----

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

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

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

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

----

|          |                                                            | Page   |
|---------------|-----------------------------------------------------------------|--------|
|          |                                                            |   |
| Part      I   | FINANCIAL      INFORMATION                                      |   |
|          |                                                            |   |
| Item      1.  | Consolidated      Financial Statements                          | 3      |
|          |                                                            |   |
| Item      2.  | Management’s      Discussion and Analysis of              |   |
|          | Financial      Condition and Results of Operations              | 29     |
|          |                                                            |   |
| Item      3.  | Quantitative      and Qualitative Disclosures about Market Risk | 50     |
|          |                                                            |   |
| Item      4.  | Controls      and Procedures                                    | 53     |
|          |                                                            |   |
|          |                                                            |   |
| Part      II  | OTHER      INFORMATION                                          |   |
|          |                                                            |   |
| Item      1.  | Legal      Proceedings                                          | 53     |
|          |                                                            |   |
| Item      1A. | Risk      Factors                                               | 55     |
|          |                                                            |   |
| Item      6.  | Exhibits                                                        | 55     |

----

|                                                                                                                                      | September      30, 2009                                                                                                                                                                                 |   | December      31, 2008                                                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                      | (Unaudited)                                                                                                                                                                                             |   |                                                                                                                                                                                                    |
| ASSETS                                                                                                                                    |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Cash      and due from banks:                                                                                                             |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|    Noninterest      bearing deposits and cash                                                                              |  $               2,469,273                                                                                              |   |  $               3,045,708                                                                                              |
|    Interest      bearing deposits                                                                                          |               150,522,285                                                                                                         |   |                   1,240,525                                                                                   |
| Federal      funds sold                                                                                                                   |                               -    |   |                 20,000,000                                                                                              |
| Short      term investments                                                                                                               |                      203,376                                                                   |   |                      316,518                                                                   |
|      Cash      and cash equivalents                                                                              |               153,194,934                                                                                                         |   |                 24,602,751                                                                                              |
|                                                                                                                                      |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Available      for sale securities (at fair value)                                                                                        |                 31,917,772                                                                                              |   |                 51,979,677                                                                                              |
| Federal      Reserve Bank stock                                                                                                           |                   1,914,700                                                                                   |   |                   1,913,200                                                                                   |
| Federal      Home Loan Bank stock                                                                                                         |                   4,508,300                                                                                   |   |                   4,508,300                                                                                   |
| Loans      receivable (net of allowance for loan losses:  2009      $17,651,755;                                                |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|      2008      $16,247,070)                                                                                      |               702,307,916                                                                                                         |   |               788,568,687                                                                                                         |
| Accrued      interest and dividends receivable                                                                                            |                   3,486,111                                                                                   |   |                   4,556,755                                                                                   |
| Premises      and equipment, net                                                                                                          |                   6,999,528                                                                                   |   |                   7,948,501                                                                                   |
| Deferred      tax asset, net                                                                                                              |                               -    |   |                   8,680,075                                                                                   |
| Intangible      assets                                                                                                                    |                        73,305                                                        |   |                        85,896                                                        |
| Cash      surrender value of life insurance                                                                                               |                 19,694,365                                                                                              |   |                 19,135,105                                                                                              |
| Other      real estate owned                                                                                                              |                   7,715,600                                                                                   |   |                               -    |
| Other      assets                                                                                                                         |                   5,625,248                                                                                   |   |                   1,380,031                                                                                   |
|           Total      assets                                                             |  $              937,437,779                                                                                                                                |   |  $              913,358,978                                                                                                                                     |
|                                                                                                                                      |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| LIABILITIES      AND SHAREHOLDERS' EQUITY                                                                                                 |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Liabilities                                                                                                                               |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|      Deposits:                                                                                                   |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|           Noninterest      bearing deposits                                             |  $             48,053,616                                                                                                         |   |  $             50,194,400                                                                                                         |
|           Interest      bearing deposits                                                |               780,999,316                                                                                                         |   |               734,626,951                                                                                                         |
|                Total      deposits                             |            829,052,932                                                                                                                           |   |            784,821,351                                                                                                                           |
|      Repurchase      agreements                                                                                  |                   7,000,000                                                                                   |   |                   7,000,000                                                                                   |
|      Federal      Home Loan Bank borrowings                                                                      |                 50,000,000                                                                                              |   |                 50,000,000                                                                                              |
|      Junior      subordinated debt owed to unconsolidated trust                                                  |                   8,248,000                                                                                   |   |                   8,248,000                                                                                   |
|      Accrued      expenses and other liabilities                                                                 |                   3,482,453                                                                                   |   |                   4,515,483                                                                                   |
|                Total      liabilities                          |            897,783,385                                                                                                                           |   |            854,584,834                                                                                                                           |
|                                                                                                                                      |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
| Shareholders'      equity                                                                                                                 |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|      Preferred      stock:  1,000,000 shares authorized; no shares      issued                         |                               -    |   |                               -    |
|      Common      stock, $2 par value: 60,000,000 shares authorized; shares                                       |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|         issued      2009 4,774,432; outstanding 4,762,727; shares issued 2008                     |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|         4,755,114;      outstanding 4,743,409                                                     |                   9,548,864                                                                                   |   |                   9,510,228                                                                                   |
|      Additional      paid in capital                                                                             |                 49,651,534                                                                                              |   |                 49,634,337                                                                                              |
|      Accumulated      deficit                                                                                    |               (19,790,260)                                                                                                        |   |                    (119,886)                                                                             |
|      Less      Treasury stock at cost:  11,705 shares                                                  |                    (160,025)                                                                             |   |                    (160,025)                                                                             |
|      Accumulated      other comprehensive income(loss) - net unrealized                                          |                                                                                                                                                                                                    |   |                                                                                                                                                                                                    |
|           gain      (loss) on available for sale securities, net of taxes               |                      404,281                                                                   |   |                      (90,510)                                                                  |
|                Total      shareholders' equity                 |              39,654,394                                                                                                                |   |              58,774,144                                                                                                                |
|                Total      liabilities and shareholders' equity |  $              937,437,779                                                                                                                                     |   |  $             913,358,978                                                                                                                                      |

----

|                                      |                                                                                                            |                                                                                                                                                                                        | Three      Months Ended September 30,                                                                                                                                                       | Nine      Months Ended September 30,                                                                                                                                                        |
|-------------------------------------------|-----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      |                                                                                                            |                                                                                                                                                                                        | 2009                                                                                                                                                                                        | 2008                                                                                                                                                                                        | 2009 | 2008 |
| Interest      and Dividend Income         |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |
|                                      | Interest      and fees on loans                                                                                 |  $              9,558,338                                                                                        |  $            12,685,086                                                                                                   |  $            31,948,530                                                                                                   |  $            39,782,456 |
|                                      | Interest      and dividends on investment securities                                                            |                     339,927                                                             |                     758,192                                                             |                  1,261,099                                                                             |                  2,379,517 |
|                                      | Interest      on interest bearing deposits in banks                                                             |                       78,862                                                  |                         1,584                                       |                       98,254                                                  |                         7,855 |
|                                      | Interest      on federal funds sold                                                                             |                         6,805                                       |                       28,303                                                  |                       34,246                                                  |                     125,550 |
|                                      |                                                                                                            | Total      interest and dividend income                                                                                                                                                     |               9,983,932                                                                                               |             13,473,165                                                                                                          |             33,342,129 |             42,295,378 |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
| Interest      Expense                     |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |
|                                      | Interest      on deposits                                                                                       |                  5,400,341                                                                             |                  5,585,521                                                                             |                17,649,135                                                                                        |                20,020,142 |
|                                      | Interest      on Federal Home Loan Bank borrowings                                                              |                     428,183                                                             |                     583,203                                                             |                  1,270,527                                                                             |                  1,265,176 |
|                                      | Interest      on subordinated debt                                                                              |                       77,645                                                  |                     123,767                                                             |                     259,904                                                             |                     401,664 |
|                                      | Interest      on other borrowings                                                                               |                       77,772                                                  |                       77,772                                                  |                     230,780                                                             |                     231,625 |
|                                      |                                                                                                            | Total      interest expense                                                                                                                                                                 |               5,983,941                                                                                               |               6,370,263                                                                                               |             19,410,346 |             21,918,607 |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            | Net      interest income                                                                                                                                                                    |               3,999,991                                                                                               |               7,102,902                                                                                               |             13,931,783 |             20,376,771 |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
| Provision      for Loan Losses            |                  1,453,000 |                  3,000,000                                                                             |                  9,009,000                                                                             |                  4,545,000                                                                             |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            | Net      interest income after                                                                                                                                                              |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            |      provision      for loan losses                                                                                                                                |               2,546,991                                                                                               |               4,102,902                                                                                               |               4,922,783 |             15,831,771 |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
| Noninterest      Income                   |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |
|                                      | Mortgage      brokerage referral fees                                                                           |                       34,070                                                  |                       56,110                                                  |                     116,252                                                             |                     206,670 |
|                                      | Loan      origination & processing fees                                                                     |                       48,772                                                  |                       75,881                                                  |                     172,676                                                             |                     247,004 |
|                                      | Fees      and service charges                                                                                   |                     257,306                                                             |                     245,766                                                             |                     751,704                                                             |                     750,664 |
|                                      | Loss      on impaired investment security                                                                       |                                - |                (1,050,000)                                                                                       |                                - |                (1,050,000) |
|                                      | Gain      on sale of investment securities                                                                      |                                - |                                - |                     434,333                                                             |                                - |
|                                      | Earnings      on cash surrender value of life insurance                                                         |                     179,240                                                             |                     237,235                                                             |                     559,260                                                             |                     726,968 |
|                                      | Other      income                                                                                               |                       98,319                                                  |                     131,444                                                             |                     272,734                                                             |                     329,882 |
|                                      |                                                                                                            | Total      noninterest income (loss)                                                                                                                                                        |                   617,707                                                                         |                 (303,564)                                                                                   |               2,306,959 |               1,211,188 |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
| Noninterest      Expenses                 |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |
|                                      | Salaries      and benefits                                                                                      |                  2,946,743                                                                             |                  3,006,518                                                                             |                  8,863,928                                                                             |                  9,670,358 |
|                                      | Occupancy      and equipment expense, net                                                                       |                  1,374,719                                                                             |                  1,356,155                                                                             |                  4,088,569                                                                             |                  3,841,503 |
|                                      | Data      processing and other outside services                                                                 |                     721,175                                                             |                     250,344                                                             |                  2,050,215                                                                             |                  1,338,257 |
|                                      | Professional      services                                                                                      |                     637,629                                                             |                     247,493                                                             |                  1,787,534                                                                             |                     700,638 |
|                                      | Advertising      and promotional expenses                                                                       |                       91,157                                                  |                     189,669                                                             |                     161,914                                                             |                     618,839 |
|                                      | Loan      administration and processing expenses                                                                |                     138,991                                                             |                       77,217                                                  |                     408,210                                                             |                     197,533 |
|                                      | Regulatory      assessments                                                                                     |                     663,365                                                             |                     191,103                                                             |                  1,865,092                                                                             |                     554,909 |
|                                      | Other      real estate operations                                                                               |                     134,646                                                             |                                - |                     134,646                                                             |                                - |
|                                      | Other      noninterest expenses                                                                                 |                     826,921                                                             |                     677,921                                                             |                  1,928,100                                                                             |                  1,666,807 |
|                                      |                                                                                                            | Total      noninterest expenses                                                                                                                                                             |               7,535,346                                                                                               |               5,996,420                                                                                               |             21,288,208 |             18,588,844 |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            | Loss      before income taxes                                                                                                                                                               |              (4,370,648)                                                                                                   |              (2,197,082)                                                                                                   |           (14,058,466) |              (1,545,885) |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
| Provision      (Benefit) for Income Taxes |                  9,565,000 |                   (288,000)                                                                       |                  5,611,000                                                                             |                   (183,000)                                                                       |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            | Net      loss                                                                                                                                                                               |  $              (13,935,648)                                                                                                                   |  $                (1,909,082)                                                                                                        |  $              (19,669,466) |  $                (1,362,885) |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            | Basic      (loss) per share                                                                                                                                                                 |  $                    (2.93)                                                       |  $                    (0.40)                                                       |  $                    (4.14) |  $                    (0.29) |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            | Diluted      (loss) per share                                                                                                                                                               |  $                    (2.93)                                                       |  $                    (0.40)                                                       |  $                    (4.14) |  $                    (0.29) |
|                                      |                                                                                                            |                                                                                                                                                                                        |                                                                                                                                                                                        |                                                                                                                                                                                        |   |   |
|                                      |                                                                                                            | Dividends      per share                                                                                                                                                                    |  $                                 -            |  $                         0.045                                                        |  $                                      - |  $                         0.135 |

----

|                                                                       |                                                                                                               | Three      Months Ended                                                                                            |                                                                     | Nine      Months Ended                                                                                  |
|----------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------|
|                                                                       |                                                                                                               | September      30,                                                                                                 |                                                                     | September      30,                                                                                      |
|                                                                       |                                                                                                               | 2009                                                                                                               | 2008                                                                     |                                                                                                    | 2009 | 2008 |
|                                                                       |                                                                                                               |                                                                                                               |                                                                     |                                                                                                    |   |   |
| Net      loss                                                              |                                                                                                               |  $       (13,935,648)                                                      |  $         (1,909,082) |                                                                                                    |  $       (19,669,466) |  $         (1,362,885) |
|                                                                       |                                                                                                               |                                                                                                               |                                                                     |                                                                                                    |   |   |
| Unrealized      holding gains on securities:                               |                                                                                                               |                                                                                                               |                                                                     |                                                                                                    |   |
|      Unrealized      holding gains arising during |                                                                                                               |                                                                                                               |                                                                     |                                                                                                    |   |
|      the      period, net of taxes                |                   94,558 |                   69,425 |                                                                     |                 494,791 |                 152,240 |
|                                                                       |                                                                                                               |                                                                                                               |                                                                     |                                                                                                    |   |   |
| Comprehensive      loss                                                    |  $           (13,841,090)                                                            |  $            (1,839,657)                                                       |                                                                     |  $           (19,174,675)                                                      |  $            (1,210,645) |

----

|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |  Retained                                                                                                                              |                                                                                                                            |  Accumulated                                                                                                                                       |                                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------------|
|                                                                                                                    |                                                                                                                |                                                                                                                            |  Additional                                                                                                                                  |  Earnings                                                                                                                              |                                                                                                                            |  Other                                                                                                                                             |                                                                                                              |
|                                                                                                                    |  Number      of                                                                                                |  Common                                                                                                                    |  Paid-In                                                                                                                                     |  (Accumulated                                                                                                                          |  Treasury                                                                                                                  |  Comprehensive                                                                                                                                     |                                                                                                              |
|                                                                                                                    |  Shares                                                                                                        |  Stock                                                                                                                     |  Capital                                                                                                                                     |  Deficit)                                                                                                                              |  Stock                                                                                                                     |  Income      (Loss)                                                                                                                                |  Total                                                                                                       |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Nine      months ended September 30, 2008                                                                               |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Balance      at December 31, 2007                                                                                       |     4,746,844                                                                                   |  $    9,493,688                                                                                        |  $    49,549,119                                                                                                         |  $     7,846,060                                                                                              |  $                  -            |  $           (53,500)                                                                       |  $     66,835,367                                                                   |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Comprehensive      income                                                                                               |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
|   Net      loss                                                                                               |                    - |                      - |                         - |        (1,362,885)                                                                                       |                      - |                          - |         (1,362,885)                                                       |
|   Unrealized      holding gain on available for                                                               |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |
|      sale      securities, net of taxes                                                        |                    - |                      - |                         - |                        - |                                                                                                                            |               152,240                                                             |              152,240                             |
|                Total      comprehensive loss |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |         (1,210,645)                                                                                             |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Issuance      of common stock                                                                                           |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
|    Stock      options exercised                                                                          |            5,000                                             |             10,000                                                  |               40,550                                                        |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                50,550                  |
|    Stock      issued to directors                                                                        |            3,270                                             |               6,540                                       |               43,392                                                        |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                49,932                  |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |              100,482                             |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Treasury      Strock                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
|    Stock      purchased under buyback                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |         (138,235)                                                                       |                                                                                                                                                    |            (138,235)                                       |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Dividends                                                                                                               |                    - |                      - |                         - |           (640,887)                                                                       |                                                                                                                            |                          - |            (640,887)                                       |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Balance,      September 30, 2008                                                                                        |     4,755,114                                                                                   |  $    9,510,228                                                                                        |  $    49,633,061                                                                                                         |  $     5,842,288                                                                                              |  $     (138,235)                                                                                  |  $             98,740                                                             |  $     64,946,082                                                                   |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Nine      months ended September 30, 2009                                                                               |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Balance      at December 31, 2008                                                                                       |     4,743,409                                                                                   |  $    9,510,228                                                                                        |  $    49,634,337                                                                                                         |  $       (119,886)                                                                                  |  $     (160,025)                                                                                  |  $           (90,510)                                                                       |  $     58,774,144                                                                   |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Comprehensive      loss                                                                                                 |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
|   Net      loss                                                                                               |                    - |                      - |                         - |      (19,669,466)                                                                                                  |                      - |                          - |       (19,669,466)                                                                  |
|   Unrealized      holding gain on available                                                                   |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |
|      for      sale securities, net of taxes                                                    |                    - |                      - |                         - |                        - |                      - |               494,791                                                             |              494,791                             |
|                Total      comprehensive loss |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |       (19,174,675)                                                                                                        |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Issuance      of common stock                                                                                           |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
|      Stock      issued to directors                                                            |          19,318                                                        |             38,636                                                  |               17,197                                                        |                        - |                      - |                          - |                55,833                  |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Dividends                                                                                                               |                    - |                      - |                         - |                  (908)                                 |                      - |                          - |                   (908) |
|                                                                                                                    |                                                                                                                |                                                                                                                            |                                                                                                                                              |                                                                                                                                        |                                                                                                                            |                                                                                                                                                    |                                                                                                              |
| Balance,      September 30, 2009                                                                                        |     4,762,727                                                                                   |  $    9,548,864                                                                                        |  $    49,651,534                                                                                                         |  $  (19,790,260)                                                                                                             |  $     (160,025)                                                                                  |  $           404,281                                                                        |  $     39,654,394                                                                   |

----

|                                       |                                                                                                | Nine      Months Ended                                                                                                                                        |
|--------------------------------------------|-----------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                       |                                                                                                | September      30,                                                                                                                                            |
|                                       |                                                                                                | 2009                                                                                                                                                          | 2008 |
|                                       |                                                                                                |                                                                                                                                                          |   |
| Cash      Flows from Operating Activities: |                                                                                                |                                                                                                                                                          |
|                                       | Net      loss                                                                                       |  $       (19,669,466)                                                                                                 |  $         (1,362,885) |
|                                       | Adjustments      to reconcile net loss to net cash                                                  |                                                                                                                                                          |   |
|                                       | (used      in) provided by operating activities:                                                    |                                                                                                                                                          |   |
|                                       | Amortization      and accretion of investment premiums and discounts, net                           |                 101,743                                                       |                 114,453 |
|                                       | Provision      for loan losses                                                                      |              9,009,000                                                                       |              4,545,000 |
|                                       | Loss      on impaired investment security                                                           |                           - |              1,050,000 |
|                                       | Gain      on sale of investment securities                                                          |                (434,333)                                                           |                           - |
|                                       | Amortization      of core deposit intangible                                                        |                   12,591                                            |                   13,266 |
|                                       | Earnings      on cash surrender value of life insurance                                             |                (559,260)                                                           |                (726,968) |
|                                       | Depreciation      and amortization                                                                  |              1,242,948                                                                       |              1,197,200 |
|                                       | Loss      on disposal of bank premises and equipment                                                |                        156                 |                          46 |
|                                       | Payment      of fees to directors in common stock                                                   |                   55,833                                            |                   49,932 |
|                                       | Deferred      income taxes                                                                          |              8,624,602                                                                       |             (1,474,368) |
|                                       | Changes      in assets and liabilities:                                                             |                                                                                                                                                          |   |
|                                       |      Decrease      in deferred loan fees                                   |                (679,708)                                                           |                (553,329) |
|                                       |      Decrease      (increase) in accrued interest and dividends receivable |              1,070,644                                                                       |                (115,410) |
|                                       |      Increase      in other assets                                         |             (4,245,217)                                                                           |                (427,277) |
|                                       |      Decrease      in accrued expenses and other liabilities               |             (1,067,361)                                                                           |             (1,923,735) |
|                                       |      Net      cash (used in) provided by operating activities              |          (6,537,828)                                                                                             |               385,925 |
|                                       |                                                                                                |                                                                                                                                                          |   |
| Cash      Flows from Investing Activities: |                                                                                                |                                                                                                                                                          |
|                                       | Purchases      of available for sale securities                                                     |           (14,524,178)                                                                                      |           (18,366,036) |
|                                       | Proceeds      from sales of available for sale securities                                           |            19,852,541                                                                                  |                           - |
|                                       | Principal      repayments on available for sale securities                                          |              4,864,181                                                                       |            19,688,086 |
|                                       | Proceeds      from calls and redemptions of available for salesecurities                            |            11,000,000                                                                                  |              9,000,000 |
|                                       | Purchases      of Federal Reserve Bank Stock                                                        |                    (1,500)                                     |                    (1,500) |
|                                       | Purchases      of Federal Home Loan Bank Stock                                                      |                           - |             (1,852,200) |
|                                       | Net      decrease (increase) in loans                                                               |            70,215,878                                                                                  |         (108,699,558) |
|                                       | Purchase      of bank premises and equipment                                                        |                (294,131)                                                           |                (994,195) |
|                                       |      Net      cash provided by (used in) investing activities              |          91,112,791                                                                                              |      (101,225,403) |
|                                       |                                                                                                |                                                                                                                                                          |   |
| Cash      Flows from Financing Activities: |                                                                                                |                                                                                                                                                          |
|                                       | Net      increase in demand, savings and money market deposits                                      |            55,477,476                                                                                  |            36,398,254 |
|                                       | Net      (decrease) increase in time certificates of deposits                                       |           (11,245,895)                                                                                      |            23,145,738 |
|                                       | Net      proceeds from FHLB borrowings                                                              |                           - |            41,500,000 |
|                                       | Proceeds      from issuance of common stock                                                         |                           - |                   50,550 |
|                                       | Payments      under stock buyback program                                                           |                           - |                (138,235) |
|                                       | Dividends      paid on common stock                                                                 |                (214,361)                                                           |                (641,422) |
|                                       |      Net      cash provided by financing activities                        |          44,017,220                                                                                              |       100,314,885 |
|                                       |                                                                                                |                                                                                                                                                          |   |
|                                       |      Net      increase (decrease) in cash and cash equivalents             |       128,592,183                                                                                                               |              (524,593) |

----

|                                                                         |                                               | Nine      Months Ended                                                                                                                                         |
|------------------------------------------------------------------------------|----------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                         |                                               | September      30,                                                                                                                                             |
|                                                                         |                                               | 2009                                                                                                                                                           | 2008 |
|                                                                         |                                               |                                                                                                                                                           |   |
| Cash      and Cash Equivalents:                                              |                                               |                                                                                                                                                           |
|                                                                         | Beginning                                          |            24,602,751                                                                                   |            14,011,914 |
|                                                                         |                                               |                                                                                                                                                           |   |
|                                                                         | Ending                                             |  $      153,194,934                                                                                                         |  $        13,487,321 |
|                                                                         |                                               |                                                                                                                                                           |   |
| Supplemental      Disclosures of Cash Flow Information                       |                                               |                                                                                                                                                           |
|                                                                         | Cash      paid for:                                |                                                                                                                                                           |   |
|                                                                         |      Interest             |  $        19,313,572                                                                                              |  $        21,741,157 |
|                                                                         |                                               |                                                                                                                                                           |   |
|                                                                         |      Income      taxes    |  $          1,379,195                                                                                   |  $          1,231,245 |
|                                                                         |                                               |                                                                                                                                                           |   |
| Supplemental      disclosures of noncash investing and financing activities: |                                               |                                                                                                                                                           |
|                                                                         |                                               |                                                                                                                                                           |   |
|                                                                         | Unrealized      holding gain on available for sale |                                                                                                                                                           |   |
|                                                                         | securities      arising during the period          |  $             798,048                                                                   |  $             245,548 |
|                                                                         |                                               |                                                                                                                                                           |   |
|                                                                         | Transfer      of loans to other real estate owned  |  $          7,715,600                                                                                   |  $                         - |
|                                                                         |                                               |                                                                                                                                                           |   |
|                                                                         | Dividends      declared on common stock            |  $                         - |  $             213,073 |

----

----

|                                                     |                                                      | Gross                                                                                                                                       | Gross                                                                                                                                       |                                                      |
|----------------------------------------------------------|-----------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------------|
|                                                     | Amortized                                                 | Unrealized                                                                                                                                  | Unrealized                                                                                                                                  | Fair                                                      |
|                                                     | Cost                                                      | Gains                                                                                                                                       | Losses                                                                                                                                      | Value                                                     |
| September      30, 2009:                                 |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|                                                     |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
| U.      S. Government Agency bonds                       |  $     5,178,165            |  $                    -            |  $         (28,165)                                                                       |  $     5,150,000            |
| U.      S. Government Agency and sponsored               |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|    agency      mortgage-backed securities |       23,204,701            |            203,798                                                                   |             (43,481)                                                            |       23,365,018            |
| Money      market preferred equity securities            |         2,882,840 |            519,914                                                                   |                        - |         3,402,754 |
| Total      Available-for-Sale Securities                 |  $   31,265,706                       |  $        723,712                                                                              |  $         (71,646)                                                                       |  $   31,917,772                       |
|                                                     |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
| December      31, 2008:                                  |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|                                                     |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
| U.      S. Government sponsored agency                   |                                                      |                                                                                                                                        |                                                                                                                                        |
|          obligations                      |  $   10,000,000                       |  $        102,248                                                                              |  $                    -            |  $   10,102,248                       |
| U.      S. Government Agency and sponsored               |                                                      |                                                                                                                                        |                                                                                                                                        |                                                      |
|    agency      mortgage-backed securities |       38,246,799            |            231,766                                                                   |           (479,996)                                                                       |       37,998,569            |
| Money      market preferred equity securities            |         3,878,860 |                        - |                        - |         3,878,860 |
| Total      Available-for-Sale Securities                 |  $   52,125,659                       |  $        334,014                                                                              |  $       (479,996)                                                                                  |  $   51,979,677                       |

----

|                               |   | Less      Than 12 Months |       |   | 12      Months or More |     |    | Total  |   |
|------------------------------------|--------|--------------------------|------------|--------|------------------------|----------|---------|--------|--------|
|                               |   | Fair                     |       |   | Unrealized             |     |    | Fair   |   |   | Unrealized |   |   | Fair |   |   | Unrealized |   |
|                               |   | Value                    |       | Loss   |                   |     | Value   |   | Loss   |   |   | Value |   | Loss |   |
| September 30,      2009:           |   |                     |       |   |                   |     |    |   |   |   |   |   |   |   |   |   |   |   |
|                               |   |                     |       |   |                   |     |    |   |   |   |   |   |   |   |   |   |   |   |
| U.      S. Government Agency bonds |   | $                        | 5,150,000  |   |                   | $        | (28,165 | )      |   | $ | - |   |   | $ | - |   |   | $ | 5,150,000 |   |   | $ | (28,165 | ) |
| Mortgage-backed      securities    |   |                     | 4,547,486  |   |                   | (22,932  | )       |   |   | 2,075,074 |   |   | (20,548 | ) |   |   | 6,622,560 |   |   | (43,481 | ) |
| Totals                             |   | $                        | 9,697,486  |   | $                      | (51,097  | )       |   | $      | 2,075,074 |   | $ | (20,548 | ) |   | $ | 11,772,560 |   | $ | (71,646 | ) |
|                               |   |                     |       |   |                   |     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31,      2008:            |   |                     |       |   |                   |     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                               |   |                     |       |   |                   |     |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed      securities    |   | $                        | 14,593,894 |   | $                      | (317,703 | )       |   | $      | 5,527,631 |   | $ | (162,293 | ) |   | $ | 20,121,525 |   | $ | (479,996 | ) |

----

|                                                          | Amortized      Cost                            | Fair      Value                                |
|---------------------------------------------------------------|------------------------------------------------|------------------------------------------------|
| September 30,      2009:                                      |                                           |                                           |
| Maturity:                                                     |                                           |                                           |
|      >      5 years               |  $     5,178,165 |  $     5,150,000 |
|      Mortgage-backed      securities |       23,204,701 |       23,365,018 |
| Total                                                         |  $   28,382,866            |  $   28,515,018            |

|                                |   | Three      months ended                                             | Nine      months ended                                                                  |
|-------------------------------------|--------|---------------------------------------------------------------------|-----------------------------------------------------------------------------------------|
|                                |   |  September      30,                                            |  September      30,                                                                |
| (Thousands      of dollars)         |   | 2009                                                                | 2008                                                                                    | 2009 | 2008 |
|                                |   |                                                                |                                                                                    |   |   |
| Balance      at beginning of period |   |  $   16,564,668                                 |  $   7,217,619                                                      |  $   16,247,070 |  $   5,672,619 |
| Provision      for loan losses      |   |         1,453,000           |      3,000,000                                                 |         9,009,000 |      4,545,000 |
| Charge-offs                         |   |          (474,913)     |       (716,225)                                           |       (7,786,345) |       (716,225) |
| Recoveries                          |   |           109,000 |               754 |           182,030 |               754 |
| Balance      at end of period       |   |  $   17,651,755                                 |  $   9,502,148                                                      |  $   17,651,755 |  $   9,502,148 |

----

|                                                       | September      30,                                                                 |   | December      31,                                                                  |
|------------------------------------------------------------|------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------|
|                                                       | 2009                                                                               |   | 2008                                                                               |
|                                                       |                                                                               |   |                                                                               |
| Impaired      loans receivable for which there is a        |                                                                               |   |                                                                               |
|    related      allowance for credit losses |  $         48,979,155            |   |  $         42,535,777            |
|                                                       |                                                                               |   |                                                                               |
| Impaired      loans receivable for which there is no       |                                                                               |   |                                                                               |
|    related      allowance for credit losses |  $         88,949,520            |   |  $         37,620,136            |
|                                                       |                                                                               |   |                                                                               |
| Allowance      for credit losses related to impaired loans |  $           6,730,503 |   |  $           4,211,954 |

----

| Three      months ended September 30, 2009                      |                                                                                       |                                                                                    |    |   |
|-----------------------------------------------------------------|--------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------|---------|--------|
|                                                            |                                                                                       |                                                                                    |    |   |
|                                                            | Net      Loss                                                                              | Shares                                                                                  |    | Amount |
| Basic      and Diluted Loss Per Share                           |                                                                                       |                                                                                    |    |   |
|    Loss      attributable to common shareholders |  $          (13,935,648)            |              4,762,727 |  $ | (2.93) |
|                                                            |                                                                                       |                                                                                    |    |   |
| Three      months ended September 30, 2008                      |                                                                                       |                                                                                    |    |   |
|                                                            |                                                                                       |                                                                                    |    |   |
|                                                            | Net      Loss                                                                              | Shares                                                                                  |    | Amount |
| Basic      Loss Per Share                                       |                                                                                       |                                                                                    |    |   |
|    Loss      attributable to common shareholders |  $            (1,909,082) |              4,749,534 |  $ | (0.40) |
|                                                            |                                                                                       |                                                                                    |    |   |
| Nine      months ended September 30, 2009                       |                                                                                       |                                                                                    |    |   |
|                                                            |                                                                                       |                                                                                    |    |   |
|                                                            | Net      Loss                                                                              | Shares                                                                                  |    | Amount |
| Basic      and Diluted Loss Per Share                           |                                                                                       |                                                                                    |    |   |
|    Loss      attributable to common shareholders |  $          (19,669,466)            |              4,750,768 |  $ | (4.14) |
|                                                            |                                                                                       |                                                                                    |    |   |
| Nine      months ended September 30, 2008                       |                                                                                       |                                                                                    |    |   |
|                                                            |                                                                                       |                                                                                    |    |   |
|                                                            | Net      Loss                                                                              | Shares                                                                                  |    | Amount |
| Basic      Loss Per Share                                       |                                                                                       |                                                                                    |    |   |
|    Loss      attributable to common shareholders |  $            (1,362,885) |              4,750,584 |  $ | (0.29) |

----

|                                   | Three      Months Ended                                                                                                   |                                                                                                                      | Nine      Months Ended                                                                                                    |
|----------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
|                                   | September      30, 2009                                                                                                   |                                                                                                                      | September      30, 2009                                                                                                   |
|                                   | Before      Tax                                                                                                           |                                                                                                                      | Net      of Tax                                                                                                           |   |  Before      Tax |   |  Net      of Tax |
|                                   | Amount                                                                                                                    | Tax      Effect                                                                                                           | Amount                                                                                                                    |   |  Amount |  Tax      Effect |  Amount |
|                                   |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized      holding gains          |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| arising      during the period         |  $       152,512                                                                  |  $       (57,954)                                                                 |  $         94,558                                                       |   |  $    1,232,381 |  $     (468,304) |  $       764,077 |
|                                   |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Reclassification      adjustment       |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| for      gains recognized in income    |                     - |                     - |                     - |   |         (434,333) |           165,047 |         (269,286) |
|                                   |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized      holding gains (losses) |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| on      available for sale securities, |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| net      of taxes                      |  $       152,512                                                                  |  $       (57,954)                                                                 |  $         94,558                                                       |   |  $       798,048 |  $     (303,257) |  $       494,791 |
|                                   |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
|                                   | Three      Months Ended                                                                                                   |                                                                                                                      | Nine      Months Ended                                                                                                    |
|                                   | September      30, 2008                                                                                                   |                                                                                                                      | September      30, 2008                                                                                                   |
|                                   | Before      Tax                                                                                                           |                                                                                                                      | Net      of Tax                                                                                                           |   |  Before      Tax |   |  Net      of Tax |
|                                   | Amount                                                                                                                    | Tax      Effect                                                                                                           | Amount                                                                                                                    |   |  Amount |  Tax      Effect |  Amount |
|                                   |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized      holding losses         |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| arising      during the period         |  $     (938,024)                                                                            |  $       361,449                                                                  |  $     (576,575)                                                                            |   |  $     (804,452) |  $       310,692 |  $     (493,760) |
|                                   |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Reclassification      adjustment       |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| for      losses recognized in income   |        1,050,000                                                                       |         (404,000)                                                                 |           646,000                                                       |   |        1,050,000 |         (404,000) |           646,000 |
|                                   |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| Unrealized      holding gains          |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| on      available for sale securities, |                                                                                                                      |                                                                                                                      |                                                                                                                      |   |   |   |   |
| net      of taxes                      |  $       111,976                                                                  |  $       (42,551)                                                                 |  $         69,425                                                       |   |  $       245,548 |  $       (93,308) |  $       152,240 |

----

|   | Commitments      to extend credit:              |                                                                              |   |
|--------|-------------------------------------------------|-----------------------------------------------------------------------------------|--------|
|   |        Future      loan commitments        |  $         8,078,229            |   |
|   |        Unused      lines of credit         |           37,595,049            |   |
|   |        Undisbursed      construction loans |           30,711,543            |   |
|   | Financial      standby letters of credit        |             1,231,600 |   |
|   |                                            |  $       77,616,421                       |   |

----

|                        | September      30,                                                                                                                                                                           | December      31,                                                                                                |
|-----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------|
|                        | 2009                                                                                                                                                                                         | 2008                                                                                                             |
|                        |                                                                                                                                                                                         |                                                                                                             |
| Deferred      Tax Asset     |  $              12,204,000                                                                                        |  $                9,504,075 |
| Valuation      Allowance    |             (12,204,000)                                                                                                         |                  (824,000)  |
| Net      Deferred Tax Asset |  $                              - |  $                8,680,075 |
|                        |                                                                                                                                                                                         |                                                                                                             |

----

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

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

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

----

----

----

|                               |  Quoted      Prices in                                                                                                                                                      | Significant                         | Significant                                                                                                                      |                                                                    |
|------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------|
|                               |  Active      Markets                                                                                                                                                        | Observable                          | Unobservable                                                                                                                     | Balance                                                                 |
|                               |  for      Identical Assets                                                                                                                                                  | Inputs                              | Inputs                                                                                                                           | as      of                                                              |
| September      30, 2009            | (Level      1)                                                                                                                                                                   | (Level      2)                      | (Level      3)                                                                                                                   | September      30, 2009                                                 |
|                               |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
| Securities      available for sale |  $                            - |  $   31,917,772 |  $                    - |  $         31,917,772 |
|                               |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
|                               |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
|                               | Quoted      Prices in                                                                                                                                                            | Significant                         | Significant                                                                                                                      |                                                                    |
|                               | Active      Markets                                                                                                                                                              | Observable                          | Unobservable                                                                                                                     | Balance                                                                 |
|                               | for      Identical Assets                                                                                                                                                        | Inputs                              | Inputs                                                                                                                           | as      of                                                              |
| December      31, 2008             | (Level      1)                                                                                                                                                                   | (Level      2)                      | (Level      3)                                                                                                                   | December      31, 2008                                                  |
|                               |                                                                                                                                                                             |                                |                                                                                                                             |                                                                    |
| Securities      available for sale |  $                            - |  $   51,979,677 |  $                    - |  $         51,979,677 |

----

|                    |  Quoted      Prices in                                                                                                                                                | Significant                                                                                                                      | Significant                               |                                                                    |
|-------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------|-------------------------------------------------------------------------|
|                    |  Active      Markets                                                                                                                                                  | Observable                                                                                                                       | Unobservable                              | Balance                                                                 |
|                    |  for      Identical Assets                                                                                                                                            | Inputs                                                                                                                           | Inputs                                    | as      of                                                              |
| September      30, 2009 | (Level      1)                                                                                                                                                             | (Level      2)                                                                                                                   | (Level      3)                            | September      30, 2009                                                 |
|                    |                                                                                                                                                                       |                                                                                                                             |                                      |                                                                    |
| Impaired Loans (1)      |  $                           - |  $                    - |  $  125,528,450            |  $       125,528,450            |
|                    |                                                                                                                                                                       |                                                                                                                             |                                      |                                                                    |
|                    |                                                                                                                                                                       |                                                                                                                             |                                      |                                                                    |
|                    | Quoted      Prices in                                                                                                                                                      | Significant                                                                                                                      | Significant                               |                                                                    |
|                    | Active      Markets                                                                                                                                                        | Observable                                                                                                                       | Unobservable                              | Balance                                                                 |
|                    | for      Identical Assets                                                                                                                                                  | Inputs                                                                                                                           | Inputs                                    | as      of                                                              |
| December      31, 2008  | (Level      1)                                                                                                                                                             | (Level      2)                                                                                                                   | (Level      3)                            | December      31, 2008                                                  |
|                    |                                                                                                                                                                       |                                                                                                                             |                                      |                                                                    |
| Impaired Loans (1)      |  $                           - |  $                    - |  $    57,233,190 |  $         57,233,190 |

|                         |  Quoted      Prices in                                                                                                                                                | Significant                                                                                                                      | Significant                                    |                                                                                     |
|------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|------------------------------------------------------------------------------------------|
|                         |  Active      Markets                                                                                                                                                  | Observable                                                                                                                       | Unobservable                                   | Balance                                                                                  |
|                         |  for      Identical Assets                                                                                                                                            | Inputs                                                                                                                           | Inputs                                         | as      of                                                                               |
|                         | (Level      1)                                                                                                                                                             | (Level      2)                                                                                                                   | (Level      3)                                 | September      30, 2009                                                                  |
|                         |                                                                                                                                                                       |                                                                                                                             |                                           |                                                                                     |
| Other      real estate owned |  $                           - |  $                    - |  $     7,715,600 |  $            7,715,600 |

----

----

|                                                      |   | September      30, 2009 |    | December      31, 2008 |   |
|-----------------------------------------------------------|--------|-------------------------|---------|------------------------|--------|
|                                                      |   | Recorded                |    |                   |   |   |   | Recorded |   |   |   |   |
|                                                      |   | Book                    |    |                   | Fair   |   |   | Book |   |   | Fair |   |
|                                                      |   | Balance                 |    | Value                  |   | Balance |   | Value |   |
| Financial      Assets:                                    |   |                    |    |                   |   |   |   |   |   |   |   |   |
| Cash      and noninterest bearing balances due from banks |   | $                       | 2,469   |                   |   | $ | 2,469 |   |   | $ | 3,046 |   |   | $ | 3,046 |   |
| Interest-bearing      deposits due from banks             |   |                    | 150,522 |                   |   |   | 150,522 |   |   |   | 1,241 |   |   |   | 1,241 |   |
| Federal      funds sold                                   |   |                    | -       |                   |   |   | - |   |   |   | 20,000 |   |   |   | 20,000 |   |
| Short-term      investments                               |   |                    | 203     |                   |   |   | 203 |   |   |   | 317 |   |   |   | 317 |   |
| Available-for-sale      securities                        |   |                    | 31,918  |                   |   |   | 31,918 |   |   |   | 51,980 |   |   |   | 51,980 |   |
| Federal      Reserve Bank stock                           |   |                    | 1,915   |                   |   |   | 1,915 |   |   |   | 1,913 |   |   |   | 1,913 |   |
| Federal      Home Loan Bank stock                         |   |                    | 4,508   |                   |   |   | 4,508 |   |   |   | 4,508 |   |   |   | 4,508 |   |
| Loans      receivable, net                                |   |                    | 702,308 |                   |   |   | 696,084 |   |   |   | 788,569 |   |   |   | 795,938 |   |
| Accrued      interest receivable                          |   |                    | 3,486   |                   |   |   | 3,486 |   |   |   | 4,557 |   |   |   | 4,557 |   |
|                                                      |   |                    |    |                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Financial      Liabilities:                               |   |                    |    |                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand      deposits                                      |   | $                       | 48,054  |                   |   | $ | 48,054 |   |   | $ | 50,194 |   |   | $ | 50,194 |   |
| Savings      deposits                                     |   |                    | 64,324  |                   |   |   | 64,324 |   |   |   | 46,040 |   |   |   | 46,040 |   |
| Money      market deposits                                |   |                    | 106,451 |                   |   |   | 106,451 |   |   |   | 68,242 |   |   |   | 68,242 |   |
| Negotiable      orders of withdrawal                      |   |                    | 20,670  |                   |   |   | 20,670 |   |   |   | 19,545 |   |   |   | 19,545 |   |
| Time      deposits                                        |   |                    | 589,555 |                   |   |   | 594,946 |   |   |   | 600,801 |   |   |   | 601,357 |   |
| FHLB      Borrowings                                      |   |                    | 50,000  |                   |   |   | 50,725 |   |   |   | 50,000 |   |   |   | 50,106 |   |
| Repurchase      agreements                                |   |                    | 7,000   |                   |   |   | 7,791 |   |   |   | 7,000 |   |   |   | 8,365 |   |
| Subordinated      debentures                              |   |                    | 8,248   |                   |   |   | 8,248 |   |   |   | 8,248 |   |   |   | 8,248 |   |
| Accrued      interest payable                             |   |                    | 590     |                   |   |   | 590 |   |   |   | 493 |   |   |   | 493 |   |

----

----

----

----

----

----

----

|                                                     |  September      30, |  December      31, |
|----------------------------------------------------------|--------------------------|-------------------------|
|                                                     | 2009                     |                    | 2008 |   |
|                                                     |                     |                    |   |   |
| U.      S. Government sponsored                          |                     |                    |   |   |
|   agency      obligations                      | $                        | -                       |   | $ | 10,102,248 |   |
| U.      S. Government Agency bonds                       |                     | 5,150,000               |   |   | - |   |
| U.      S. Government Agency and sponsored               |                     |                    |   |   |   |   |
|    agency      mortgage-backed securities |                     | 23,365,018              |   |   | 37,998,569 |   |
| Money      market preferred                              |                     |                    |   |   |   |   |
|   equity      securities                       |                     | 3,402,754               |   |   | 3,878,860 |   |
| Total      Available for Sale Securities                 | $                        | 31,917,772              |   | $ | 51,979,677 |   |

----

----

|                                             |  September      30, |  December      31, |
|--------------------------------------------------|--------------------------|-------------------------|
|                                             | 2009                     |                    | 2008 |   |
| Real      Estate                                 |                     |                    |   |   |
|    Commercial                     | $                        | 241,641,814             |   | $ | 262,570,339 |   |
|    Residential                    |                     | 197,163,116             |   |   | 170,449,780 |   |
|    Construction                   |                     | 194,876,210             |   |   | 257,117,081 |   |
|    Construction      to permanent |                     | 16,105,717              |   |   | 35,625,992 |   |
| Commercial                                       |                     | 23,629,201              |   |   | 33,860,527 |   |
| Consumer      home equity                        |                     | 45,445,578              |   |   | 45,022,128 |   |
| Consumer      installment                        |                     | 1,267,260               |   |   | 993,707 |   |
| Total      Loans                                 |                     | 720,128,896             |   |   | 805,639,554 |   |
| Premiums      on purchased loans                 |                     | 132,937                 |   |   | 158,072 |   |
| Net      deferred loan fees                      |                     | (302,162                | ) |   | (981,869 | ) |
| Allowance      for loan losses                   |                     | (17,651,755             | ) |   | (16,247,070 | ) |
| Loans      receivable, net                       | $                        | 702,307,916             |   | $ | 788,568,687 |   |

----

|                                              | September      30,                                                                                                       | December      31,                                                                                                                        |
|---------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|
| (Thousands      of dollars)                       | 2009                                                                                                                     | 2008                                                                                                                                     |
|                                              |                                                                                                                     |                                                                                                                                     |
| Loans      past due over 90 days                  |  $                  4,595 |  $                     337 |
|      still      accruing |                                                                                                                     |                                                                                                                                     |
| Non      accruing loans                           |                 137,929                  |                   80,156                       |
|      Total               |  $              142,524                       |  $                80,493                            |
| %      of Total Loans                             | 20.29%                                                                                                                   | 10.21%                                                                                                                                   |
| %      of Total Assets                            | 15.21%                                                                                                                   | 8.81%                                                                                                                                    |

----

----

----

|                                                             | Three      months ended                                                                     |                                                                                                | Nine      months ending  |
|------------------------------------------------------------------|---------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------|--------------------------|
|                                                             |  September      30,                                                                    |                                                                                                |  September      30, |
| (Thousands      of dollars)                                      | 2009                                                                                        | 2008                                                                                                |                     | 2009 | 2008 |
|                                                             |                                                                                        |                                                                                                |                     |   |   |
| Balance      at beginning of period                              |  $      16,564,668                                       |  $   7,217,619                                                                  |                     |  $      16,247,070 |  $   5,672,619 |
| Charge-offs                                                      |             (474,913)           |        (716,225)                                                 |                     |          (7,786,345) |        (716,225) |
| Recoveries                                                       |               109,000 |                 754 |                     |               182,030 |                 754 |
| Net      Charge-offs                                             |             (365,913)           |        (715,471)                                                 |                     |          (7,604,315) |        (715,471) |
| Provision      charged to operations                             |            1,453,000                 |       3,000,000                                                       |                     |            9,009,000 |       4,545,000 |
| Balance      at end of period                                    |  $      17,651,755                                       |  $   9,502,148                                                                  |                     |  $      17,651,755 |  $   9,502,148 |
|                                                             |                                                                                        |                                                                                                |                     |   |   |
| Ratio      of net charge-offs during                             |                                                                                        |                                                                                                |                     |   |   |
|      the      period to average loans   |                                                                                        |                                                                                                |                     |   |   |
|      outstanding      during the period | (0.05%)                                                                                     | (0.09%)                                                                                             |                     | (1.00%) | (0.09%) |

----

|                         | September      30,                                                           | December      31,                                                                                                                                              |
|------------------------------|------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                         | 2009                                                                         | 2008                                                                                                                                                           |
|                         |                                                                         |                                                                                                                                                           |
| Construction                 |  $               5,436,500 |  $                              - |
| Commercial                   |         1,664,600                    |                        -                    |
| Land                         |            614,500    |                        -                    |
|                         |                                                                         |                                                                                                                                                           |
| Other      real estate owned |  $               7,715,600 |  $                              - |

----

|                                                                     | September      30,                                                                                         | December      31,                                                                                          |
|--------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|
|                                                                     | 2009                                                                                                       | 2008                                                                                                       |
|                                                                     |                                                                                                       |                                                                                                       |
| Non-interest      bearing                                                |  $            48,053,616                  |  $            50,194,400                  |
|                                                                     |                                                                                                       |                                                                                                       |
| Interest      bearing                                                    |                                                                                                       |                                                                                                       |
|      NOW                                        |                 20,669,916 |                 19,544,552 |
|      Savings                                    |                 64,324,165 |                 46,040,086 |
|      Money      market                          |               106,450,606            |                 68,241,790 |
|      Time      certificates, less than $100,000 |               338,601,641            |               405,298,436            |
|      Time      certificates, $100,000 or more   |               250,952,988            |               195,502,087            |
| Total      interest bearing                                              |               780,999,316            |               734,626,951            |
| Total      Deposits                                                      |  $          829,052,932                             |  $          784,821,351                             |

----

----

|                                    | Three months ended      September 30,                       |
|-----------------------------------------|-------------------------------------------------------------|
|                                    |                                                        | 2009 |   |   |   | 2008 |   |
|                                    |                                                        | Interest |   |   |   | Interest |   |
|                                    | Average                                                     | Income/ | Average |   | Average | Income/ | Average |
|                                    | Balance                                                     | Expense | Rate |   | Balance | Expense | Rate |
|                                    | (dollars      in thousands)                                 |
| Interest      earning assets:           |                                                        |   |   |   |   |   |   |
| Loans                                   |  $   725,541                            |  $      9,558 | 5.27% |   |  $   788,837 |  $   12,685 | 6.43% |
| Investments                             |        40,217            |            340 | 3.38% |   |        64,056 |           749 | 4.68% |
| Interest      bearing deposits in banks |      124,799                       |              79 | 0.25% |   |            559 |               2 | 1.43% |
| Federal      funds sold                 |        20,652            |                7 | 0.14% |   |          7,227 |             37 | 2.05% |
| Total      interest                     |                                                        |   |   |   |   |   |   |
|   earning      assets         |      911,209                       |          9,984 | 4.38% |   |      860,679 |       13,473 | 6.26% |
|                                    |                                                        |   |   |   |   |   |   |
| Cash      and due from banks            |        24,058            |   |   |   |          4,648 |   |   |
| Premises      and equipment, net        |          7,043 |   |   |   |          7,517 |   |   |
| Allowance      for loan losses          |       (16,655)                |   |   |   |        (8,358) |   |   |
| Other      assets                       |        40,356            |   |   |   |        29,153 |   |   |
| Total      Assets                       |  $   966,011                            |   |   |   |  $   893,639 |   |   |
|                                    |                                                        |   |   |   |   |   |   |
| Interest      bearing liabilities:      |                                                        |   |   |   |   |   |   |
| Deposits                                |  $   797,511                            |  $      5,400 | 2.71% |   |  $   665,379 |  $     5,585 | 3.36% |
| FHLB      advances                      |        50,000            |            428 | 3.42% |   |        86,451 |           583 | 2.70% |
| Subordinated      debt                  |          8,248 |              77 | 3.73% |   |          8,248 |           124 | 6.01% |
| Other      borrowings                   |          7,000 |              79 | 4.51% |   |          7,000 |             78 | 4.46% |
| Total      interest                     |                                                        |   |   |   |   |   |   |
|   bearing      liabilities    |      862,759                       |          5,984 | 2.77% |   |      767,078 |         6,370 | 3.32% |
|                                    |                                                        |   |   |   |   |   |   |
| Demand      deposits                    |        47,210            |   |   |   |        56,462 |   |   |
| Accrued      expenses and               |                                                        |   |   |   |   |   |   |
|   other      liabilities      |          3,153 |   |   |   |          3,345 |   |   |
| Shareholders'      equity               |        52,889            |   |   |   |        66,754 |   |   |
| Total      liabilities and equity       |  $   966,011                            |   |   |   |  $   893,639 |   |   |
|                                    |                                                        |   |   |   |   |   |   |
| Net      interest income                |                                                        |  $      4,000 |   |   |   |  $     7,103 |   |
| Interest      spread                    |                                                        |   | 1.61% |   |   |   | 2.94% |
| Interest      margin                    |                                                        |   | 1.76% |   |   |   | 3.30% |

----

|                                    | Nine months ended      September 30,                        |
|-----------------------------------------|-------------------------------------------------------------|
|                                    |                                                        | 2009 |   |   |   | 2008 |   |
|                                    |                                                        | Interest |   |   |   | Interest |   |
|                                    | Average                                                     | Income/ | Average |   | Average | Income/ | Average |
|                                    | Balance                                                     | Expense | Rate |   | Balance | Expense | Rate |
|                                    | (dollars      in thousands)                                 |
| Interest      earning assets:           |                                                        |   |   |   |   |   |   |
| Loans                                   |  $   769,932                            |  $    31,949 | 5.53% |   |  $   761,506 |  $   39,782 | 6.97% |
| Investments                             |        44,099            |          1,261 | 3.81% |   |        63,537 |         2,195 | 4.61% |
| Interest      bearing deposits in banks |        62,676            |              98 | 0.21% |   |            994 |               8 | 1.07% |
| Federal      funds sold                 |        34,791            |              34 | 0.13% |   |        13,500 |           310 | 3.06% |
| Total      interest                     |                                                        |   |   |   |   |   |   |
|   earning      assets         |      911,498                       |        33,342 | 4.88% |   |      839,537 |       42,295 | 6.72% |
|                                    |                                                        |   |   |   |   |   |   |
| Cash      and due from banks            |        22,312            |   |   |   |          5,651 |   |   |
| Premises      and equipment, net        |          7,353 |   |   |   |          7,639 |   |   |
| Allowance      for loan losses          |       (16,695)                |   |   |   |        (6,847) |   |   |
| Other      assets                       |        36,146            |   |   |   |        29,100 |   |   |
| Total      Assets                       |  $   960,614                            |   |   |   |  $   875,080 |   |   |
|                                    |                                                        |   |   |   |   |   |   |
| Interest      bearing liabilities:      |                                                        |   |   |   |   |   |   |
| Deposits                                |  $   788,080                            |  $    17,649 | 2.99% |   |  $   677,284 |  $   20,020 | 3.94% |
| FHLB      advances                      |        50,004            |          1,271 | 3.39% |   |        56,202 |         1,265 | 3.00% |
| Subordinated      debt                  |          8,248 |            260 | 4.20% |   |          8,248 |           402 | 6.50% |
| Other      borrowings                   |          7,000 |            230 | 4.38% |   |          7,005 |           232 | 4.42% |
| Total      interest                     |                                                        |   |   |   |   |   |   |
|   bearing      liabilities    |      853,332                       |        19,410 | 3.03% |   |      748,739 |       21,919 | 3.90% |
|                                    |                                                        |   |   |   |   |   |   |
| Demand      deposits                    |        47,039            |   |   |   |        54,526 |   |   |
| Accrued      expenses and               |                                                        |   |   |   |   |   |   |
|   other      liabilities      |          3,975 |   |   |   |          4,534 |   |   |
| Shareholders'      equity               |        56,268            |   |   |   |        67,281 |   |   |
| Total      liabilities and equity       |  $   960,614                            |   |   |   |  $   875,080 |   |   |
|                                    |                                                        |   |   |   |   |   |   |
| Net      interest income                |                                                        |  $    13,932 |   |   |   |  $   20,376 |   |
| Interest      spread                    |                                                        |   | 1.85% |   |   |   | 2.82% |
| Interest      margin                    |                                                        |   | 2.04% |   |   |   | 3.24% |

----

|                                    | Three months ended      September 30,                                                       |                                                                                  | Nine months ended      September 30,                                                  |
|-----------------------------------------|---------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------|
|                                    | 2009 vs      2008                                                                           |                                                                                  | 2009 vs      2008                                                                     |
|                                    | Increase      (decrease) in Interest                                                        |                                                                                  | Increase      (decrease) in Interest                                                  |
|                                    | Income/Expense                                                                              |                                                                                  | Income/Expense                                                                        |
|                                    | Due      to change in:                                                                      |                                                                                  | Due      to change in:                                                                |
|                                    | Volume                                                                                      | Rate                                                                                  | Total                                                                                 |   | Volume | Rate | Total |
|                                    | (dollars      in thousands)                                                                 |                                                                                  | (dollars      in thousands)                                                           |
| Interest      earning assets:           |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Loans                                   |  $       (962)                                      |  $    (2,165)                                                |  $    (3,127)                                                |   |  $           438 |  $       (8,271) |  $       (7,833) |
| Investments                             |          (234)                                 |          (175)                           |          (409)                           |   |              (596) |              (338) |              (934) |
| Interest      bearing deposits in banks |              80            |              (3)     |              77      |   |               101 |               (11) |                 90 |
| Federal      funds sold                 |              26            |            (56)                |            (30)                |   |               198 |              (474) |              (276) |
| Total      interest                     |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
|   earning      assets         |        (1,090)                                           |        (2,399)                                     |        (3,489)                                     |   |               141 |           (9,094) |           (8,953) |
|                                    |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Interest      bearing liabilities:      |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Deposits                                |  $      1,002                                            |  $    (1,187)                                                |  $       (185)                                |   |  $         2,943 |  $       (5,314) |  $       (2,371) |
| FHLB      advances                      |          (286)                                 |            131                 |          (155)                           |   |              (148) |               154 |                   6 |
| Subordinated      debt                  |                - |            (47)                |            (47)                |   |                   - |              (142) |              (142) |
| Other      borrowings                   |                - |               1 |               1 |   |                   - |                 (2) |                 (2) |
| Total      interest                     |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
|   bearing      liabilities    |            716                       |        (1,102)                                     |          (386)                           |   |             2,795 |           (5,304) |           (2,509) |
|                                    |                                                                                        |                                                                                  |                                                                                  |   |   |   |   |
| Net      interest income                |  $    (1,806)                                                      |  $    (1,297)                                                |  $    (3,103)                                                |   |  $       (2,654) |  $       (3,790) |  $       (6,444) |

----

----

----

----

----

|   |                           | September      30, 2009 |   | December      31, 2008 |   |
|--------|--------------------------------|-------------------------|--------|------------------------|--------|
|   | Total      Risk-based Capital  | 8.76%                   |   | 10.27%                 |   |
|   | Tier      1 Risk-based Capital | 7.46%                   |   | 9.01%                  |   |
|   | Leverage      Capital          | 4.89%                   |   | 7.23%                  |   |

----

|   |                           | September      30, 2009 |   | December      31, 2008 |   |
|--------|--------------------------------|-------------------------|--------|------------------------|--------|
|   | Total      Risk-based Capital  | 8.75%                   |   | 10.22%                 |   |
|   | Tier      1 Risk-based Capital | 7.45%                   |   | 8.96%                  |   |
|   | Leverage      Capital          | 4.88%                   |   | 7.19%                  |   |

----

----

|                      | Basis  | Interest      Rate   | September      30, | December      31, |
|---------------------------|--------|----------------------|--------------------|-------------------|
|                      | Points | Risk      Guidelines | 2009               | 2008              |
|                      |   |                 |               |              |
| GAP      percentage total |   | +/-      10%         | 7.39%              | 2.51%             |
| Net      interest income  | 200    | +/-      10%         | -0.59%             | -1.32%            |
|                      | -200   | +/-      10%         | 2.62%              | -0.54%            |
| Net      portfolio value  | 200    | +/-      20%         | -10.17%            | -12.48%           |
|                      | -200   | +/-      20%         | -6.35%             | 5.40%             |

----

| September      30, 2009 |
|-------------------------|
|                    | Net      Interest Income | Net      Portfolio Value |
| Projected      Interest | Estimated | $      Change | %      Change |   | Estimated | $      Change | %      Change |
| Rate      Scenario      | Value | from      Base | from      Base |   | Value | from      Base | from      Base |
| +      200              |       22,849 |          (136) | -0.59% |   |       50,997 |       (5,770) | -10.17% |
| +      100              |       22,749 |          (236) | -1.03% |   |       53,986 |       (2,781) | -4.90% |
| BASE                    |       22,985 |   |   |   |       56,767 |   |   |
| -      100              |       23,600 |            615 | 2.68% |   |       58,033 |         1,266 | 2.23% |
| -      200              |       23,588 |            603 | 2.62% |   |       53,164 |       (3,603) | -6.35% |
|                    |   |   |   |   |   |   |   |
| December      31, 2008  |
|                    | Net      Interest Income | Net      Portfolio Value |
| Projected      Interest | Estimated | $      Change | %      Change |   | Estimated | $      Change | %      Change |
| Rate      Scenario      | Value | from      Base | from      Base |   | Value | from      Base | from      Base |
| +      200              |       22,609 |          (302) | -1.32% |   |       67,804 |       (9,668) | -12.48% |
| +      100              |       22,745 |          (166) | -0.73% |   |       72,462 |       (5,010) | -6.47% |
| BASE                    |       22,911 |   |   |   |       77,472 |   |   |
| -      100              |       22,927 |              16 | 0.07% |   |       80,422 |         2,950 | 3.81% |
| -      200              |       22,788 |          (123) | -0.54% |   |       81,658 |         4,186 | 5.40% |

----

----

----

|  Item      6:    |        Exhibits |
|--------------------------------------|----------------------|
|                                 |                 |   |
|                                 | No.                  | Description |
|                                 |                 |   |
|                                 | 2                    | Agreement      and Plan of Reorganization dated as of June 28, 1999 between      Bancorp and the Bank (incorporated by reference to Exhibit 2 to Bancorp’s      Current Report on Form 8-K dated December 1, 1999 (Commission File No.      000-29599)). |
|                                 |                 |   |
|                                 | 3(i)                 | Certificate      of Incorporation of Bancorp, (incorporated by reference to Exhibit 3(i) to      Bancorp’s Current Report on Form 8-K dated December 1, 1999      (Commission File No. 000-29599)). |
|                                 |                 |   |
|                                 | 3(i)(A)              | Certificate      of Amendment of Certificate of Incorporation of Patriot National Bancorp,      Inc. dated July 16, 2004 (incorporated by reference to Exhibit 3(i)(A) to      Bancorp's Annual Report on Form 10-KSB for the year ended      December 31, 2004 (Commission File No.000-29599)). |
|                                 |                 |   |
|                                 | 3(i)(B)              | Certificate      of Amendment of Certificate of Incorporation of Patriot National Bancorp,      Inc. dated June 15, 2006 (incorporated by reference to Exhibit 3(i)(B) to      Bancorp’s Quarterly Report of Form 10-Q for the quarter ended September      30, 2006 (commission File No. 000-29599)). |
|                                 |                 |   |
|                                 | 3(ii)                | Amended      and Restated By-laws of Bancorp (incorporated by reference to Exhibit 3.2      to Bancorp’s Current Report on Form  8 - K dated      December 26, 2007 (Commission File No. 1-32007)) |
|                                 |                 |   |
|                                 | 10(a)(1)             | 2001      Stock Appreciation Rights Plan of Bancorp (incorporated by reference to      Exhibit 10(a)(1) to Bancorp’s Annual Report on Form 10-KSB for the year      ended December 31, 2001 (Commission File No.      000-29599)). |

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

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|   | No.       | Description                                                                                                                                                                                                                                                                                                                      |
|--------|-----------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |      |                                                                                                                                                                                                                                                                                                                             |
|   |      |                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(11) | Change      of Control Agreement, dated as of January 1, 2007 among Charles F. Howell,      Patriot National Bank and Bancorp (incorporated by reference to Exhibit      10(a)(11) to Bancorp’s Annual Report on Form 10-K for the year ended      December 31, 2006 (Commission File No.    000-29599)).   |
|   |      |                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(12) | 2005      Director Stock Award Plan (incorporated by reference to Exhibit 10(a)(12)      to Bancorp’s Quarterly Report on Form 10-Q for the quarter ended June 30,      2006 (Commission FileNo. 000 - 295999)).                                                                                            |
|   |      |                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(13) | Change      of Control Agreement, dated as of January 1, 2007 between Martin G. Noble      and Patriot National Bank (incorporated by reference to Exhibit 10(a)(13)      to Bancorp’s Annual Report on Form 10-K for the year ended      December  31, 2006 (Commission File No.      000-29599)).    |
|   |      |                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(14) | Change      of Control Agreement, dated as of January 1, 2007 among Philip W. Wolford,      Patriot National Bank and Bancorp (incorporated by reference to Exhibit      10(a)(14) to Bancorp’s Annual Report on Form 10-K for the year ended      December 31, 2006 (Commission File No.      000-29599)). |
|   |      |                                                                                                                                                                                                                                                                                                                             |
|   | 10(a)(15) | Formal      Written Agreement between Patriot National Bank and the Office of the      Comptroller of the Currency (incorporated by reference to Exhibit      10(a)(15) to Bancorp’s Current Report on Form 8-K dated February 9, 2009      (Commission File No. 000-29599)).                                              |
|   |      |                                                                                                                                                                                                                                                                                                                             |
|   | 10(c)     | 1999      Stock Option Plan of the Bank (incorporated by reference to Exhibit 10(c)      to Bancorp’s Current Report on Form 8-K dated December 1, 1999 (Commission      File No. 000-29599)).                                                                                                                             |

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|   | No.    | Description                                                                                                                                                                                                                                       |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                              |
|   | 14     | Code      of Conduct for Senior Financial Officers (incorporated by reference to      Exhibit 14 to Bancorp’s Annual Report on Form 10 - KSB for      the year ended December 31, 2004 (Commission File No.      000-29599). |
|   |   |                                                                                                                                                                                                                                              |
|   | 21     | Subsidiaries      of Bancorp (incorporated by reference to Exhibit 21 to Bancorp’s Annual      Report on Form 10-KSB for the year ended December 31, 1999 (Commission      File No. 000-29599)).                                            |
|   |   |                                                                                                                                                                                                                                              |
|   | 31(1)  | Rule      13a-14(a)/15d-14(a) Certification of Chief Executive    Officer                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                              |
|   | 31(2)  | Rule      13a-14(a)/15d-14(a) Certification of Chief Financial    Officer                                                                                                                                                                         |
|   |   |                                                                                                                                                                                                                                              |
|   | 32     | Section      1350 Certifications                                                                                                                                                                                                                  |

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

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