| x |   | QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|---|--------|---------------------------------------------------------------------------------------------------|

| o |   | TRANSITION      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF      1934 |
|---|--------|----------------------------------------------------------------------------------------------------|

|        California                | 68-0450397                                   |
|-------------------------------------------------------------------------------|----------------------------------------------|
|        (State or other jurisdiction of incorporation or    organization) | (I.R.S.      Employer Identification Number) |

|        195 N. First Street, Dixon, California   | 95620           |
|------------------------------------------------------|-----------------|
|        (Address of principal executive offices) | (Zip      Code) |

| Yes  x | No   ̈ |
|------------------|----------------------|

| Large accelerated      filer    ̈ | Accelerated      filer  x |   Non-accelerated      filer   ̈ |   Smaller reporting      company  ̈ |
|------------------------------------------------------|-------------------------------------|----------------------------------------------------------|---------------------------------------------------|

| Yes   ̈ | No  x |
|-----------------------|-----------------|

----

|                                                      |   | Page                                                                                                        |
|-----------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------|
|                                                      |   |                                                                                                        |
| PART      I:    FINANCIAL INFORMATION |   |                                                                                                        |
|                                                      |   |                                                                                                        |   |   |
| Item      1                                               |   | Financial      Statements                                                                                   |   |   |
|                                                      |   |                                                                                                        |   |   |
|                                                      |   | Unaudited      Condensed Consolidated Balance Sheets                                                        |   | 3 |
|                                                      |   |                                                                                                        |   |   |
|                                                      |   | Unaudited      Condensed Consolidated Statements of Income                                                  |   | 4 |
|                                                      |   |                                                                                                        |   |   |
|                                                      |   | Unaudited      Condensed Consolidated Statement of Stockholders’ Equity and Comprehensive      Income |   | 5 |
|                                                      |   |                                                                                                        |   |   |
|                                                      |   | Unaudited      Condensed Consolidated Statements of Cash Flows                                              |   | 6 |
|                                                      |   |                                                                                                        |   |   |
|                                                      |   | Notes      to Unaudited Condensed Consolidated Financial Statements                                         |   | 7 |
|                                                      |   |                                                                                                        |   |   |
| Item      2                                               |   | Management’s      Discussion and Analysis of Financial Condition and Results of      Operations       |   | 18 |
|                                                      |   |                                                                                                        |   |   |
| Item      3                                               |   | Quantitative      and Qualitative Disclosures About Market Risk                                             |   | 30 |
|                                                      |   |                                                                                                        |   |   |
| Item      4                                               |   | Controls      and Procedures                                                                                |   | 30 |
|                                                      |   |                                                                                                        |   |   |
| PART      II:    OTHER INFORMATION    |   |                                                                                                        |
|                                                      |   |                                                                                                        |   |   |
| Item      1A                                              |   | Risk      Factors                                                                                           |   | 31 |
|                                                      |   |                                                                                                        |   |   |
| Item      2                                               |   | Unregistered      Sales of Equity Securities and Use of Proceeds                                            |   | 31 |
|                                                      |   |                                                                                                        |   |   |
| Item      6                                               |   | Exhibits                                                                                                    |   | 32 |
|                                                      |   |                                                                                                        |   |   |
| Signatures                                                |   | 32                                                                                                          |

----

|                                                                                                                                 |   | (UNAUDITED)    |    |   |              |   |
|--------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                                                                                                 |   | March 31, 2008 |    |   | December 31, 2007 |   |
| ASSETS                                                                                                                               |   |           |    |   |              |   |
| Cash      and due from banks                                                                                                         |   | $              | 50,680  |   |              | $      | 52,090 |   |
| Federal      funds sold                                                                                                              |   |           | 45,700  |   |              |   | 46,940 |   |
| Investment      securities – available-for-sale                                                                                |   |           | 62,166  |   |              |   | 74,849 |   |
| Loans,      net of allowance for loan losses of                                                                                      |   |           |    |   |              |   |   |   |
| $11,647      at March 31, 2008 and $10,876 at December 31, 2007                                                                      |   |           | 484,915 |   |              |   | 497,971 |   |
| Loans      held-for-sale                                                                                                             |   |           | 873     |   |              |   | 1,343 |   |
| Stock      in Federal Home Loan Bank and other equity      securities,    at cost                                |   |           | 2,227   |   |              |   | 2,199 |   |
| Premises      and equipment, net                                                                                                     |   |           | 7,895   |   |              |   | 7,872 |   |
| Other      Real Estate Owned                                                                                                         |   |           | 1,215   |   |              |   | 879 |   |
| Accrued      interest receivable and other assets                                                                                    |   |           | 24,918  |   |              |   | 25,752 |   |
|        TOTAL ASSETS                                                                          |   | $              | 680,589 |   |              | $      | 709,895 |   |
|                                                                                                                                 |   |           |    |   |              |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                            |   |           |    |   |              |   |   |   |
| Liabilities                                                                                                                          |   |           |    |   |              |   |   |   |
|                                                                                                                                 |   |           |    |   |              |   |   |   |
| Deposits                                                                                                                             |   |           |    |   |              |   |   |   |
| Demand      deposits                                                                                                                 |   | $              | 179,132 |   |              | $      | 193,258 |   |
| Interest-bearing      transaction deposits                                                                                           |   |           | 127,761 |   |              |   | 135,381 |   |
| Savings      and MMDA's                                                                                                              |   |           | 178,603 |   |              |   | 178,137 |   |
| Time,      under $100,000                                                                                                            |   |           | 44,167  |   |              |   | 46,411 |   |
| Time,      $100,000 and over                                                                                                         |   |           | 70,955  |   |              |   | 69,484 |   |
|        Total deposits                                                                        |   |           | 600,618 |   |              |   | 622,671 |   |
| FHLB      Advances and other borrowings                                                                                              |   |           | 11,114  |   |              |   | 15,832 |   |
| Accrued      interest payable and other liabilities                                                                                  |   |           | 5,874   |   |              |   | 7,417 |   |
|        TOTAL LIABILITIES                                                                     |   |           | 617,606 |   |              |   | 645,920 |   |
|                                                                                                                                 |   |           |    |   |              |   |   |   |
| Stockholders'      equity                                                                                                            |   |           |    |   |              |   |   |   |
| Common      stock, no par value; 16,000,000 shares authorized;                                                                       |   |           |    |   |              |   |   |   |
| 8,250,828      shares issued and outstanding at March 31, 2008 and 8,169,772 shares      issued and outstanding at December 31, 2007 |   |           | 58,385  |   |              |   | 50,956 |   |
| Additional      paid in capital                                                                                                      |   |           | 977     |   |              |   | 977 |   |
| Retained      earnings                                                                                                               |   |           | 3,459   |   |              |   | 12,209 |   |
| Accumulated      other comprehensive income (loss)                                                                                   |   |           | 162     |   |              |   | (167 | ) |
|        TOTAL STOCKHOLDERS' EQUITY                                                       |   |           | 62,983  |   |              |   | 63,975 |   |
|                                                                                                                                 |   |           |    |   |              |   |   |   |
|        TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                             |   | $              | 680,589 |   |              | $      | 709,895 |   |

----

|                                                                                                                                                                                                                                                                                                                            |   | Three      months |   |   | Three      months |   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|--------|--------|-------------------|--------|
|                                                                                                                                                                                                                                                                                                                            |   | ended             |   |   | ended             |   |
|                                                                                                                                                                                                                                                                                                                            |   | March 31, 2008    |   |   | March 31, 2007    |   |
| Interest      and Dividend Income                                                                                                                                                                                                                                                                                          |   |              |   |   |              |   |
|      Loans                                                                                                                                                                                                                                                                                             |   | $                 | 9,240  |   |              | $      | 10,375 |   |
|      Federal funds sold                                                                                                                                                                                                                                                                      |   |              | 290    |   |              |   | 860 |   |
|      Due      from banks interest bearing                                                                                                                                                                                                                                                              |   |              | 268    |   |              |   | — |   |
|      Investment securities                                                                                                                                                                                                                                                                        |   |              |   |   |              |   |   |   |
|           Taxable                                                                                                                                                                                                                                                             |   |              | 498    |   |              |   | 650 |   |
|           Non-taxable                                                                                                                                                                                                                                                         |   |              | 358    |   |              |   | 278 |   |
|      Other      earning assets                                                                                                                                                                                                                                                                         |   |              | 29     |   |              |   | 29 |   |
|                Total interest      and dividend income                                                                                                                                                                                     |   |              | 10,683 |   |              |   | 12,192 |   |
|                                                                                                                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Interest Expense                                                                                                                                                                                                                                                                                                           |   |              |   |   |              |   |   |   |
|      Deposits                                                                                                                                                                                                                                                                                          |   |              | 1,912  |   |              |   | 2,892 |   |
|      Other borrowings                                                                                                                                                                                                                                                                             |   |              | 86     |   |              |   | 77 |   |
|                Total interest expense                                                                                                                                                                                                      |   |              | 1,998  |   |              |   | 2,969 |   |
|                Net interest income                                                                                                                                                                                                         |   |              | 8,685  |   |              |   | 9,223 |   |
| Provision      (recovery of provision) for  loan losses                                                                                                                                                                                                                                                          |   |              | 3,659  |   |              |   | (170 | ) |
|                                                                                                                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
|                Net interest income after provision      (recovery of provision)                    for loan losses |   |              | 5,026  |   |              |   | 9,393 |   |
|                                                                                                                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Other operating income                                                                                                                                                                                                                                                                                                |   |              |   |   |              |   |   |   |
|      Service charges on deposit accounts                                                                                                                                                                                                                                           |   |              | 924    |   |              |   | 793 |   |
|      Losses      on sales of other real estate owned                                                                                                                                                                                                                                    |   |              | (69    | )      |              |   | — |   |
|      Gains on sales of loans      held-for-sale                                                                                                                                                                                                                                    |   |              | 100    |   |              |   | 46 |   |
|      Investment and brokerage services income                                                                                                                                                                                                                                      |   |              | 177    |   |              |   | 67 |   |
|      Mortgage brokerage income                                                                                                                                                                                                                                                               |   |              | 1      |   |              |   | 69 |   |
|      Loan servicing income                                                                                                                                                                                                                                                                   |   |              | 47     |   |              |   | 75 |   |
|      Fiduciary      activities income                                                                                                                                                                                                                                                                  |   |              | 97     |   |              |   | 65 |   |
|      ATM fees                                                                                                                                                                                                                                                                                     |   |              | 69     |   |              |   | 66 |   |
|      Signature      based transaction fees                                                                                                                                                                                                                                                             |   |              | 139    |   |              |   | 114 |   |
|      Gains      on sales of available-for-sale securities                                                                                                                                                                                                                                              |   |              | 511    |   |              |   | — |   |
|      Other income                                                                                                                                                                                                                                                                                 |   |              | 207    |   |              |   | 203 |   |
|                Total other operating income                                                                                                                                                                                           |   |              | 2,203  |   |              |   | 1,498 |   |
|                                                                                                                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Other operating expenses                                                                                                                                                                                                                                                                                              |   |              |   |   |              |   |   |   |
|      Salaries and employee benefits                                                                                                                                                                                                                                                     |   |              | 4,107  |   |              |   | 4,473 |   |
|      Occupancy and equipment                                                                                                                                                                                                                                                                 |   |              | 912    |   |              |   | 998 |   |
|      Data processing                                                                                                                                                                                                                                                                              |   |              | 399    |   |              |   | 408 |   |
|      Stationery and supplies                                                                                                                                                                                                                                                                 |   |              | 116    |   |              |   | 146 |   |
|      Advertising                                                                                                                                                                                                                                                                                       |   |              | 175    |   |              |   | 211 |   |
|      Directors’ fees                                                                                                                                                                                                                                                                        |   |              | 52     |   |              |   | 54 |   |
|      Other      real estate owned expense                                                                                                                                                                                                                                                              |   |              | 9      |   |              |   | — |   |
|      Other expense                                                                                                                                                                                                                                                                                |   |              | 1,402  |   |              |   | 1,356 |   |
|                Total other operating expenses                                                                                                                                                                                         |   |              | 7,172  |   |              |   | 7,646 |   |
|                                                                                                                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
|                Income before income tax (benefit)      expense                                                                                                                                                                   |   |              | 57     |   |              |   | 3,245 |   |
| (Benefit)      provision for income taxes                                                                                                                                                                                                                                                                        |   |              | (3     | )      |              |   | 1,155 |   |
|                                                                                                                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
|                Net income                                                                                                                                                                                                                       |   | $                 | 60     |   |              | $      | 2,090 |   |
|                                                                                                                                                                                                                                                                                                                            |   |              |   |   |              |   |   |   |
| Basic Income per share                                                                                                                                                                                                                                                                                      |   | $                 | 0.01   |   |              | $      | 0.23 |   |
| Diluted Income per share                                                                                                                                                                                                                                                                                         |   | $                 | 0.01   |   |              | $      | 0.23 |   |

----

| (in      thousands, except share amounts)                                                                      |   |
|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                           |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   | Additional |   |   |   |   |   | Other |   |   |   |   |
|                                                                                                           |   | Common      Stock |   |   | Comprehensive |   |   | Paid-in |   |   | Retained |   |   | Comprehensive |   |   |   |   |
|                                                                                                           |   | Shares |   |   | Amounts |   |   | Income |   |   | Capital |   |   | Earnings |   |   | Income      (Loss) |   |   | Total |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at December 31, 2007                                                                              |   |   | 8,169,772 |   |   | $ | 50,956 |   |   |   |   |   | $ | 977 |   |   | $ | 12,209 |   |   | $ | (167 | ) |   | $ | 63,975 |   |
| Cumulative      effect of adoption of EITF 06-04                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (158 | ) |   |   |   |   |   |   | (158 | ) |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                |   |   |   |   |   |   |   |   |   | $ | 60 |   |   |   |   |   |   |   | 60 |   |   |   |   |   |   |   | 60 |   |
| Other      comprehensive loss:                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      holding losses on securities arising during the current period, net of tax      effect of $108 |   |   |   |   |   |   |   |   |   |   | (163 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification      adjustment due to gains realized on sales of securities, net of tax effect      of $204  |   |   |   |   |   |   |   |   |   |   | 307 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Directors’      and officers’ retirement plan equity adjustments, net of tax effect of      $124   |   |   |   |   |   |   |   |   |   |   | 185 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      other comprehensive gain, net of tax effect of $220                                                 |   |   |   |   |   |   |   |   |   |   | 329 |   |   |   |   |   |   |   |   |   |   |   | 329 |   |   |   | 329 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income                                                                                      |   |   |   |   |   |   |   |   |   | $ | 389 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 6%      stock dividend                                                                                         |   |   | 486,542 |   |   |   | 8,642 |   |   |   |   |   |   |   |   |   |   |   | (8,642 | ) |   |   |   |   |   |   | — |   |
| Cash      in lieu of fractional shares                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (10 | ) |   |   |   |   |   |   | (10 | ) |
| Stock-based      compensation and related tax benefits                                                         |   |   |   |   |   |   | 143 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 143 |   |
| Stock      options exercised, net of swapped shares                                                            |   |   | 1,670 |   |   |   | — |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | — |   |
| Stock      repurchase and retirement                                                                           |   |   | (85,278 | ) |   |   | (1,356 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,356 | ) |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at March 31, 2008                                                                                 |   |   | 8,572,706 |   |   | $ | 58,385 |   |   |   |   |   |   | $ | 977 |   |   | $ | 3,459 |   |   | $ | 162 |   |   | $ | 62,983 |   |

----

|                                                                                                                                                                                                       |   | (in      thousands)                    |    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                                                                                                                                                       |   | Three months ended      March 31, 2008 |    |   | Three      months ended March 31,      2007 |   |
| Operating      Activities                                                                                                                                                                                  |   |                                   |    |   |   |   |
|           Net Income                                                                                                                                |   | $                                      | 60      |   |   | $ | 2,090 |   |
|           Adjustments to reconcile net income to net      cash                                                             |   |                                   |    |   |   |   |   |   |
|  provided by operating activities:                                                                                                                                                     |   |                                   |    |   |   |   |   |   |
|  Depreciation      and amortization                                                                                                                                                                   |   |                                   | 264     |   |   |   | 337 |   |
|  Provision      for (recovery of provision) for loan losses                                                                                                                                           |   |                                   | 3,659   |   |   |   | (170 | ) |
|  Stock      plan accruals                                                                                                                                                                             |   |                                   | 123     |   |   |   | 181 |   |
|  Tax      benefit for stock options                                                                                                                                                                   |   |                                   | 20      |   |   |   | — |   |
|  Gains      on sales of available-for-sale securities                                                                                                                                                 |   |                                   | (511    | ) |   |   | — |   |
|  Loss      on sales of other real estate owned                                                                                                                                                        |   |                                   | 69      |   |   |   | — |   |
|  Gains      on sales of loans held-for-sale                                                                                                                                                           |   |                                   | (100    | ) |   |   | (46 | ) |
|  Proceeds      from sales of loans held-for-sale                                                                                                                                                      |   |                                   | 13,220  |   |   |   | 9,566 |   |
|  Originations      of loans held-for-sale                                                                                                                                                             |   |                                   | (12,650 | ) |   |   | (12,778 | ) |
|  Decrease      in accrued interest receivable and other assets                                                                                                                                        |   |                                   | 1,121   |   |   |   | 1,274 |   |
|  Decrease      in accrued interest payable and other liabilities                                                                                                                                      |   |                                   | (1,543  | ) |   |   | (2,455 | ) |
|                     Net cash      provided by (used in) operating activities       |   |                                   | 3,732   |   |   |   | (2,001 | ) |
|                                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Investing Activities                                                                                                                                                                                  |   |                                   |    |   |   |   |   |   |
|           Net decrease      (increase) in investment securities                                                                      |   |                                   | 13,098  |   |   |   | (5,942 | ) |
|           Net decrease in loans                                                                                                           |   |                                   | 9,397   |   |   |   | 13,011 |   |
|           Net      (increase) in other interest earning assets                                                                                      |   |                                   | (28     | ) |   |   | (29 | ) |
|           Net      (increase) in other real estate owned                                                                                            |   |                                   | (405    | ) |   |   | (1,100 | ) |
|           Purchases of premises and equipment, net                                                                              |   |                                   | (287    | ) |   |   | (502 | ) |
|                     Net cash      provided by investing activities                      |   |                                   | 21,775  |   |   |   | 5,438 |   |
|                                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Financing Activities                                                                                                                                                                                  |   |                                   |    |   |   |   |   |   |
|           Net      (decrease) increase in deposits                                                                                             |   |                                   | (22,053 | ) |   |   | 11,067 |   |
|           Net decrease in FHLB advances      and other borrowings                                                                    |   |                                   | (4,718  | ) |   |   | (820 | ) |
|           Cash dividends paid                                                                                                                  |   |                                   | (10     | ) |   |   | (13 | ) |
|           Tax      benefit for stock options                                                                                                             |   |                                   | (20     | ) |   |   | — |   |
|           Repurchase of stock                                                                                                                  |   |                                   | (1,356  | ) |   |   | (1,325 | ) |
|                     Net cash (used      in) provided by financing activities            |   |                                   | (28,157 | ) |   |   | 8,909 |   |
|                                                                                                                                                                                             |   |                                   |    |   |   |   |   |   |
|                     Net (decrease)      increase in cash and cash equivalents |   |                                   | (2,650  | ) |   |   | 12,346 |   |
| Cash and cash equivalents at beginning of period                                                                                                                        |   |                                   | 99,030  |   |   |   | 98,001 |   |
| Cash and cash equivalents at end of period                                                                                                                              |   | $                                      | 96,380  |   |   | $ | 110,347 |   |
|                                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                                                                                                                                |   |                                   |    |   |   |   |   |   |
| Cash paid during the period for:                                                                                                                                                  |   |                                   |    |   |   |   |   |   |
|                     Interest                                                                           |   | $                                      | 2,113   |   |   | $ | 2,958 |   |
|                     Income Taxes                                                                  |   |                                   | — |   |   | $ | 107 |   |
|                                                                                                                                                                                                       |   |                                   |    |   |   |   |   |   |
| Supplemental disclosures of non-cash investing and financing activities:                                                                                                |   |                                   |    |   |   |   |   |   |
| Transfer      of loans held-for-investment to other real estate owned                                                                                                                                      |   | $                                      | 406     |   |   | $ | 1,100 |   |
| Stock dividend distributed                                                                                                                                                                       |   | $                                      | 8,642   |   |   | $ | 10,851 |   |

----

| 1. | BASIS      OF PRESENTATION |
|----|----------------------------|

----

----

|                                                   |   | (in      thousands)                   |   |
|--------------------------------------------------------|--------|---------------------------------------|--------|
|                                                   |   |                                  |   |   |   |   |
|                                                   |   | Three      months endedMarch      31, |   |   | Year      ended December 31, |   |
|                                                   |   | 2008                                  |   |   | 2007 |   |   | 2007 |   |
| Balance,      beginning of period                      |   | $                                     | 10,876 |   |   | $ | 8,361 |   |   | $ | 8,361 |   |
| Provision      (recovery of provision) for loan losses |   |                                  | 3,659  |   |   |   | (170 | ) |   |   | 4,795 |   |
| Loan      charge-offs                                  |   |                                  | (3,066 | ) |   |   | (289 | ) |   |   | (3,060 | ) |
| Loan      recoveries                                   |   |                                  | 178    |   |   |   | 48 |   |   |   | 780 |   |
| Balance,      end of period                            |   | $                                     | 11,647 |   |   | $ | 7,950 |   |   | $ | 10,876 |   |

----

| 3. | MORTGAGE      OPERATIONS |
|----|--------------------------|

|                                                       |   | (in      thousands)    |    |
|------------------------------------------------------------|--------|------------------------|---------|
|                                                       |   | December      31, 2007 |    |   | Additions |   |   | Reductions |   |   | March      31, 2008 |   |
|                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |
| Mortgage      servicing rights                             |   | $                      | 956     |   |   | $ | 67 |   |   | $ | 49 |   |   | $ | 974 |   |
| Valuation      allowance                                   |   |                   | — |   |   |   | (44 | ) |   |   | — |   |   |   | (44 | ) |
| Mortgage      servicing rights, net of valuation allowance |   | $                      | 956     |   |   | $ | 23 |   |   | $ | 49 |   |   | $ | 930 |   |
|                                                       |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| 4. | OUTSTANDING      SHARES AND EARNINGS PER SHARE |
|----|------------------------------------------------|

|                                                     |   | (in      thousands, except share and earnings per share amounts) |      |
|----------------------------------------------------------|--------|------------------------------------------------------------------|-----------|
|                                                     |   | Three      months ended March 31,                                |      |
|                                                     |   | 2008                                                             |      |   | 2007 |   |
| Basic      earnings per share:                           |   |                                                             |      |   |   |   |
| Net      income                                          |   | $                                                                | 60        |   |   | $ | 2,090 |   |
|                                                     |   |                                                             |      |   |   |   |   |   |
| Weighted      average common shares outstanding          |   |                                                             | 8,617,104 |   |   |   | 8,918,403 |   |
| Basic      EPS                                           |   | $                                                                | 0.01      |   |   | $ | 0.23 |   |
|                                                     |   |                                                             |      |   |   |   |   |   |
| Diluted      earnings per share:                         |   |                                                             |      |   |   |   |   |   |
| Net      income                                          |   | $                                                                | 60        |   |   | $ | 2,090 |   |
|                                                     |   |                                                             |      |   |   |   |   |   |
| Weighted      average common shares outstanding          |   |                                                             | 8,617,104 |   |   |   | 8,918,403 |   |
|                                                     |   |                                                             |      |   |   |   |   |   |
| Effect      of dilutive options                          |   |                                                             | 185,938   |   |   |   | 275,496 |   |
|                                                     |   |                                                             |      |   |   |   |   |   |
| Adjusted      weighted average common shares outstanding |   |                                                             | 8,803,042 |   |   |   | 9,193,899 |   |
| Diluted      EPS                                         |   | $                                                                | 0.01      |   |   | $ | 0.23 |   |

----

| 5. | STOCK      PLANS |
|----|------------------|

|                                                       |   | Number      of Shares |    |   | Weighted      Average Exercise Price |   |   | Aggregate      Intrinsic Value |   |   | Weighted      Average Remaining Contractual Term (in years) |   |
|------------------------------------------------------------|--------|-----------------------|---------|--------|--------------------------------------|--------|--------|--------------------------------|--------|--------|------------------------------------------------------------------|--------|
| Options      outstanding at Beginning of  Period |   |                  | 542,221 |   |                                 | $      | 10.78  |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |
|    Granted                                  |   |                  | 31,464  |   |                                 | $      | 4.66   |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |
|    Cancelled      / Forfeited               |   |                  | (297    | )      |                                 | $      | 21.83  |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |
|    Exercised                                |   |                  | (2,153  | )      |                                 | $      | 3.12   |                           |   | $      | 24,187                                                           |   |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |   |
| Options      outstanding at End of Period                  |   |                  | 571,235 |   |                                 | $      | 10.47  |                           |   | $      | 2,736,320                                                        |   |   |   | 5.53 |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |   |   |
| Exercisable      (vested) at End of Period                 |   |                  | 440,883 |   |                                 | $      | 9.34   |                           |   | $      | 2,273,464                                                        |   |   |   | 4.68 |   |

|                                 |   | Three      Months Ended |   |
|--------------------------------------|--------|-------------------------|--------|
|                                 |   | March      31, 2008     |   |   |   |
|  Risk      Free Interest Rate   |   |                    | 2.76   | % |
|                                 |   |                    |   |   |
|  Expected      Dividend Yield   |   |                    | 0.0    | % |
|                                 |   |                    |   |   |
|  Expected      Life in Years    |   |                    | 5.0    |   |
|                                 |   |                    |   |   |
|  Expected      Price Volatility |   |                    | 27.92  | % |

----

|                                 |   | Three      Months Ended |   |
|--------------------------------------|--------|-------------------------|--------|
|                                 |   | March      31, 2008     |   |   |   |   |
|  Risk      Free Interest Rate   |   |                    | 3.28   | % |
|                                 |   |                    |   |   |
|  Expected      Dividend Yield   |   |                    | 0.00   | % |
|                                 |   |                    |   |   |
|  Expected      Life in Years    |   |                    | 1.00   |   |
|                                 |   |                    |   |   |
|  Expected      Price Volatility |   |                    | 31.90  | % |

----

| 6. | FIRST      NORTHERN BANK – EXECUTIVE SALARY CONTINUATION  PLAN |
|----|----------------------------------------------------------------------|

|                                         |   | Three      months ended March 31, |   |
|----------------------------------------------|--------|-----------------------------------|--------|
|                                         |   | 2008                              |   |   | 2007 |   |
| Components      of Net Periodic Benefit Cost |   |                              |   |   |   |   |
| Service      Cost                            |   | $                                 | 33,232 |   |   | $ | 30,383 |   |
| Interest  Cost                     |   |                              | 29,684 |   |   |   | 28,784 |   |
| Amortization      of prior service cost      |   |                              | 21,821 |   |   |   | 21,821 |   |
| Net      periodic benefit cost               |   | $                                 | 84,737 |   |   | $ | 80,988 |   |

----

| 7.              | FIRST      NORTHERN BANK – DIRECTORS’ RETIREMENTPLAN |
|----------------------------------------------------------------------------------|------------------------------------------------------------------|

|                                         |   | Three      months ended March 31, |    |
|----------------------------------------------|--------|-----------------------------------|---------|
|                                         |   | 2008                              |    |   | 2007 |   |
| Components      of Net Periodic Benefit Cost |   |                              |    |   |   |   |
| Service      Cost                            |   | $                                 | 14,424  |   |   | $ | 14,366 |   |
| Interest  Cost                     |   |                              | 7,731   |   |   |   | 6,736 |   |
| Amortization      of net loss                |   |                              | — |   |   |   | 121 |   |
| Net      periodic benefit cost               |   | $                                 | 22,155  |   |   | $ | 21,223 |   |

| 8.                   | FAIR      VALUE MEASUREMENT |
|----------------------------------------------------------------------------------|-----------------------------|

|                       | Level      1  |   | Valuation      is based upon quoted prices for identical instruments traded in active      markets.                                                                                                                                                                                                                                                                                                                                                                                                     |
|--------------------------------------------------------------------------------------------------------------------------------|--------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                           |               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                           | Level      2  |   | Valuation      is based upon quoted prices for similar instruments in active markets,      quoted prices for identical or similar instruments in markets that are not      active and model-based valuation techniques for which all significant      assumptions are observable or can be corroborated by observable market      data.                                                                                                                                                                 |
|                                                                                                                           |               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|                                                                                                                           | Level      3  |   | Valuation      is generated from model-based techniques that use at least one significant      assumption not observable in the market. These unobservable      assumptions reflect estimates of assumptions that market participants      would use in pricing the asset or liability. Valuation techniques      include use of option pricing models, discounted cash flow models and      similar techniques and include management judgment and estimation which      may be significant. |

----

----

|                                          |   |   |         |   |         |   |         |   |   |   |   |   |
|-----------------------------------------------|--------|--------|--------------|--------|--------------|--------|--------------|--------|--------|--------|--------|--------|
| (in      thousands)                           |   |   |         |   |         |   |         |   |
| March      31, 2008                           | Total  |   | Level      1 |   | Level      2 |   | Level      3 |   |
| Investment      securities available-for-sale |   | $      | 62,166       |   |         | $      | 6,331        |   |   | $      | 55,835 |   |   | $ | — |   |
|                                          |   |   |         |   |         |   |         |   |   |   |   |   |   |   |   |   |
| Total      assets at fair value               |   | $      | 62,166       |   |         | $      | 6,331        |   |   | $      | 55,835 |   |   | $ | — |   |
|                                          |   |   |         |   |         |   |         |   |   |   |   |   |   |   |   |   |

|                            |   |   |         |   |         |   |         |   |   |   |    |   |
|---------------------------------|--------|--------|--------------|--------|--------------|--------|--------------|--------|--------|--------|---------|--------|
| (in      thousands)             |   |   |         |   |         |   |         |   |
| March      31, 2008             | Total  |   | Level      1 |   | Level      2 |   | Level      3 |   |
| Impaired      loans             |   | $      | 14,555       |   |         | $      | —      |   |   | $      | — |   |   | $ | 14,555 |   |
| Loan      servicing rights      |   |   | 930          |   |         |   | —      |   |   |   | 930     |   |   |   | — |   |
|                            |   |   |         |   |         |   |         |   |   |   |    |   |   |   |   |   |
| Total      assets at fair value |   | $      | 15,485       |   |         | $      | —      |   |   | $      | 930     |   |   | $ | 14,555 |   |
|                            |   |   |         |   |         |   |         |   |   |   |    |   |   |   |   |   |

----

----

----

|                                                                                      |   | (in      thousands) |    |
|-------------------------------------------------------------------------------------------|--------|---------------------|---------|
|                                                                                      |   |                |    |
|                                                                                      |   | Three      months   |    |   | Three      months |   |
|                                                                                      |   | ended               |    |   | ended |   |
|                                                                                      |   | March      31, 2008 |    |   | March      31, 2007 |   |
| For      the Period:                                                                      |   |                |    |   |   |   |
|                                                                                      |   |                |    |   |   |   |
|     Net      Income                                                   |   | $                   | 60      |   |   | $ | 2,090 |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|     Basic      Earnings Per Share*                                    |   | $                   | 0.01    |   |   | $ | 0.23 |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|     Diluted      Earnings Per Share*                                  |   | $                   | 0.01    |   |   | $ | 0.23 |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|     Return      on Average Assets                                     |   |                | 0.03    | % |   |   | 1.22 | % |
|                                                                                      |   |                |    |   |   |   |   |   |
|     Net      Income / Beginning Equity                                |   |                | 0.38    | % |   |   | 13.49 | % |
|                                                                                      |   |                |    |   |   |   |   |   |
| At      Period End:                                                                       |   |                |    |   |   |   |   |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|       Total      Assets                                     |   | $                   | 680,589 |   |   | $ | 693,973 |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|       Total      Loans, Net (including loans held-for-sale) |   | $                   | 485,788 |   |   | $ | 470,426 |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|      Total      Investment Securities                            |   | $                   | 62,166  |   |   | $ | 80,136 |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|      Total      Deposits                                         |   | $                   | 600,618 |   |   | $ | 614,749 |   |
|                                                                                      |   |                |    |   |   |   |   |   |
|      Loan-To-Deposit      Ratio                                  |   |                | 80.9    | % |   |   | 76.5 | % |
|                                                                                      |   |                |    |   |   |   |   |   |
|                                                                                      |   |                |    |   |   |   |   |   |
| *Adjusted      for stock dividends                                                        |   |                |    |   |   |   |   |   |
|                                                                                      |   |                |    |   |   |   |   |   |

----

|                                                                                                                                                                                                                       |   | Three      months ended |    |   | Three      months ended |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                                                                                                                                                                                                                       |   | March      31, 2008     |    |   | March      31, 2007     |   |
|                                                                                                                                                                                                                       |   | Average                 |    |   |                    |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                                                                                                                                                                                       |   | Balance                 |    |   | Interest                |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Assets                                                                                                                                                                                                                     |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning      assets:                                                                                                                                                                                              |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      (1)                                                                                                                                                                                                             |   | $                       | 487,786 |   |                    | $      | 9,240 |   |   |   | 7.60 | % |   | $ | 478,034 |   |   | $ | 10,375 |   |   |   | 8.80 | % |
| Federal      funds sold                                                                                                                                                                                                    |   |                    | 39,190  |   |                    |   | 290 |   |   |   | 2.97 | % |   |   | 67,035 |   |   |   | 860 |   |   |   | 5.20 | % |
| Interest      bearing due from banks                                                                                                                                                                                       |   |                    | 22,808  |   |                    |   | 268 |   |   |   | 4.71 | % |   |   | — |   |   |   | — |   |   |   | — |   |
| Investment      securities, taxable                                                                                                                                                                                        |   |                    | 40,669  |   |                    |   | 498 |   |   |   | 4.91 | % |   |   | 53,423 |   |   |   | 650 |   |   |   | 4.93 | % |
| Investment      securities, non-taxable  (2)                                                                                                                                                                     |   |                    | 34,332  |   |                    |   | 358 |   |   |   | 4.18 | % |   |   | 25,789 |   |   |   | 278 |   |   |   | 4.37 | % |
| Other      interest earning assets                                                                                                                                                                                         |   |                    | 2,200   |   |                    |   | 29 |   |   |   | 5.29 | % |   |   | 2,107 |   |   |   | 29 |   |   |   | 5.58 | % |
| Total      interest-earning assets                                                                                                                                                                                         |   |                    | 626,985 |   |                    |   | 10,683 |   |   |   | 6.83 | % |   |   | 626,388 |   |   |   | 12,192 |   |   |   | 7.89 | % |
| Non-interest-earning      assets:                                                                                                                                                                                          |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                                                                                                               |   |                    | 25,140  |   |                    |   |   |   |   |   |   |   |   |   | 27,202 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                                                                                                                           |   |                    | 7,961   |   |                    |   |   |   |   |   |   |   |   |   | 8,246 |   |   |   |   |   |   |   |   |   |
| Other      real estate owned                                                                                                                                                                                               |   |                    | 1,042   |   |                    |   |   |   |   |   |   |   |   |   | 1,248 |   |   |   |   |   |   |   |   |   |
| Accrued      interest receivable and other assets                                                                                                                                                                          |   |                    | 24,895  |   |                    |   |   |   |   |   |   |   |   |   | 21,601 |   |   |   |   |   |   |   |   |   |
| Total      average assets                                                                                                                                                                                                  |   |                    | 686,023 |   |                    |   |   |   |   |   |   |   |   |   | 684,685 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                       |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Stockholders’ Equity:                                                                                                                                                                           |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                                                                                                                                                         |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      transaction deposits                                                                                                                                                                                 |   |                    | 130,753 |   |                    |   | 324 |   |   |   | 0.99 | % |   |   | 123,278 |   |   |   | 736 |   |   |   | 2.42 | % |
| Savings      and MMDA’s                                                                                                                                                                                              |   |                    | 178,334 |   |                    |   | 568 |   |   |   | 1.28 | % |   |   | 182,121 |   |   |   | 1,080 |   |   |   | 2.40 | % |
| Time,      under $100,000                                                                                                                                                                                                  |   |                    | 44,809  |   |                    |   | 333 |   |   |   | 2.98 | % |   |   | 47,397 |   |   |   | 381 |   |   |   | 3.26 | % |
| Time,      $100,000 and over                                                                                                                                                                                               |   |                    | 70,568  |   |                    |   | 687 |   |   |   | 3.90 | % |   |   | 68,898 |   |   |   | 695 |   |   |   | 4.09 | % |
| FHLB      advances and other borrowings                                                                                                                                                                                    |   |                    | 10,393  |   |                    |   | 86 |   |   |   | 3.32 | % |   |   | 10,400 |   |   |   | 77 |   |   |   | 3.00 | % |
| Total      interest-bearing liabilities                                                                                                                                                                                    |   |                    | 434,857 |   |                    |   | 1,998 |   |   |   | 1.84 | % |   |   | 432,094 |   |   |   | 2,969 |   |   |   | 2.79 | % |
| Non-interest-bearing      liabilities:                                                                                                                                                                                     |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing      demand deposits                                                                                                                                                                                  |   |                    | 179,420 |   |                    |   |   |   |   |   |   |   |   |   | 183,430 |   |   |   |   |   |   |   |   |   |
| Accrued      interest payable and other liabilities                                                                                                                                                                        |   |                    | 6,444   |   |                    |   |   |   |   |   |   |   |   |   | 7,144 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                                                                                                                                     |   |                    | 620,721 |   |                    |   |   |   |   |   |   |   |   |   | 622,668 |   |   |   |   |   |   |   |   |   |
| Total      stockholders’ equity                                                                                                                                                                                      |   |                    | 65,302  |   |                    |   |   |   |   |   |   |   |   |   | 62,017 |   |   |   |   |   |   |   |   |   |
| Total      average liabilities and stockholders’ equity                                                                                                                                                              |   | $                       | 686,023 |   |                    |   |   |   |   |   |   |   |   | $ | 684,685 |   |   |   |   |   |   |   |   |   |
| Net      interest income and net interest margin (3)                                                                                                                                                                       |   |                    |    |   |                    | $      | 8,685 |   |   |   | 5.56 | % |   |   |   |   |   | $ | 9,223 |   |   |   | 5.97 | % |
|                                                                                                                                                                                                                       |   |
| 1. Average      balances for loans include loans held-for-sale and non-accrual loans and      are net of the allowance for loan losses, but non-                                                                      |   |
|          accrued interest thereon is excluded. Loan interest income includes      loan fees of approximately $713 and $644 for the three months ended      March 31, 2009 and 2007, respectively. |   |
| 2. Interest      income and yields on tax-exempt securities are not presented on a taxable      equivalent basis.                                                                                                     |   |
| 3. Net      interest margin is computed by dividing net interest income by total      average interest-earning assets.                                                                                                |   |

----

----

----

----

|                                                                    |   | (in      thousands) |   |
|-------------------------------------------------------------------------|--------|---------------------|--------|
|                                                                    |   |                |   |
|                                                                    |   | Three      months   |   |   | Three      months |   |
|                                                                    |   | ended               |   |   | ended |   |
|                                                                    |   | March      31, 2008 |   |   | March      31, 2007 |   |
| Other      miscellaneous operating expenses                             |   |                |   |   |   |   |
| Provision      (recovery of provision) for unfunded lending commitments |   | $                   | (41    | ) |   | $ | 50 |   |
| FDIC      assessments                                                   |   |                | 120    |   |   |   | 17 |   |
| Contributions                                                           |   |                | 23     |   |   |   | 52 |   |
| Legal      fees                                                         |   |                | 69     |   |   |   | 71 |   |
| Accounting      and audit fees                                          |   |                | 246    |   |   |   | 126 |   |
| Consulting      fees                                                    |   |                | 105    |   |   |   | 96 |   |
| Postage      expense                                                    |   |                | 65     |   |   |   | 85 |   |
| Telephone      expense                                                  |   |                | 64     |   |   |   | 61 |   |
| Public      relations                                                   |   |                | 104    |   |   |   | 79 |   |
| Training      expense                                                   |   |                | 61     |   |   |   | 77 |   |
| Loan      origination expense                                           |   |                | 100    |   |   |   | 214 |   |
| Computer      software depreciation                                     |   |                | 61     |   |   |   | 57 |   |
| Other      miscellaneous expense                                        |   |                | 425    |   |   |   | 371 |   |
|                                                                    |   |                |   |   |   |   |   |   |
| Total      other miscellaneous operating expenses                       |   | $                   | 1,402  |   |   | $ | 1,356 |   |
|                                                                    |   |                |   |   |   |   |   |   |

----

|                                                                     |   |                |    |
|--------------------------------------------------------------------------|--------|---------------------|---------|
|                                                                     |   | (in      thousands) |    |
| Balance      at January 1, 2008                                          |   | $                   | 122     |   |
| Additions      for tax positions taken in the current period             |   |                | — |   |
| Reductions      for tax positions taken in the current period            |   |                | — |   |
| Additions      for tax positions taken in prior years                    |   |                | — |   |
| Reductions      for tax positions taken in prior years                   |   |                | — |   |
| Decreases  related      to settlements with taxing authorities |   |                | — |   |
| Decreases      as a result of a lapse in statue of limitations           |   |                | — |   |
|                                                                     |   |                |    |   |
| Balance      at March 31, 2008                                           |   | $                   | 122     |   |

|                                                                                                                                                                                                                                                                 (in thousands) |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | March      31, 2008 |   |   | December      31, 2007 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |
| Undisbursed      loan commitments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |   | 189,910 |   |   | $ | 214,274 |   |
| Standby      letters of credit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   | 15,002 |   |   |   | 15,188 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | $ | 204,912 |   |   | $ | 229,462 |   |

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| Analysis      of the Allowance for Loan Losses         |   |
|--------------------------------------------------------|--------|
| (Amounts      in thousands, except percentage amounts) |   |
|                                                   |   |   |   |   |   |   |
|                                                   |   | Three      months endedMarch      31, |   |   | Year      endedDecember      31, |   |
|                                                   |   | 2008 |   |   | 2007 |   |   | 2007 |   |
|                                                   |   |   |   |   |   |   |   |   |   |
| Balance      at beginning of period                    |   | $ | 10,876 |   |   | $ | 8,361 |   |   | $ | 8,361 |   |
| Provision      (recovery of provision) for loan losses |   |   | 3,659 |   |   |   | (170 | ) |   |   | 4,795 |   |
| Loans      charged-off:                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                             |   |   | (184 | ) |   |   | (41 | ) |   |   | (1,428 | ) |
| Agriculture                                            |   |   | — |   |   |   | — |   |   |   | (82 | ) |
| Real      estate mortgage                              |   |   | (82 | ) |   |   | (120 | ) |   |   | (249 | ) |
| Real      estate construction                          |   |   | (2,696 | ) |   |   | — |   |   |   | (537 | ) |
| Installment      loans to individuals                  |   |   | (104 | ) |   |   | (128 | ) |   |   | (764 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      charged-off                                 |   |   | (3,066 | ) |   |   | (289 | ) |   |   | (3,060 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                             |   |   | 4 |   |   |   | 1 |   |   |   | 256 |   |
| Agriculture                                            |   |   | 50 |   |   |   | — |   |   |   | 200 |   |
| Real      estate mortgage                              |   |   | 32 |   |   |   | — |   |   |   | — |   |
| Installment      loans to individuals                  |   |   | 92 |   |   |   | 47 |   |   |   | 324 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      recoveries                                  |   |   | 178 |   |   |   | 48 |   |   |   | 780 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      charge-offs                                   |   |   | (2,888 | ) |   |   | (241 | ) |   |   | (2,280 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at end of period                          |   | $ | 11,647 |   |   | $ | 7,950 |   |   | $ | 10,876 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio      of net charge-offs                          |   |   |   |   |   |   |   |   |   |   |   |   |
| To      average loans outstanding during the period    |   |   | (0.58 | %) |   |   | (0.05 | %) |   |   | (0.45 | %) |
| Allowance      for loan losses                         |   |   |   |   |   |   |   |   |   |   |   |   |
| To      total loans at the end of the period           |   |   | 2.35 | % |   |   | 1.69 | % |   |   | 2.14 | % |
| To      non-performing loans at the end of the period  |   |   | 61.39 | % |   |   | 270.96 | % |   |   | 70.46 | % |

----

| (in      thousands)              |
|----------------------------------|
|                             |   | March      31, 2008 |   |   |        December      31, 2007 |   |   |
| Three      months or less        |   | $ | 22,793 |   |   | $ | 29,632 |   |
| Over      three to twelve months |   |   | 42,808 |   |   |   | 34,161 |   |
| Over      twelve months          |   |   | 5,354 |   |   |   | 5,691 |   |
| Total                            |   | $ | 70,955 |   |   | $ | 69,484 |   |

|                   |   | (amounts      in thousands except percentage amounts) |   |
|------------------------|--------|-------------------------------------------------------|--------|
|                   |   | Actual                                                |   |   | Well      Capitalized |   |   |   |   |
|                   |   |                                                  |   |   |   |   |   | Ratio |   |   | Minimum |   |
|                   |   | Capital                                               |   |   | Ratio |   |   | Requirement |   |   | Capital |   |
| Leverage               |   | $                                                     | 62,145 |   |   |   | 9.04 | % |   |   | 5.0 | % |   |   | 4.0 | % |
| Tier      1 Risk-Based |   | $                                                     | 62,145 |   |   |   | 10.87 | % |   |   | 6.0 | % |   |   | 4.0 | % |
| Total      Risk-Based  |   | $                                                     | 69,357 |   |   |   | 12.14 | % |   |   | 10.0 | % |   |   | 8.0 | % |

| Return on Equity and Assets                |   |
|--------------------------------------------|--------|
|                                       |   |   |   |   |   |   |   |   |   |
|                                       |   | Three      months endedMarch      31, 2008 |   |   | Three      months endedMarch      31, 2007 |   |   | Year      endedDecember      31, 2007 |   |
| Annualized      return on average assets   |   |   | 0.03 | % |   |   | 1.22 | % |   |   | 1.05 | % |
|                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| Annualized      return on beginning equity |   |   | 0.38 | % |   |   | 13.49 | % |   |   | 11.75 | % |

----

----

|                                      |   | (a)                                  |   |   | (b)                                   |   |   | (c)                                                                                 |   |   | (d)                                                                                      |   |
|-------------------------------------------|--------|--------------------------------------|--------|--------|---------------------------------------|--------|--------|-------------------------------------------------------------------------------------|--------|--------|------------------------------------------------------------------------------------------|--------|
| Period                                    |   | Total      number of sharespurchased |   |   | Average      pricepaid      per share |   |   | Number      of shares purchased as part of publicly announcedplans      or programs |   |   | Maximum      number of shares that may yet be purchased under the plans or      programs |   |
| January      1 - January 31, 2008         |   |                                 | 3,465  |   |                                  | $      | 15.86  |                                                                                |   |   | 3,465                                                                                    |   |   |   | 86,293 |   |
| February      1 – February 29, 2008 |   |                                 | 51,156 |   |                                  | $      | 15.87  |                                                                                |   |   | 51,156                                                                                   |   |   |   | 35,137 |   |
| March      1 – March 31, 2008       |   |                                 | 33,749 |   |                                  | $      | 14.50  |                                                                                |   |   | 33,749                                                                                   |   |   |   | 1,388 |   |
| Total                                     |   |                                 | 88,370 |   |                                  | $      | 15.35  |                                                                                |   |   | 88,370                                                                                   |   |   |   | 1,388 |   |

----

| ExhibitNumber | Exhibit                                                                                                                                                             |
|---------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|          |                                                                                                                                                                |
| 31.1          | Certification      of the Company’s Chief Executive Officer pursuant to Section 302 of the      Sarbanes-Oxley      Act of 2002                               |
| 31.2          | Certification      of the Company’s Chief Financial Officer pursuant to Section 302 of the      Sarbanes-Oxley      Act of 2002                               |
| 32.1          | Certification      of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as      adopted pursuantto      Section 906 of the Sarbanes-Oxley Act of 2002 |
| 32.2          | Certification      of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as      adopted pursuantto      Section 906 of the Sarbanes-Oxley Act of2002  |

|   |             |   | FIRST      NORTHERN COMMUNITY BANCORP                                              |
|--------|------------------|--------|------------------------------------------------------------------------------------|
|   |             |   |                                                                               |
| Date:  | May      9, 2008 | by     | /s/  Louise      A. Walker                                               |
|   |             |   |                                                                               |
|   |             |   | Louise      A. Walker, Sr. Executive Vice President / Chief Financial      Officer |
|   |             |   | (Principal      Financial Officer and Duly AuthorizedOfficer)                      |

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