3,382 |   |
| Ratio                of net (charge-offs) recoveries |   |                         |   |   |   |   |   |
| during                the period to average loans    |   |                         |   |   |   |   |   |
| outstanding                during the period.        |   |                         | (0.00  | %) |   | (0.00 | %) |

***Non-Accrual,      Past Due and Restructured Loans***

|                                    |   | September                30, |   | December                31, |   |
|-----------------------------------------|--------|------------------------------|--------|-----------------------------|--------|
| *(Thousands                of dollars)* |   |  2005                   |   |  2004                  |   |
| Loans                delinquent over 90 |   |                         |   |                        |   |   |   |
| days                still accruing      |   | $                            | 1,831  |                        | $      | 373 |   |
| Non-accruing                loans       |   |                         | 1,991  |                        |   | 3,669 |   |
| Total                                   |   | $                            | 3,822  |                        | $      | 4,042 |   |
| %                of Total Loans         |   |                         | 1.11   | %                           |   | 1.51 | % |
| %                of Total Assets        |   |                         | 0.84   | %                           |   | 1.00 | % |

***Potential      Problem Loans***

----

.

***Deposits***

***Borrowings***

***Capital***

***Off-Balance      Sheet Arrangements***

----

**Results      of Operations**

***Interest      and dividend income and expense***

|                                         |   | Three                months ended September 30, |    |
|----------------------------------------------|--------|-------------------------------------------------|---------|
|                                         |   |                                            |    | 2005 |   |   |   |   |   | 2004 |   |   |   |
|                                         |   |                                            |    | Interest |   |   |   |   |   | Interest |   |   |   |
|                                         |   | Average                                         |    | Income/ |   | Average |   | Average |   | Income/ |   | Average |   |
|                                         |   | Balance                                         |    | Expense |   | Rate |   | Balance |   | Expense |   | Rate |   |
|                                         |   | *(dollars                in thousands)*         |    |
| Interest                earning assets:      |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                        |   | $                                               | 321,931 |   | $ | 5,536 |   |   | 6.88 | % | $ | 243,299 |   | $ | 4,107 |   |   | 6.76 | % |
| Federal                funds sold and        |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other                cash equivalents        |   |                                            | 17,199  |   |   | 142 |   |   | 3.30 | % |   | 16,499 |   |   | 56 |   |   | 1.36 | % |
| Investments                                  |   |                                            | 86,832  |   |   | 761 |   |   | 3.51 | % |   | 89,233 |   |   | 692 |   |   | 3.10 | % |
| Total                interest                |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets                |   |                                            | 425,962 |   |   | 6,439 |   |   | 6.05 | % |   | 349,031 |   |   | 4,855 |   |   | 5.56 | % |
|                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and due from banks       |   |                                            | 5,280   |   |   |   |   |   |   |   |   | 4,520 |   |   |   |   |   |   |   |
| Premises                and equipment, net   |   |                                            | 2,282   |   |   |   |   |   |   |   |   | 1,747 |   |   |   |   |   |   |   |
| Allowance                for loan losses     |   |                                            | (3,954  | ) |   |   |   |   |   |   |   | (3,213 | ) |   |   |   |   |   |   |
| Other                assets                  |   |                                            | 5,783   |   |   |   |   |   |   |   |   | 5,169 |   |   |   |   |   |   |   |
| Total                Assets                  |   | $                                               | 435,353 |   |   |   |   |   |   |   | $ | 357,254 |   |   |   |   |   |   |   |
|                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                bearing liabilities: |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                     |   | $                                               | 350,262 |   | $ | 2,515 |   |   | 2.87 | % | $ | 273,255 |   | $ | 1,564 |   |   | 2.29 | % |
| FHLB                advances                 |   |                                            | 8,783   |   |   | 80 |   |   | 3.64 | % |   | 14,836 |   |   | 96 |   |   | 2.59 | % |
| Subordinated                debt             |   |                                            | 8,248   |   |   | 137 |   |   | 6.64 | % |   | 8,248 |   |   | 98 |   |   | 4.75 | % |
| Other                borrowings              |   |                                            | 134     |   |   | 1 |   |   | 2.99 | % |   | 197 |   |   | 3 |   |   | 6.09 | % |
| Total                interest                |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| bearing                liabilities           |   |                                            | 367,427 |   |   | 2,733 |   |   | 2.98 | % |   | 296,536 |   |   | 1,761 |   |   | 2.38 | % |
|                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                deposits               |   |                                            | 42,515  |   |   |   |   |   |   |   |   | 38,721 |   |   |   |   |   |   |   |
| Accrued                expenses and          |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other                liabilities             |   |                                            | 3,652   |   |   |   |   |   |   |   |   | 2,482 |   |   |   |   |   |   |   |
| Shareholders’equity                    |   |                                            | 21,759  |   |   |   |   |   |   |   |   | 19,515 |   |   |   |   |   |   |   |
| Total                liabilities and equity  |   |                                            | 435,353 |   |   |   |   |   |   |   |   | 357,254 |   |   |   |   |   |   |   |
|                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income           |   |                                            |    |   | $ | 3,706 |   |   |   |   |   |   |   | $ | 3,094 |   |   |   |   |
| Interest                margin               |   |                                            |    |   |   |   |   |   | 3.48 | % |   |   |   |   |   |   |   | 3.55 | % |
| Interest                spread               |   |                                            |    |   |   |   |   |   | 3.07 | % |   |   |   |   |   |   |   | 3.18 | % |
|                                         |   |                                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                         |   | Nine                months ended September 30, |    |
|----------------------------------------------|--------|------------------------------------------------|---------|
|                                         |   |                                           |    | 2005 |   |   |   |   |   | 2004 |   |   |   |
|                                         |   |                                           |    | Interest |   |   |   |   |   | Interest |   |   |   |
|                                         |   | Average                                        |    | Income/ |   | Average |   | Average |   | Income/ |   | Average |   |
|                                         |   | Balance                                        |    | Expense |   | Rate |   | Balance |   | Expense |   | Rate |   |
|                                         |   | *(dollars                in thousands)*        |    |
| Interest                earning assets:      |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                        |   | $                                              | 302,134 |   | $ | 15,129 |   |   | 6.68 | % | $ | 231,587 |   | $ | 11,237 |   |   | 6.47 | % |
| Federal                funds sold and        |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other                cash equivalents        |   |                                           | 18,717  |   |   | 383 |   |   | 2.73 | % |   | 17,844 |   |   | 146 |   |   | 1.09 | % |
| Investments                                  |   |                                           | 89,051  |   |   | 2,331 |   |   | 3.49 | % |   | 91,427 |   |   | 2,091 |   |   | 3.05 | % |
| Total                interest                |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets                |   |                                           | 409,902 |   |   | 17,843 |   |   | 5.80 | % |   | 340,858 |   |   | 13,474 |   |   | 5.27 | % |
|                                         |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash                and due from banks       |   |                                           | 4,933   |   |   |   |   |   |   |   |   | 3,959 |   |   |   |   |   |   |   |
| Premises                and equipment, net   |   |                                           | 2,133   |   |   |   |   |   |   |   |   | 1,532 |   |   |   |   |   |   |   |
| Allowance                for loan losses     |   |                                           | (3,767  | ) |   |   |   |   |   |   |   | (3,112 | ) |   |   |   |   |   |   |
| Other                assets                  |   |                                           | 5,594   |   |   |   |   |   |   |   |   | 4,985 |   |   |   |   |   |   |   |
| Total                Assets                  |   | $                                              | 418,795 |   |   |   |   |   |   |   | $ | 348,222 |   |   |   |   |   |   |   |
|                                         |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                bearing liabilities: |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                     |   | $                                              | 332,728 |   | $ | 6,543 |   |   | 2.62 | % | $ | 263,639 |   | $ | 4,401 |   |   | 2.23 | % |
| FHLB                advances                 |   |                                           | 11,634  |   |   | 304 |   |   | 3.48 | % |   | 16,277 |   |   | 299 |   |   | 2.45 | % |
| Subordinated                debt             |   |                                           | 8,248   |   |   | 380 |   |   | 6.14 | % |   | 8,248 |   |   | 274 |   |   | 4.43 | % |
| Other                borrowings              |   |                                           | 45      |   |   | 1 |   |   | 2.96 | % |   | 3,255 |   |   | 41 |   |   | 1.68 | % |
| Total                interest                |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| bearing                liabilities           |   |                                           | 352,655 |   |   | 7,228 |   |   | 2.73 | % |   | 291,419 |   |   | 5,015 |   |   | 2.29 | % |
|                                         |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand                deposits               |   |                                           | 42,286  |   |   |   |   |   |   |   |   | 35,065 |   |   |   |   |   |   |   |
| Accrued                expenses and          |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other                liabilities             |   |                                           | 3,207   |   |   |   |   |   |   |   |   | 2,370 |   |   |   |   |   |   |   |
| Shareholders’equity                    |   |                                           | 20,647  |   |   |   |   |   |   |   |   | 19,368 |   |   |   |   |   |   |   |
| Total                liabilities and equity  |   |                                           | 418,795 |   |   |   |   |   |   |   |   | 348,222 |   |   |   |   |   |   |   |
|                                         |   |                                           |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income           |   |                                           |    |   | $ | 10,615 |   |   |   |   |   |   |   | $ | 8,459 |   |   |   |   |
| Interest                margin               |   |                                           |    |   |   |   |   |   | 3.45 | % |   |   |   |   |   |   |   | 3.31 | % |
| Interest                spread               |   |                                           |    |   |   |   |   |   | 3.07 | % |   |   |   |   |   |   |   | 2.98 | % |

----

|                                         |   | Three                months ended September 30,                                                                     |   | Nine                Months Ended September 30,                                                                      |   |
|----------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------|--------|
|                                         |   | 2005                vs. 2004Fluctuations                in InterestInterest/ExpenseDue                to Change in: |   | 2005                vs. 2004Fluctuations                in InterestInterest/ExpenseDue                to Change in: |   |
|                                         |   |
|                                         |   |
|                                         |   |
|                                         |   | Volume                                                                                                              |   | Rate                                                                                                                |   | Total |   | Volume |   | Rate |   | Total |   |
|                                         |   | *(dollars                in thousands)*                                                                             |   |
| Interest                earning assets:      |   |                                                                                                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                        |   |                                                                                                                | 1,355  |                                                                                                                |   | 74 |   |   | 1,429 |   |   | 3,512 |   |   | 380 |   |   | 3,892 |   |
| Federal                funds sold and        |   |                                                                                                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| other                cash equivalents        |   |                                                                                                                | 3      |                                                                                                                |   | 83 |   |   | 86 |   |   | 8 |   |   | 229 |   |   | 237 |   |
| Investments                                  |   |                                                                                                                | (37    | )                                                                                                                   |   | 106 |   |   | 69 |   |   | (58 | ) |   | 298 |   |   | 240 |   |
| Total                interest                |   |                                                                                                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earning                assets                |   |                                                                                                                | 1,321  |                                                                                                                |   | 263 |   |   | 1,584 |   |   | 3,462 |   |   | 907 |   |   | 4,369 |   |
|                                         |   |                                                                                                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest                bearing liabilities: |   |                                                                                                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                     |   |                                                                                                                | 500    |                                                                                                                |   | 451 |   |   | 951 |   |   | 1,275 |   |   | 867 |   |   | 2,142 |   |
| FHLB                advances                 |   |                                                                                                                | (149   | )                                                                                                                   |   | 133 |   |   | (16 | ) |   | (94 | ) |   | 99 |   |   | 5 |   |
| Subordinated                debt             |   |                                                                                                                | -      |                                                                                                                |   | 39 |   |   | 39 |   |   | - |   |   | 106 |   |   | 106 |   |
| Other                borrowings              |   |                                                                                                                | (1     | )                                                                                                                   |   | (1 | ) |   | (2 | ) |   | (38 | ) |   | (2 | ) |   | (40 | ) |
| Total                interest                |   |                                                                                                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| bearing                liabilities           |   |                                                                                                                | 350    |                                                                                                                |   | 622 |   |   | 972 |   |   | 1,143 |   |   | 1,070 |   |   | 2,213 |   |
|                                         |   |                                                                                                                |   |                                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income           |   |                                                                                                                | 971    |                                                                                                                |   | (359 | ) |   | 612 |   |   | 2,319 |   |   | (163 | ) |   | 2,156 |   |

----

***Provision      for loan losses***

***Noninterest      income***

***Noninterest      expenses***

----

***Income      Taxes***

**LIQUIDITY**

----

**CAPITAL**

|                                     |   | September                30, 2005 |   | December                31, 2004 |   |
|------------------------------------------|--------|----------------------------------------|--------|----------------------------------|--------|
| Total                Risk-based Capital  |   |                                   | 13.40  | %                                |   | 10.70 | % |
| Tier                1 Risk-based Capital |   |                                   | 12.15  | %                                |   | 9.04 | % |
| Leverage                Capital          |   |                                   | 9.01   | %                                |   | 6.79 | % |

|                                     |   | September                30, 2005 |   | December                31, 2004 |   |
|------------------------------------------|--------|----------------------------------------|--------|----------------------------------|--------|
| Total                Risk-based Capital  |   |                                   | 13.19  | %                                |   | 10.50 | % |
| Tier                1 Risk-based Capital |   |                                   | 11.94  | %                                |   | 9.29 | % |
| Leverage                Capital          |   |                                   | 8.84   | %                                |   | 6.98 | % |

**IMPACT      OF INFLATION AND CHANGING PRICES**

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**"SAFE      HARBOR" STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF      1995**

**Item      3.**
**Controls      and Procedures**

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----

**PART      II - OTHER INFORMATION**

| **Item                2.** |   | **Unregistered                sales of Equity Securities and Use of Proceeds**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|----------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                       | (a)    | During                the three months ended September 30, 2005, Bancorp issued 34,000                shares of                its Common Stock upon the exercise of certain options that were granted                in                connection with a stock option plan adopted by the Bank in 1999 under                which non-qualified and incentive stock options were granted in 1999                to                certain employee directors and directors. The weighted average exercise                price of these options is $10.13. The obligations under these options                were                assumed by Bancorp at the time the Bank became a wholly owned subsidiary                of Bancorp. |
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                       |   | The                total amount received by Bancorp for these shares was $345,105.84.                No                underwriter was used in connection with the sale of these 34,000                shares                nor were any underwriting discounts or commissions paid. The shares                are                unregistered under the Securities Act of 1933, and were issued pursuant                to                the private offering exemption under Section 4 (2) of such                Act.                                                                                                                                                                                                             |
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                       | (b)    | Not                applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                       | (c)    | Not                applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|                       |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|                       | (d)    | Not                applicable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |

| **Item                  6.** | **Exhibits**  |                                                                                                                                                                                                                                                                                                                                                                                                 |
|------------------------------|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         | No.                | Description                                                                                                                                                                                                                                                                                                                                                                                          |
|                         |               |                                                                                                                                                                                                                                                                                                                                                                                                 |
|                         | 3(i)               | Certificate                  of Incorporation of Bancorp, (incorporated by reference to Exhibit                  3(i) to                  Bancorp’s Current Report on Form 8-K dated December 1, 1999                  (Commission File No. 000-29599)).                                                                                                                                  |
|                         |               |                                                                                                                                                                                                                                                                                                                                                                                                 |
|                         | 3(i)(A)            | Certificate                  of Amendment of Certificate of Incorporation of Patriot National                  Bancorp,                  Inc. dated July 16, 2004 (incorporated by reference to Exhibit                  3(i)(A) to                  Bancorp's Annual Report on Form 10-KSB for the year ended December                  31,                  2004 (Commission File No. 000-29599)). |
|                         |               |                                                                                                                                                                                                                                                                                                                                                                                                 |
|                         | 3(ii)              | By-laws                  of Bancorp (incorporated by reference to Exhibit 3(ii) to Bancorp’s                  Current Report on Form 8-K dated December 1, 1999 (Commission File                  No.                  000-29599)).                                                                                                                                                            |
|                         |               |                                                                                                                                                                                                                                                                                                                                                                                                 |
|                         |               |                                                                                                                                                                                                                                                                                                                                                                                                 |
|                         |               |                                                                                                                                                                                                                                                                                                                                                                                                 |

----

|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|--------|----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | No.      | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 4        | Reference                    is made to the Rights Agreement dated April 19, 2004 by and between                    Patriot National Bancorp, Inc. and Registrar and Transfer Company                    filed as                    Exhibit 99.2 to Bancorp’s Report on Form 8-K filed on April 19, 2004,                    which is incorporated herein by reference.                                                                                   |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(1) | 2001                    Stock Appreciation Rights Plan of Bancorp (incorporated by reference                    to                    Exhibit10(a)(1) to Bancorp’s Annual Report on Form 10-KSB for the year                    ended December 31, 2001 (Commission File No.                    000-29599)).                                                                                                                                     |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(3) | Employment                    Agreement, dated as of October 23, 2000, as amended by a First                    Amendment,                    dated as of March 21, 2001, among the Bank, Bancorp and Charles F.                    Howell (incorporated by reference to Exhibit 10(a)(4) to Bancorp’s Annual                    Report on Form 10-KSB for the year ended December 31, 2000 (Commission                    File No. 000-29599)). |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(4) | Change                    of Control Agreement, dated as of May 1, 2001 between Martin                    G. Noble and                    Patriot National Bank (incorporated by reference to Exhibit 10(a)(4)                    to                    Bancorp’s Annual Report on Form 10-KSB for the year ended December                    31, 2004 (Commission File No. 000-29599)) .                                                             |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(5) | Employment                    Agreement dated as of November 3, 2003 among Patriot National                    Bank,                    Bancorp and Robert F. O’Connell (incorporated by reference to Exhibit                    10(a)(5) to Bancorp’s Annual Report on Form 10-KSB for the year ended                    December 31, 2003 (Commission File No.                    000-29599)).                                                |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(6) | Change                    of Control Agreement, dated as of November 3, 2003 between                    Robert F. O’Connell and Patriot National Bank (incorporated by                    reference to Exhibit 10(a)(6) to Bancorp’s Annual Report on Form 10-KSB                    for the year ended December 31, 2003 (Commission File                    No.                    000-29599)).                                     |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(8) | Employment                    Agreement dated as of January 1, 2005 between Patriot National                    Bank and                    Marcus Zavattaro (incorporated by reference to Exhibit 10(a)(8)                    to                    Bancorp’s Annual Report on Form 10-KSB for the year ended December                    31, 2004 (Commission File No. 000-29599)).                                                                 |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
|   |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                             |

----

|   | No.       | Description                                                                                                                                                                                                                                                                                                                                                                                                           |
|--------|-----------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 10(c)     | 1999                    Stock Option Plan of the Bank (incorporated by reference to Exhibit                    10(c)                    to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission                    File No. 000-29599)).                                                                                                                                                     |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 10(a)(9)  | License                    agreement dated July 1, 2003 between Patriot National                    Bank and                    L. Morris Glucksman (incorporated by reference to Exhibit                    10(a)(9) to                    Bancorp’s Annual Report on Form 10-KSB for the year ended December 31,                    2003 (Commission File No. 000-29599)).                     |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 10(a)(10) | Employment                    Agreement dated as of October 23, 2003 among the Bank, Bancorp                    and Charles                    F. Howell (incorporated by reference to Exhibit 10(a)(10) to                    Bancorp’s                    Annual Report on Form 10-KSB for the year ended                    December 31, 2003 (Commission File No.                    000-29599)). |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 31(1)     | Rule                    13a-14(a)/15d-14(a) Certification of Chief Executive                    Officer                                                                                                                                                                                                                                                                                                               |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 31(2)     | Rule                    13a-14(a)/15d-14(a) Certification of Chief Financial                    Officer                                                                                                                                                                                                                                                                                                               |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | 32        | Section                    1350 Certifications                                                                                                                                                                                                                                                                                                                                                                        |
|   |      |                                                                                                                                                                                                                                                                                                                                                                                                                  |

----

**SIGNATURES**

| PATRIOT                NATIONAL BANCORP, INC.                         |   |
|-----------------------------------------------------------------------|--------|
| (Registrant)                                                          |   |
|                                                                  |   |
|                                                                  |   |
| By:                 /s/                Robert F. O’Connell |   |
| Robert                F. O’Connell,                             |   |
| Senior                Executive Vice President                        |   |
| Chief                Financial Officer                                |   |
|                                                                  |   |
| (On                behalf of the registrant and as                    |   |
| chief                financial officer)                               |   |

----