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

|  |   | 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   ̈ |
|------------------|----------------------|

| Yes  r | No  r |
|------------------|-----------------|

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

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

----

| Page                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| PART      I   – Financial      Information                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| ITEM I    – Financial      Statements      (Unaudited) .....................................................................................................................................................................................................................................................3Condensed Consolidated Balance      Sheets ...................................................................................................................................................................................................................................................3Condensed Consolidated Statements of      Operations ................................................................................................................................................................................................................................4Condensed Consolidated Statement of Stockholders'      Equity and Comprehensive      Income ...............................................................................................................................................................5Condensed Consolidated Statements of Cash      Flows ...............................................................................................................................................................................................................................6Notes to Condensed Consolidated Financial      Statements ........................................................................................................................................................................................................................7ITEM 2.   – Management’s Discussion      and Analysis of Financial Condition and Results of      Operations ............................................................................................................................................36ITEM 3.   – Quantitative and      Qualitative Disclosures about Market      Risk ..................................................................................................................................................................................................44ITEM 4.   – Controls and      Procedures ................................................................................................................................................................................................................................................................44PART II   – Other      Information ............................................................................................................................................................................................................................................................................44ITEM 1A. – Risk      Factors .....................................................................................................................................................................................................................................................................................44ITEM 6.   –      Exhibits ..............................................................................................................................................................................................................................................................................................44SIGNATURES .......................................................................................................................................................................................................................................................................................................44 |

----

|                                                                                                                                                        |   | September      30, |    |   | December      31, |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|
| (in thousands, except      share amounts)                                                                                                                   |   | 2009               |    |   | 2008              |   |
|                                                                                                                                                        |   | (unaudited)        |    |   |              |   |
| Assets                                                                                                                                                      |   |               |    |   |              |   |
|                                                                                                                                                        |   |               |    |   |              |   |
| Cash      and due from banks                                                                                                                                |   | $                  | 112,922 |   |              | $      | 25,150 |   |
| Federal      funds sold                                                                                                                                     |   |               | — |   |              |   | 40,860 |   |
| Investment      securities – available-for-sale                                                                                                       |   |               | 87,218  |   |              |   | 42,106 |   |
| Loans,      net of allowance for loan losses of $14,179 at September 30,      2009                                                                          |   |               |    |   |              |   |   |   |
|    and      $14,435 at December 31, 2008                                                                                                     |   |               | 482,390 |   |              |   | 516,968 |   |
| Loans      held-for-sale                                                                                                                                    |   |               | 3,219   |   |              |   | 2,192 |   |
| Stock      in Federal Home Loan Bank and other equity securities, at    cost                                                                                |   |               | 2,506   |   |              |   | 2,311 |   |
| Premises      and equipment, net                                                                                                                            |   |               | 7,385   |   |              |   | 7,620 |   |
| Other      Real Estate Owned                                                                                                                                |   |               | 4,748   |   |              |   | 4,368 |   |
| Accrued      interest receivable and other assets                                                                                                           |   |               | 29,568  |   |              |   | 29,227 |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
|                  Total      Assets                                     |   | $                  | 729,956 |   |              | $      | 670,802 |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
| Liabilities      and Stockholders’ Equity                                                                                                             |   |               |    |   |              |   |   |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
| Liabilities:                                                                                                                                                |   |               |    |   |              |   |   |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
|          Demand      deposits                                                                                  |   | $                  | 168,287 |   |              | $      | 181,600 |   |
|          Interest-bearing      transaction deposits                                                            |   |               | 124,228 |   |              |   | 123,614 |   |
|          Savings      and MMDA's                                                                               |   |               | 180,865 |   |              |   | 155,656 |   |
|          Time,      under $100,000                                                                             |   |               | 57,938  |   |              |   | 64,252 |   |
|          Time,      $100,000 and over                                                                          |   |               | 98,874  |   |              |   | 59,596 |   |
|                  Total deposits                                   |   |               | 630,192 |   |              |   | 584,718 |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
|          FHLB      Advances and other borrowings                                                               |   |               | 11,876  |   |              |   | 18,259 |   |
|          Accrued      interest payable and other liabilities                                                   |   |               | 6,425   |   |              |   | 5,796 |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
|                  Total      liabilities                                |   |               | 648,493 |   |              |   | 608,773 |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
| Stockholders'      Equity:                                                                                                                                  |   |               |    |   |              |   |   |   |
|          Preferred      stock, par value $0.01 per share; $1,000 per share    liquidation                      |   |               |    |   |              |   |   |   |
| preference,      18,500 shares authorized; 17,390 shares issued and                                                                                         |   |               |    |   |              |   |   |   |
| outstanding      at September 30, 2009 and none at December 31, 2008                                                                                        |   |               | 16,791  |   |              |   | — |   |
|         Common      stock, no par value; 16,000,000 shares authorized;                                              |   |               |    |   |              |   |   |   |
|             8,973,645      shares issued and outstanding at September 30, 2009 and              |   |               |    |   |              |   |   |   |
|             8,608,802      shares issued and outstanding at December 31, 2008                   |   |               | 62,185  |   |              |   | 58,983 |   |
|         Additional      paid in capital                                                                             |   |               | 977     |   |              |   | 977 |   |
|         Retained      earnings                                                                                      |   |               | 789     |   |              |   | 2,026 |   |
|         Accumulated      other comprehensive income                                                                 |   |               | 721     |   |              |   | 43 |   |
|                  Total      stockholders’ equity                 |   |               | 81,463  |   |              |   | 62,029 |   |
|                                                                                                                                                        |   |               |    |   |              |   |   |   |
|                  Total      Liabilities and Stockholders’ Equity |   | $                  | 729,956 |   |              | $      | 670,802 |   |

----

|                                                                                                                                                      |   | Three      months       |    |   | Three      months       |   |    | Nine      months        |   |   | Nine      months        |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|---------|-------------------------|--------|--------|-------------------------|--------|
|                                                                                                                                                      |   | ended                   |    |   | ended                   |   |    | ended                   |   |   | ended                   |   |
| (in      thousands, except per share amounts)                                                                                                             |   | September      30, 2009 |    |   | September      30, 2008 |   |    | September      30, 2009 |   |   | September      30, 2008 |   |
| Interest      and Dividend Income:                                                                                                                   |   |                    |    |   |                    |   |    |                    |   |   |                    |   |
|      Loans                                                                                                                       |   | $                       | 7,545   |   |                    | $      | 9,062   |                    |   | $      | 23,315                  |   |   | $ | 26,842 |   |
|      Federal funds sold                                                                                                |   |                    | 19      |   |                    |   | 70      |                    |   |   | 58                      |   |   |   | 487 |   |
|      Due      from banks interest bearing accounts                                                                               |   |                    | 28      |   |                    |   | 109     |                    |   |   | 88                      |   |   |   | 521 |   |
|      Investment securities                                                                                                  |   |                    |    |   |                    |   |    |                    |   |   |                    |   |   |   |   |   |
|           Taxable                                                                                       |   |                    | 353     |   |                    |   | 282     |                    |   |   | 820                     |   |   |   | 1,122 |   |
|           Non-taxable                                                                                   |   |                    | 247     |   |                    |   | 300     |                    |   |   | 765                     |   |   |   | 986 |   |
|      Other      earning assets                                                                                                   |   |                    | 4       |   |                    |   | 33      |                    |   |   | 10                      |   |   |   | 99 |   |
|                Total interest      and dividend income               |   |                    | 8,196   |   |                    |   | 9,856   |                    |   |   | 25,056                  |   |   |   | 30,057 |   |
| Interest Expense:                                                                                                                                    |   |                    |    |   |                    |   |    |                    |   |   |                    |   |   |   |   |   |
|      Deposits                                                                                                                    |   |                    | 1,155   |   |                    |   | 1,282   |                    |   |   | 3,288                   |   |   |   | 4,635 |   |
|      Other borrowings                                                                                                       |   |                    | 109     |   |                    |   | 247     |                    |   |   | 390                     |   |   |   | 394 |   |
|                Total interest expense                                |   |                    | 1,264   |   |                    |   | 1,529   |                    |   |   | 3,678                   |   |   |   | 5,029 |   |
| Net interest income                                                                                                                             |   |                    | 6,932   |   |                    |   | 8,327   |                    |   |   | 21,378                  |   |   |   | 25,028 |   |
| Provision      for  loan losses                                                                                                            |   |                    | 1,661   |   |                    |   | 3,638   |                    |   |   | 3,928                   |   |   |   | 10,060 |   |
|  Net interest income after provision    for loan losses                                            |   |                    | 5,271   |   |                    |   | 4,689   |                    |   |   | 17,450                  |   |   |   | 14,968 |   |
| Other operating income:                                                                                                                         |   |                    |    |   |                    |   |    |                    |   |   |                    |   |   |   |   |   |
|      Service charges on deposit accounts                                                                     |   |                    | 909     |   |                    |   | 952     |                    |   |   | 2,653                   |   |   |   | 2,805 |   |
|      Gains      on other real estate owned                                                                                  |   |                    | — |   |                    |   | 78      |                    |   |   | 4                       |   |   |   | 78 |   |
|      Gains on sales of loans      held-for-sale                                                              |   |                    | 146     |   |                    |   | 29      |                    |   |   | 720                     |   |   |   | 203 |   |
|      Investment and brokerage services income                                                                |   |                    | 334     |   |                    |   | 251     |                    |   |   | 657                     |   |   |   | 635 |   |
|      Mortgage brokerage income                                                                                         |   |                    | 22      |   |                    |   | 3       |                    |   |   | 65                      |   |   |   | 16 |   |
|      Loan servicing income                                                                                             |   |                    | 350     |   |                    |   | 30      |                    |   |   | 709                     |   |   |   | 189 |   |
|      Fiduciary      activities income                                                                                            |   |                    | 60      |   |                    |   | 72      |                    |   |   | 216                     |   |   |   | 245 |   |
|      ATM fees                                                                                                               |   |                    | 60      |   |                    |   | 61      |                    |   |   | 182                     |   |   |   | 199 |   |
|      Signature      based transaction fees                                                                                       |   |                    | 175     |   |                    |   | 153     |                    |   |   | 478                     |   |   |   | 444 |   |
|           Gains on sales of      available-for-sale          securities             |   |                    | 4       |   |                    |   | 29      |                    |   |   | 268                     |   |   |   | 524 |   |
|      Other income                                                                                                           |   |                    | 192     |   |                    |   | 188     |                    |   |   | 507                     |   |   |   | 583 |   |
|                Total other operating income                     |   |                    | 2,252   |   |                    |   | 1,846   |                    |   |   | 6,459                   |   |   |   | 5,921 |   |
| Other operating expenses:                                                                                                                       |   |                    |    |   |                    |   |    |                    |   |   |                    |   |   |   |   |   |
|      Salaries and employee benefits                                                                               |   |                    | 3,817   |   |                    |   | 3,650   |                    |   |   | 11,471                  |   |   |   | 11,716 |   |
|      Occupancy and equipment                                                                                           |   |                    | 950     |   |                    |   | 913     |                    |   |   | 2,888                   |   |   |   | 2,777 |   |
|      Data processing                                                                                                        |   |                    | 458     |   |                    |   | 436     |                    |   |   | 1,347                   |   |   |   | 1,254 |   |
|      Stationery and supplies                                                                                           |   |                    | 74      |   |                    |   | 83      |                    |   |   | 293                     |   |   |   | 370 |   |
|      Advertising                                                                                                                 |   |                    | 154     |   |                    |   | 137     |                    |   |   | 467                     |   |   |   | 503 |   |
|      Directors’ fees                                                                                                  |   |                    | 55      |   |                    |   | 53      |                    |   |   | 158                     |   |   |   | 158 |   |
|      Other      real estate owned expense and write-downs                                                                        |   |                    | 135     |   |                    |   | 843     |                    |   |   | 1,464                   |   |   |   | 1,530 |   |
|      Other expense                                                                                                          |   |                    | 1,518   |   |                    |   | 1,021   |                    |   |   | 4,859                   |   |   |   | 3,979 |   |
|                Total other operating expenses                   |   |                    | 7,161   |   |                    |   | 7,136   |                    |   |   | 22,947                  |   |   |   | 22,287 |   |
|                     Income (loss) before benefit    for income taxes |   |                    | 362     |   |                    |   | (601    | )                       |   |   | 962                     |   |   |   | (1,398 | ) |
| Benefit for income taxes                                                                                                                   |   |                    | (169    | )      |                    |   | (1,573  | )                       |   |   | (598                    | )      |   |   | (1,566 | ) |
|                                                                                                                                                      |   |                    |    |   |                    |   |    |                    |   |   |                    |   |   |   |   |   |
|                Net  income                                           |   | $                       | 531     |   |                    | $      | 972     |                    |   | $      | 1,560                   |   |   | $ | 168 |   |
|                                                                                                                                                      |   |                    |    |   |                    |   |    |                    |   |   |                    |   |   |   |   |   |
| Preferred      stock dividends and accretion                                                                                                              |   | $                       | (249    | )      |                    |   | — |                    |   | $      | (544                    | )      |   |   | — |   |
| Net  income      available to      common          shareholders                               |   | $                       | 282     |   |                    | $      | 972     |                    |   | $      | 1,016                   |   |   | $ | 168 |   |
|                                                                                                                                                      |   |                    |    |   |                    |   |    |                    |   |   |                    |   |   |   |   |   |
| Basic      income per share                                                                                                                     |   | $                       | 0.03    |   |                    | $      | 0.11    |                    |   | $      | 0.11                    |   |   | $ | 0.02 |   |
| Diluted income      per share                                                                                                                   |   | $                       | 0.03    |   |                    | $      | 0.11    |                    |   | $      | 0.11                    |   |   | $ | 0.02 |   |

----

| (in      thousands, except share amounts)                                                                      |   |
|----------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                           |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | Accumulated |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   | Additional |   |   |   |   |   | Other |   |   |   |   |
|                                                                                                           |   | Preferred |   |   | Common      Stock |   |   | Comprehensive |   |   | Paid-in |   |   | Retained |   |   | Comprehensive |   |   |   |   |
|                                                                                                           |   | Stock |   |   | Shares |   |   | Amounts |   |   | Income |   |   | Capital |   |   | Earnings |   |   | Loss |   |   | Total |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at December 31, 2008                                                                              |   | $ | — |   |   |   | 8,608,802 |   |   | $ | 58,983 |   |   |   |   |   | $ | 977 |   |   | $ | 2,026 |   |   | $ | 43 |   |   | $ | 62,029 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 1,560 |   |   |   |   |   |   |   | 1,560 |   |   |   |   |   |   |   | 1,560 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other      comprehensive income,  net of tax:                                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unrealized      holding losses on securities arising during the current period, net of tax      effect of $560 |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 839 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Reclassification      adjustment due to gains realized on sales of securities, net of tax effect      of $107  |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (161 | ) |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      other comprehensive income, net of tax effect of $453                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 678 |   |   |   |   |   |   |   |   |   |   |   | 678 |   |   |   | 678 |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive      income                                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   | $ | 2,238 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of preferred stock                                                                               |   |   | 16,726 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 16,726 |   |
| Issuance      of common stock warrants                                                                         |   |   |   |   |   |   |   |   |   |   | 664 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 664 |   |
| 4%      stock dividend                                                                                         |   |   |   |   |   |   | 346,011 |   |   |   | 2,249 |   |   |   |   |   |   |   |   |   |   |   | (2,249 | ) |   |   |   |   |   |   | — |   |
| Dividend      on preferred stock                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (478 | ) |   |   |   |   |   |   | (478 | ) |
| Discount      accretion on preferred stock                                                                     |   |   | 65 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (65 | ) |   |   |   |   |   |   | — |   |
| Cash      in lieu of fractional shares                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (5 | ) |   |   |   |   |   |   | (5 | ) |
| Stock-based      compensation and related tax benefits                                                         |   |   |   |   |   |   |   |   |   |   | 289 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 289 |   |
| Common      shares issued, stock options exercised, net of swapped    shares                                   |   |   |   |   |   |   | 18,832 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at September 30, 2009                                                                             |   | $ | 16,791 |   |   |   | 8,973,645 |   |   | $ | 62,185 |   |   |   |   |   |   | $ | 977 |   |   | $ | 789 |   |   | $ | 721 |   |   | $ | 81,463 |   |

----

|                                                                                                                                                                                            |   | (in      thousands)                                 |    |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|---------|
|                                                                                                                                                                                            |   | Nine      months ended September      30, 2009 |    |   | Nine      months ended September      30, 2008 |   |
| Cash      Flows From Operating Activities                                                                                                                                                       |   |                                                |    |   |   |   |
|           Net      Income                                                                                                                     |   | $                                                   | 1,560   |   |   | $ | 168 |   |
|           Adjustments to reconcile net income to net      cash provided by                            |   |                                                |    |   |   |   |   |   |
|        operating activities:                                                                                                                            |   |                                                |    |   |   |   |   |   |
|  Depreciation      and amortization                                                                                                                                                        |   |                                                | 716     |   |   |   | 791 |   |
|  Provision      for loan losses                                                                                                                                                            |   |                                                | 3,928   |   |   |   | 10,060 |   |
|  Stock      plan accruals                                                                                                                                                                  |   |                                                | 279     |   |   |   | 373 |   |
|  Tax      benefit for stock options                                                                                                                                                        |   |                                                | 10      |   |   |   | 20 |   |
|  Gains      on sales of available-for-sale securities                                                                                                                                      |   |                                                | (268    | ) |   |   | (524 | ) |
|  Gains      on sales of other real estate owned                                                                                                                                            |   |                                                | (4      | ) |   |   | (78 | ) |
|  Write-downs      on other real estate owned                                                                                                                                               |   |                                                | 1,158   |   |   |   | 1,454 |   |
|  Gains      on sales of loans held-for-sale                                                                                                                                                |   |                                                | (720    | ) |   |   | (203 | ) |
|  Proceeds      from sales of loans held-for-sale                                                                                                                                           |   |                                                | 86,604  |   |   |   | 27,386 |   |
|  Originations      of loans held-for-sale                                                                                                                                                  |   |                                                | (86,911 | ) |   |   | (27,455 | ) |
|           Changes      in assets and liabilities:                                                                                             |   |                                                |    |   |   |   |   |   |
|  Decrease      in accrued interest receivable and other assets                                                                                                                             |   |                                                | (783    | ) |   |   | (4,175 | ) |
|  Increase      (decrease) in accrued interest payable and other    liabilities                                                                                                             |   |                                                | 151     |   |   |   | (1,557 | ) |
|                     Net cash      provided by operating activities      |   |                                                | 5,720   |   |   |   | 6,260 |   |
|                                                                                                                                                                                            |   |                                                |    |   |   |   |   |   |
| Cash      Flows From Investing Activities                                                                                                                                                  |   |                                                |    |   |   |   |   |   |
|           Net      (increase)decrease in investment securities                                                                 |   |                                                | (43,714 | ) |   |   | 32,808 |   |
|           Net      decrease (increase) in loans                                                                                          |   |                                                | 28,437  |   |   |   | (46,018 | ) |
|           Net      increase in other interest earning assets                                                                             |   |                                                | (195    | ) |   |   | (91 | ) |
|           Net      decrease in OREO                                                                                                      |   |                                                | 679     |   |   |   | — |   |
|           Purchases of premises and equipment, net                                                                   |   |                                                | (481    | ) |   |   | (1,954 | ) |
|                     Net cash      used in investing activities               |   |                                                | (15,274 | ) |   |   | (15,255 | ) |
|                                                                                                                                                                                            |   |                                                |    |   |   |   |   |   |
| Cash      Flows From Financing Activities                                                                                                                                                  |   |                                                |    |   |   |   |   |   |
|           Net      increase (decrease) in deposits                                                                                  |   |                                                | 45,474  |   |   |   | (63,449 | ) |
| Proceeds      from issuance of preferred stock                                                                                                                                                  |   |                                                | 16,726  |   |   |   | — |   |
| Proceeds      from issuance of common stock warrants                                                                                                                                            |   |                                                | 664     |   |   |   | — |   |
|           Net (decrease)      increase in FHLB advances and other    borrowings                                           |   |                                                | (6,383  | ) |   |   | 14,745 |   |
|           Cash dividends paid                                                                                                       |   |                                                | (5      | ) |   |   | (10 | ) |
|           Tax      benefit for stock options                                                                                                  |   |                                                | (10     | ) |   |   | (20 | ) |
|           Repurchase of stock                                                                                                       |   |                                                | — |   |   |   | (1,359 | ) |
|                     Net cash      provided by (used) in financing activities |   |                                                | 56,466  |   |   |   | (50,093 | ) |
|                                                                                                                                                                                  |   |                                                |    |   |   |   |   |   |
| Net Increase      (Decrease)in Cash and Cash Equivalents                                                                                                               |   |                                                | 46,912  |   |   |   | (59,088 | ) |
| Cash and Cash Equivalents,      beginning of period                                                                                                                    |   |                                                | 66,010  |   |   |   | 99,030 |   |
| Cash and Cash Equivalents, end of period                                                                                                                          |   | $                                                   | 112,922 |   |   | $ | 39,942 |   |
|                                                                                                                                                                                            |   |                                                |    |   |   |   |   |   |
| Supplemental Disclosures of Cash Flow Information:                                                                                                                     |   |                                                |    |   |   |   |   |   |
| Cash paid during the period for:                                                                                                                                       |   |                                                |    |   |   |   |   |   |
|                     Interest                                                                |   | $                                                   | 3,692   |   |   | $ | 5,260 |   |
|                     Income      Taxes                                                       |   | $                                                   | 481     |   |   | $ | 342 |   |
|                                                                                                                                                                                            |   |                                                |    |   |   |   |   |   |
| Supplemental disclosures of non-cash investing and financing activities:                                                                                     |   |                                                |    |   |   |   |   |   |
| Preferred      stock dividend payable and accretion                                                                                                                                             |   | $                                                   | 543     |   |   |   | — |   |
|    Transfer      of loans held-for-investment to other real estate owned                                                                                                         |   | $                                                   | 2,213   |   |   | $ | 6,343 |   |
|    Stock dividend distributed                                                                                                                                          |   | $                                                   | 2,249   |   |   | $ | 8,642 |   |

----

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

----

----

|                              |   | (in      thousands)                      |   |
|-----------------------------------|--------|------------------------------------------|--------|
|                              |   |                                     |   |   |   |   |
|                              |   | Nine      months endedSeptember      30, |   |   | Year      ended December 31, |   |
|                              |   | 2009                                     |   |   | 2008 |   |   | 2008 |   |
| Balance,      beginning of period |   | $                                        | 14,435 |   |   | $ | 10,876 |   |   | $ | 10,876 |   |
| Provision      for loan losses    |   |                                     | 3,928  |   |   |   | 10,060 |   |   |   | 16,164 |   |
| Loan      charge-offs             |   |                                     | (5,079 | ) |   |   | (8,009 | ) |   |   | (13,324 | ) |
| Loan      recoveries              |   |                                     | 895    |   |   |   | 511 |   |   |   | 719 |   |
| Balance,      end of period       |   | $                                        | 14,179 |   |   | $ | 13,438 |   |   | $ | 14,435 |   |

----

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

|                                                       |   | (in      thousands)    |   |
|------------------------------------------------------------|--------|------------------------|--------|
|                                                       |   | December      31, 2008 |   |   | Additions |   |   | Reductions |   |   | September      30, 2009 |   |
|                                                       |   |                   |   |   |   |   |   |   |   |   |   |   |
| Mortgage      servicing rights                             |   | $                      | 978    |   |   | $ | 725 |   |   | $ | 196 |   |   | $ | 1,507 |   |
| Valuation      allowance                                   |   |                   | (85    | ) |   |   | (106 | ) |   |   | — |   |   |   | (191 | ) |
| Mortgage      servicing rights, net of valuation allowance |   | $                      | 893    |   |   | $ | 619 |   |   | $ | 196 |   |   | $ | 1,316 |   |
|                                                       |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                     |   | (in      thousands, except share and earnings) |      |
|----------------------------------------------------------|--------|------------------------------------------------|-----------|
|                                                     |   | Three      months ended                        |      |   | Nine      months ended |   |
|                                                     |   | September      30,                             |      |   | September      30, |   |
|                                                     |   | 2009                                           |      |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Basic      earnings per share:                           |   |                                           |      |   |   |   |   |   |   |   |   |   |
| Net      income                                          |   | $                                              | 531       |   |   | $ | 972 |   |   | $ | 1,560 |   |   | $ | 168 |   |
| Preferred      stock dividend and accretion              |   | $                                              | (249      | ) |   |   | — |   |   | $ | (544 | ) |   |   | — |   |
| Net      income available to common shareholders         |   | $                                              | 282       |   |   | $ | 972 |   |   | $ | 1,016 |   |   | $ | 168 |   |
|                                                     |   |                                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding          |   |                                           | 8,973,645 |   |   |   | 8,924,720 |   |   |   | 8,968,860 |   |   |   | 8,964,050 |   |
| Basic      EPS                                           |   | $                                              | 0.03      |   |   | $ | 0.11 |   |   | $ | 0.11 |   |   | $ | 0.02 |   |
|                                                     |   |                                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted      earnings per share:                         |   |                                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                          |   | $                                              | 531       |   |   |   | 972 |   |   | $ | 1,560 |   |   | $ | 168 |   |
| Preferred      stock dividend and accretion              |   | $                                              | (249      | ) |   |   | — |   |   | $ | (544 | ) |   |   | — |   |
| Net      income available to common shareholders         |   | $                                              | 282       |   |   | $ | 972 |   |   | $ | 1,016 |   |   | $ | 168 |   |
|                                                     |   |                                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares outstanding          |   |                                           | 8,973,645 |   |   |   | 8,924,720 |   |   |   | 8,968,860 |   |   |   | 8,964,050 |   |
|                                                     |   |                                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effect      of dilutive options                          |   |                                           | 5,605     |   |   |   | 83,292 |   |   |   | 25,470 |   |   |   | 146,837 |   |
|                                                     |   |                                           |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Adjusted      weighted average common shares outstanding |   |                                           | 8,979,250 |   |   |   | 9,008,012 |   |   |   | 8,994,330 |   |   |   | 9,110,887 |   |
| Diluted      EPS                                         |   | $                                              | 0.03      |   |   | $ | 0.11 |   |   | $ | 0.11 |   |   | $ | 0.02 |   |

----

|                                                       |   | Number      of Shares |    |   | Weighted      Average Exercise Price |   |    | Aggregate      Intrinsic Value |   |   | Weighted      Average Remaining Contractual Term (in years) |   |
|------------------------------------------------------------|--------|-----------------------|---------|--------|--------------------------------------|--------|---------|--------------------------------|--------|--------|------------------------------------------------------------------|--------|
| Options      outstanding at Beginning of  Period |   |                  | 520,336 |   |                                 | $      | 11.19   |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |    |                           |   |   |                                                             |   |   |   |
|    Granted                                  |   |                  | — |   |                                 |   | — |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |    |                           |   |   |                                                             |   |   |   |
|    Cancelled      / Forfeited               |   |                  | — |   |                                 |   | — |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |    |                           |   |   |                                                             |   |   |   |
|    Exercised                                |   |                  | — |   |                                 |   | — |                           |   |   | —                                                          |   |   |   |   |
|                                                       |   |                  |    |   |                                 |   |    |                           |   |   |                                                             |   |   |   |   |
| Options      outstanding at End of Period                  |   |                  | 520,336 |   |                                 | $      | 11.19   |                           |   | $      | 104,168                                                          |   |   |   | 4.29 |   |
|                                                       |   |                  |    |   |                                 |   |    |                           |   |   |                                                             |   |   |   |   |   |
| Exercisable      (vested) at End of Period                 |   |                  | 466,870 |   |                                 | $      | 10.50   |                           |   | $      | 92,168                                                           |   |   |   | 3.93 |   |

|                                                       |   | Number      of Shares |    |   | Weighted      Average Exercise Price |   |   | Aggregate      Intrinsic Value |   |   | Weighted      Average Remaining Contractual Term (in years) |   |
|------------------------------------------------------------|--------|-----------------------|---------|--------|--------------------------------------|--------|--------|--------------------------------|--------|--------|------------------------------------------------------------------|--------|
| Options      outstanding at Beginning of  Period |   |                  | 555,591 |   |                                 | $      | 10.71  |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |
|    Granted                                  |   |                  | 8,000   |   |                                 | $      | 4.50   |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |
|    Cancelled      / Forfeited               |   |                  | (1,840  | )      |                                 | $      | 3.65   |                           |   |   |                                                             |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |
|    Exercised                                |   |                  | (41,415 | )      |                                 | $      | 3.81   |                           |   | $      | 101,246                                                          |   |   |   |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |   |
| Options      outstanding at End of Period                  |   |                  | 520,336 |   |                                 | $      | 11.19  |                           |   | $      | 104,168                                                          |   |   |   | 4.29 |   |
|                                                       |   |                  |    |   |                                 |   |   |                           |   |   |                                                             |   |   |   |   |   |
| Exercisable      (vested) at End of Period                 |   |                  | 466,870 |   |                                 | $      | 10.50  |                           |   | $      | 92,168                                                           |   |   |   | 3.93 |   |

----

|                                 | Three      Months Ended |   | Nine      Months Ended |
|--------------------------------------|-------------------------|--------|------------------------|
| September      30, 2009*             | September      30, 2009 |
|  Risk      Free Interest Rate   | —                 |   | 2.00%                  |
|                                 |                    |   |                   |
|  Expected      Dividend Yield   | —                 |   | 0.00%                  |
|                                 |                    |   |                   |
|  Expected      Life in Years    | —                 |   | 5                      |
|                                 |                    |   |                   |
|  Expected      Price Volatility | —                 |   | 41.35%                 |

|                                                       |   | Number      of Shares |    |   | Weighted      Average Grant-Date Fair Value |   |    | Aggregate      Intrinsic Value |   | Weighted      Average Remaining Contractual      Term            (in      years) |
|------------------------------------------------------------|--------|-----------------------|---------|--------|---------------------------------------------|--------|---------|--------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
| Options      outstanding at Beginning of  Period |   |                  | 35,817  |   |                                        | $      | 13.20   |                           |   |                                                                                                                                         |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |
|    Granted                                  |   |                  | — |   |                                        |   | — |                           |   |                                                                                                                                         |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |
|    Cancelled      / Forfeited               |   |                  | — |   |                                        |   | — |                           |   |                                                                                                                                         |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |
|    Exercised/Released/Vested                |   |                  | — |   |                                        |   | — |                           |   |                                                                                                                                         | — |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |   |
| Options      outstanding at End of Period                  |   |                  | 35,817  |   |                                        | $      | 13.20   |                           |   | $                                                                                                                                            | 214,902 |   |   8.40 |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |   |

|                                                       |   | Number      of Shares |    |   | Weighted      Average Grant-Date Fair Value |   |    | Aggregate      Intrinsic Value |   | Weighted      Average Remaining Contractual      Term            (in      years) |
|------------------------------------------------------------|--------|-----------------------|---------|--------|---------------------------------------------|--------|---------|--------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|
| Options      outstanding at Beginning of  Period |   |                  | 31,071  |   |                                        | $      | 16.03   |                           |   |                                                                                                                                         |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |
|    Granted                                  |   |                  | 9,300   |   |                                        | $      | 4.50    |                           |   |                                                                                                                                         |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |
|    Cancelled      / Forfeited               |   |                  | — |   |                                        |   | — |                           |   |                                                                                                                                         |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |
|    Exercised/Released/Vested                |   |                  | (4,554  | )      |                                        | $      | 14.79   |                           |   | $                                                                                                                                            | 22,551 |   |   |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |   |
| Options      outstanding at End of Period                  |   |                  | 35,817  |   |                                        | $      | 13.20   |                           |   | $                                                                                                                                            | 214,902 |   |   8.40 |
|                                                       |   |                  |    |   |                                        |   |    |                           |   |                                                                                                                                         |   |   |   |

----

|                                 | Three      Months Ended |   | Nine      Months Ended  |   |
|--------------------------------------|-------------------------|--------|-------------------------|--------|
| September      30, 2009              | September      30, 2009 |   |
|  Risk      Free Interest Rate   |    0.95% |   |    0.95% |   |
|                                 |                    |   |                    |   |
|  Expected      Dividend Yield   |    0.00% |   |    0.00% |   |
|                                 |                    |   |                    |   |
|  Expected      Life in Years    | 1.00                    |   | 1.00                    |   |
|                                 |                    |   |                    |   |
|  Expected      Price Volatility | 48.13%                  |   | 48.13%                  |   |

----

|                                         |   | Three      months ended September 30, |   |
|----------------------------------------------|--------|---------------------------------------|--------|
|                                         |   | 2009                                  |   |   | 2008 |   |
| Components      of Net Periodic Benefit Cost |   |                                  |   |   |   |   |
| Service      Cost                            |   | $                                     | 3,990  |   |   | $ | 33,232 |   |
| Interest  Cost                     |   |                                  | 26,418 |   |   |   | 29,684 |   |
| Amortization      of Plan Gain               |   |                                  | (8,179 | ) |   |   | — |   |
| Amortization      of prior service cost      |   |                                  | 21,821 |   |   |   | 21,821 |   |
| Net      periodic benefit cost               |   | $                                     | 44,050 |   |   | $ | 84,737 |   |

----

|                                         |   | Three      months ended September 30, |   |
|----------------------------------------------|--------|---------------------------------------|--------|
|                                         |   | 2009                                  |   |   | 2008 |   |
| Components      of Net Periodic Benefit Cost |   |                                  |   |   |   |   |
| Service      Cost                            |   | $                                     | 11,088 |   |   | $ | 14,424 |   |
| Interest  Cost                     |   |                                  | 7,920  |   |   |   | 7,731 |   |
| Net      periodic benefit cost               |   | $                                     | 19,008 |   |   | $ | 22,155 |   |

----

|   | 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 besignificant. |

----

|                                          |   |                |   |   |         |   |   |         |   |   |         |   |
|-----------------------------------------------|--------|---------------------|--------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|
|                                          |   | (in      thousands) |   |
| September      30, 2009                       |   | Total               |   |   | Level      1 |   |   | Level      2 |   |   | Level      3 |   |
| Investment      securities available-for-sale |   | $                   | 87,218 |   |         | $      | 255    |         |   | $      | 86,963       |   |   | $ | — |   |
|                                          |   |                |   |   |         |   |   |         |   |   |         |   |   |   |   |   |
| Total      investments at fair value          |   | $                   | 87,218 |   |         | $      | 255    |         |   | $      | 86,963       |   |   | $ | — |   |
|                                          |   |                |   |   |         |   |   |         |   |   |         |   |   |   |   |   |

|                            |   |                |   |   |         |   |    |         |   |   |         |   |
|---------------------------------|--------|---------------------|--------|--------|--------------|--------|---------|--------------|--------|--------|--------------|--------|
|                            |   | (in      thousands) |   |
| September      30, 2009         |   | Total               |   |   | Level      1 |   |    | Level      2 |   |   | Level      3 |   |
| Impaired      loans             |   | $                   | 4,687  |   |         | $      | — |         |   | $      | —      |   |   | $ | 4,687 |   |
| Other      real estate owned    |   |                | 4,748  |   |         |   | — |         |   |   | —      |   |   |   | 4,748 |   |
| Loan      servicing rights      |   |                | 1,316  |   |         |   | — |         |   |   | —      |   |   |   | 1,316 |   |
|                            |   |                |   |   |         |   |    |         |   |   |         |   |   |   |   |   |
| Total      assets at fair value |   | $                   | 10,751 |   |         | $      | — |         |   | $      | —      |   |   | $ | 10,751 |   |

----

----

----

|                                                     |   | September      30, 2009 |    |   | December      31, 2008 |   |
|----------------------------------------------------------|--------|-------------------------|---------|--------|------------------------|--------|
| (in      thousands)                                      |   | Carrying      amount    |    |   | Fairvalue              |   |   | Carrying      amount |   |   | Fairvalue |   |
|                                                     |   |                    |    |   |                   |   |   |   |   |   |   |   |
| Financial      assets:                                   |   |                    |    |   |                   |   |   |   |   |   |   |   |
| Cash      and federal funds sold                         |   | $                       | 112,922 |   |                   | $      | 112,922 |   |   | $ | 66,010 |   |   | $ | 66,010 |   |
| Investment      securities                               |   |                    | 87,218  |   |                   |   | 87,218 |   |   |   | 42,106 |   |   |   | 42,106 |   |
| Other      equity securities                             |   |                    | 2,506   |   |                   |   | 2,506 |   |   |   | 2,311 |   |   |   | 2,311 |   |
| Loans:                                                   |   |                    |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Net      loans                                           |   |                    | 482,390 |   |                   |   | 483,244 |   |   |   | 516,968 |   |   |   | 516,949 |   |
| Loans      held-for-sale                                 |   |                    | 3,219   |   |                   |   | 3,303 |   |   |   | 2,192 |   |   |   | 2,192 |   |
| Financial      liabilities:                              |   |                    |    |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                                 |   |                    | 630,192 |   |                   |   | 612,427 |   |   |   | 584,718 |   |   |   | 547,419 |   |
| FHLB      advances and other   borrowings |   |                    | 11,876  |   |                   |   | 12,331 |   |   |   | 18,259 |   |   |   | 19,025 |   |

|                                     |   | September      30, 2009 |    |   | December      31, 2008 |   |
|------------------------------------------|--------|-------------------------|---------|--------|------------------------|--------|
| (in      thousands)                      |   | Contract      amount    |    |   | Fairvalue              |   |   | Contract      amount |   |   | Fairvalue |   |
|                                     |   |                    |    |   |                   |   |   |   |   |   |   |   |
| Unrecognized      financial instruments: |   |                    |    |   |                   |   |   |   |   |   |   |   |
| Commitments      to extend credit        |   | $                       | 172,443 |   |                   | $      | 1,293 |   |   | $ | 198,615 |   |   | $ | 1,490 |   |
| Standby      letters of credit           |   |                    | 3,747   |   |                   |   | 37 |   |   |   | 5,715 |   |   |   | 57 |   |

----

| (in      thousands)                                          |   | Amortized      cost |    |   | Unrealized      gains |   |    | Unrealized      losses |   |   | Estimated      market value |   |
|--------------------------------------------------------------|--------|---------------------|---------|--------|-----------------------|--------|---------|------------------------|--------|--------|-----------------------------|--------|
|                                                         |   |                |    |   |                  |   |    |                   |   |   |                        |   |
| Investment      securities available-for-sale:               |   |                |    |   |                  |   |    |                   |   |   |                        |   |
| U.S.      Treasury securities                                |   | $                   | 255     |   |                  | $      | — |                   |   | $      | —                     |   |   | $ | 255 |   |
| Securities      of U.S. government agencies and corporations |   |                | — |   |                  |   | — |                   |   |   | —                     |   |   |   | — |   |
| Obligations      of states and political subdivisions        |   |                | 23,803  |   |                  |   | 1026    |                   |   |   | (69                         | )      |   |   | 24,760 |   |
| Mortgage-backed      securities                              |   |                | 61,758  |   |                  |   | 543     |                   |   |   | (98                         | )      |   |   | 62,203 |   |
|                                                         |   |                |    |   |                  |   |    |                   |   |   |                        |   |   |   |   |   |
| Total      debt securities                                   |   | $                   | 85,816  |   |                  | $      | 1,569   |                   |   | $      | (167                        | )      |   | $ | 87,218 |   |

| (in      thousands)                                          |   | Amortized      cost |   |   | Unrealized      gains |   |   | Unrealized      losses |   |   | Estimated      market value |   |
|--------------------------------------------------------------|--------|---------------------|--------|--------|-----------------------|--------|--------|------------------------|--------|--------|-----------------------------|--------|
|                                                         |   |                |   |   |                  |   |   |                   |   |   |                        |   |
| Investment      securities available-for-sale:               |   |                |   |   |                  |   |   |                   |   |   |                        |   |
| U.S.      Treasury securities                                |   | $                   | 249    |   |                  | $      | 25     |                   |   | $      | —                     |   |   | $ | 274 |   |
| Securities      of U.S. government agencies and corporations |   |                | 2,018  |   |                  |   | 21     |                   |   |   | —                     |   |   |   | 2,039 |   |
| Obligations      of states and political subdivisions        |   |                | 26,345 |   |                  |   | 244    |                   |   |   | (358                        | )      |   |   | 26,231 |   |
| Mortgage-backed      securities                              |   |                | 13,223 |   |                  |   | 369    |                   |   |   | (30                         | )      |   |   | 13,562 |   |
|                                                         |   |                |   |   |                  |   |   |                   |   |   |                        |   |   |   |   |   |
| Total      debt securities                                   |   | $                   | 41,835 |   |                  | $      | 659    |                   |   | $      | (388                        | )      |   | $ | 42,106 |   |

| (in      thousands)                         |   | Amortizedcost |   |   | Estimated      market value |   |
|---------------------------------------------|--------|---------------|--------|--------|-----------------------------|--------|
|                                        |   |          |   |   |                        |   |
| Due      in one year or less                |   | $             | 1,451  |   |                        | $      | 1,460 |   |
| Due      after one year through five years  |   |          | 62,493 |   |                        |   | 62,984 |   |
| Due      after five years through ten years |   |          | 3,879  |   |                        |   | 3,952 |   |
| Due      after ten years                    |   |          | 17,993 |   |                        |   | 18,822 |   |
|                                        |   |          |   |   |                        |   |   |   |
|                                        |   | $             | 85,816 |   |                        | $      | 87,218 |   |

----

|                                                  |   | Less      than 12 months |   |   | 12      months or more |   |   | Total           |   |
|-------------------------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|--------|-----------------|--------|
| (in      thousands)                                   |   | Fair      Value          |   |   | Unrealized      losses |   |   | Fair      Value |   |   | Unrealized      losses |   |   | Fair      Value |   |   | Unrealized      losses |   |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |
| Obligations      of states and political subdivisions |   |                     | 989    |   |                   |   | (21    | )               |   |   | 1,014 |   |   |   | (49 | ) |   |   | 2,003 |   |   |   | (70 | ) |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed      securities                       |   |                     | 12,865 |   |                   |   | (97    | )               |   |   | — |   |   |   | — |   |   |   | 12,865 |   |   |   | (97 | ) |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                 |   | $                        | 13,854 |   |                   | $      | (118   | )               |   | $ | 1,014 |   |   | $ | (49 | ) |   | $ | 14,868 |   |   | $ | (167 | ) |

|                                                  |   | Less      than 12 months |   |   | 12      months or more |   |   | Total           |   |
|-------------------------------------------------------|--------|--------------------------|--------|--------|------------------------|--------|--------|-----------------|--------|
| (in      thousands)                                   |   | Fair      Value          |   |   | Unrealized      losses |   |   | Fair      Value |   |   | Unrealized      losses |   |   | Fair      Value |   |   | Unrealized      losses |   |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |
| Obligations      of states and political subdivisions |   |                     | 4,888  |   |                   |   | (197   | )               |   |   | 5,454 |   |   |   | (161 | ) |   |   | 10,342 |   |   |   | (358 | ) |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-backed      securities                       |   |                     | 1,638  |   |                   |   | (30    | )               |   |   | 30 |   |   |   | — |   |   |   | 1,668 |   |   |   | (30 | ) |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |                     |   |   |                   |   |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                                                 |   | $                        | 6,526  |   |                   | $      | (227   | )               |   | $ | 5,484 |   |   | $ | (161 | ) |   | $ | 12,010 |   |   | $ | (388 | ) |

----

----

----

|                                                                                      |   | (in      thousands, except per share and percentage) |    |
|-------------------------------------------------------------------------------------------|--------|------------------------------------------------------|---------|
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |
|                                                                                      |   | Three      months                                    |    |   | Three      months |   |   | Nine      months |   |   | Nine      months |   |
|                                                                                      |   | ended                                                |    |   | ended |   |   | ended |   |   | ended |   |
|                                                                                      |   | September      30, 2009                         |    |   | September      30, 2008 |   |   | September      30, 2009 |   |   | September      30, 2008 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |
| For      the Period:                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |
|     Net      Income                                                   |   | $                                                    | 531     |   |   | $ | 972 |   |   | $ | 1,560 |   |   | $ | 168 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Basic      Earnings Per Common Share*                             |   | $                                                    | 0.03    |   |   | $ | 0.11 |   |   | $ | 0.11 |   |   | $ | 0.02 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Diluted      Earnings Per Common Share*                           |   | $                                                    | 0.03    |   |   | $ | 0.11 |   |   | $ | 0.11 |   |   | $ | 0.02 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| At      Period End:                                                                       |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Total      Assets                                     |   |                                                 | 729,956 |   |   |   | 657,523 |   |   |   | 729,956 |   |   |   | 657,523 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Total      Loans, Net (including loans held-for-sale) |   |                                                 | 485,609 |   |   |   | 530,322 |   |   |   | 485,609 |   |   |   | 530,322 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total      Investment Securities                            |   |                                                 | 87,218  |   |   |   | 43,452 |   |   |   | 87,218 |   |   |   | 43,452 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total      Deposits                                         |   |                                                 | 630,192 |   |   |   | 559,222 |   |   |   | 630,192 |   |   |   | 559,222 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
|       Loan-To-Deposit      Ratio                            |   |                                                 | 77.1    |   |   |   | 94.8 |   |   |   | 77.1 |   |   |   | 94.8 |   |
|                                                                                      |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *Adjusted      for stock dividends                                                        |   |                                                 |    |   |   |   |   |   |   |   |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                         |   | Three      months ended |    |   | Three      months ended |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                         |   | September      30, 2009 |    |   | September      30, 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                         |   | Average                 |    |   |                    |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                                                                                                                                                                                                                                                                                                                         |   | Balance                 |    |   | Interest                |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Assets                                                                                                                                                                                                                                                                                                                                                       |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning      assets:                                                                                                                                                                                                                                                                                                                                |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      (1)                                                                                                                                                                                                                                                                                                                                               |   | $                       | 492,919 |   |                    | $      | 7,545 |   |   |   | 6.07 | % |   | $ | 530,220 |   |   | $ | 9,062 |   |   |   | 6.78 | % |
| Federal      funds sold                                                                                                                                                                                                                                                                                                                                      |   |                    | 58,661  |   |                    |   | 19 |   |   |   | 0.13 | % |   |   | 15,044 |   |   |   | 70 |   |   |   | 1.85 | % |
| Interest      bearing due from banks                                                                                                                                                                                                                                                                                                                         |   |                    | 12,553  |   |                    |   | 28 |   |   |   | 0.88 | % |   |   | 10,261 |   |   |   | 109 |   |   |   | 4.21 | % |
| Investment      securities, taxable                                                                                                                                                                                                                                                                                                                          |   |                    | 45,868  |   |                    |   | 353 |   |   |   | 3.05 | % |   |   | 23,175 |   |   |   | 282 |   |   |   | 4.83 | % |
| Investment      securities, non-taxable  (2)                                                                                                                                                                                                                                                                                                       |   |                    | 23,454  |   |                    |   | 247 |   |   |   | 4.18 | % |   |   | 28,248 |   |   |   | 300 |   |   |   | 4.21 | % |
| Other      interest earning assets                                                                                                                                                                                                                                                                                                                           |   |                    | 2,506   |   |                    |   | 4 |   |   |   | 0.63 | % |   |   | 2,271 |   |   |   | 33 |   |   |   | 5.77 | % |
| Total      interest-earning assets                                                                                                                                                                                                                                                                                                                           |   |                    | 635,961 |   |                    |   | 8,196 |   |   |   | 5.11 | % |   |   | 609,219 |   |   |   | 9,856 |   |   |   | 6.42 | % |
| Non-interest-earning      assets:                                                                                                                                                                                                                                                                                                                            |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                                                                                                                                                                                                                                                 |   |                    | 41,966  |   |                    |   |   |   |   |   |   |   |   |   | 22,521 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                                                                                                                                                                                                                                                             |   |                    | 7,504   |   |                    |   |   |   |   |   |   |   |   |   | 8,096 |   |   |   |   |   |   |   |   |   |
| Other      real estate owned                                                                                                                                                                                                                                                                                                                                 |   |                    | 2,934   |   |                    |   |   |   |   |   |   |   |   |   | 5,630 |   |   |   |   |   |   |   |   |   |
| Accrued      interest receivable and other assets                                                                                                                                                                                                                                                                                                            |   |                    | 29,170  |   |                    |   |   |   |   |   |   |   |   |   | 25,992 |   |   |   |   |   |   |   |   |   |
| Total      average assets                                                                                                                                                                                                                                                                                                                                    |   |                    | 717,535 |   |                    |   |   |   |   |   |   |   |   |   | 671,458 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                         |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Stockholders’ Equity:                                                                                                                                                                                                                                                                                                             |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                                                                                                                                                                                                                                                                                           |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      transaction deposits                                                                                                                                                                                                                                                                                                                   |   |                    | 126,346 |   |                    |   | 146 |   |   |   | 0.46 | % |   |   | 128,313 |   |   |   | 208 |   |   |   | 0.64 | % |
| Savings      and MMDA’s                                                                                                                                                                                                                                                                                                                                |   |                    | 173,148 |   |                    |   | 353 |   |   |   | 0.81 | % |   |   | 171,971 |   |   |   | 422 |   |   |   | 0.97 | % |
| Time,      under $100,000                                                                                                                                                                                                                                                                                                                                    |   |                    | 57,472  |   |                    |   | 218 |   |   |   | 1.50 | % |   |   | 45,811 |   |   |   | 214 |   |   |   | 1.85 | % |
| Time,      $100,000 and over                                                                                                                                                                                                                                                                                                                                 |   |                    | 93,817  |   |                    |   | 438 |   |   |   | 1.85 | % |   |   | 61,658 |   |   |   | 438 |   |   |   | 2.82 | % |
| FHLB      advances and other borrowings                                                                                                                                                                                                                                                                                                                      |   |                    | 11,770  |   |                    |   | 109 |   |   |   | 3.67 | % |   |   | 28,271 |   |   |   | 247 |   |   |   | 3.47 | % |
| Total      interest-bearing liabilities                                                                                                                                                                                                                                                                                                                      |   |                    | 462,553 |   |                    |   | 1,264 |   |   |   | 1.08 | % |   |   | 436,024 |   |   |   | 1,529 |   |   |   | 1.39 | % |
| Non-interest-bearing      liabilities:                                                                                                                                                                                                                                                                                                                       |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing      demand deposits                                                                                                                                                                                                                                                                                                                    |   |                    | 169,037 |   |                    |   |   |   |   |   |   |   |   |   | 167,339 |   |   |   |   |   |   |   |   |   |
| Accrued      interest payable and other liabilities                                                                                                                                                                                                                                                                                                          |   |                    | 6,556   |   |                    |   |   |   |   |   |   |   |   |   | 6,178 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                                                                                                                                                                                                                                                                       |   |                    | 638,146 |   |                    |   |   |   |   |   |   |   |   |   | 609,541 |   |   |   |   |   |   |   |   |   |
| Total      stockholders’ equity                                                                                                                                                                                                                                                                                                                        |   |                    | 79,389  |   |                    |   |   |   |   |   |   |   |   |   | 61,917 |   |   |   |   |   |   |   |   |   |
| Total      average liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                |   | $                       | 717,535 |   |                    |   |   |   |   |   |   |   |   | $ | 671,458 |   |   |   |   |   |   |   |   |   |
| Net      interest income and net interest margin (3)                                                                                                                                                                                                                                                                                                         |   |                    |    |   |                    | $      | 6,932 |   |   |   | 4.32 | % |   |   |   |   |   | $ | 8,327 |   |   |   | 5.42 | % |
|                                                                                                                                                                                                                                                                                                                                                         |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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 $308 and $409 for the three months ended September 30, 2009      and 2009, 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.                                                                                                                                                                                                                                  |   |

----

|                                                                                                                                                                                                                                                                                                                                                            |   | Nine      months ended  |    |   | Nine      months ended  |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|--------|-------------------------|--------|
|                                                                                                                                                                                                                                                                                                                                                            |   | September      30, 2009 |    |   | September      30, 2008 |   |
|                                                                                                                                                                                                                                                                                                                                                            |   | Average                 |    |   |                    |   |   | Yield/ |   |   | Average |   |   |   |   |   | Yield/ |   |
|                                                                                                                                                                                                                                                                                                                                                            |   | Balance                 |    |   | Interest                |   |   | Rate |   |   | Balance |   |   | Interest |   |   | Rate |   |
| Assets                                                                                                                                                                                                                                                                                                                                                          |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning      assets:                                                                                                                                                                                                                                                                                                                                   |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans      (1)                                                                                                                                                                                                                                                                                                                                                  |   | $                       | 494,117 |   |                    | $      | 23,315 |   |   |   | 6.31 | % |   | $ | 507,804 |   |   | $ | 26,842 |   |   |   | 7.04 | % |
| Federal      funds sold                                                                                                                                                                                                                                                                                                                                         |   |                    | 61,392  |   |                    |   | 58 |   |   |   | 0.13 | % |   |   | 25,996 |   |   |   | 487 |   |   |   | 2.50 | % |
| Interest      bearing due from banks                                                                                                                                                                                                                                                                                                                            |   |                    | 5,897   |   |                    |   | 88 |   |   |   | 2.00 | % |   |   | 16,524 |   |   |   | 521 |   |   |   | 4.20 | % |
| Investment      securities, taxable                                                                                                                                                                                                                                                                                                                             |   |                    | 31,368  |   |                    |   | 820 |   |   |   | 3.50 | % |   |   | 30,602 |   |   |   | 1,122 |   |   |   | 4.88 | % |
| Investment      securities, non-taxable  (2)                                                                                                                                                                                                                                                                                                          |   |                    | 24,256  |   |                    |   | 765 |   |   |   | 4.22 | % |   |   | 31,398 |   |   |   | 986 |   |   |   | 4.18 | % |
| Other      interest earning assets                                                                                                                                                                                                                                                                                                                              |   |                    | 2,422   |   |                    |   | 10 |   |   |   | 0.55 | % |   |   | 2,237 |   |   |   | 99 |   |   |   | 5.90 | % |
| Total      interest-earning assets                                                                                                                                                                                                                                                                                                                              |   |                    | 619,452 |   |                    |   | 25,056 |   |   |   | 5.41 | % |   |   | 614,561 |   |   |   | 30,057 |   |   |   | 6.52 | % |
| Non-interest-earning      assets:                                                                                                                                                                                                                                                                                                                               |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash      and due from banks                                                                                                                                                                                                                                                                                                                                    |   |                    | 40,442  |   |                    |   |   |   |   |   |   |   |   |   | 23,501 |   |   |   |   |   |   |   |   |   |
| Premises      and equipment, net                                                                                                                                                                                                                                                                                                                                |   |                    | 7,849   |   |                    |   |   |   |   |   |   |   |   |   | 8,012 |   |   |   |   |   |   |   |   |   |
| Other      real estate owned                                                                                                                                                                                                                                                                                                                                    |   |                    | 3,567   |   |                    |   |   |   |   |   |   |   |   |   | 3,368 |   |   |   |   |   |   |   |   |   |
| Accrued      interest receivable and other assets                                                                                                                                                                                                                                                                                                               |   |                    | 27,639  |   |                    |   |   |   |   |   |   |   |   |   | 25,293 |   |   |   |   |   |   |   |   |   |
| Total      average assets                                                                                                                                                                                                                                                                                                                                       |   |                    | 698,949 |   |                    |   |   |   |   |   |   |   |   |   | 674,735 |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                            |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities      and Stockholders’ Equity:                                                                                                                                                                                                                                                                                                                |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      liabilities:                                                                                                                                                                                                                                                                                                                              |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing      transaction deposits                                                                                                                                                                                                                                                                                                                      |   |                    | 126,460 |   |                    |   | 478 |   |   |   | 0.51 | % |   |   | 130,451 |   |   |   | 758 |   |   |   | 0.77 | % |
| Savings      and MMDA’s                                                                                                                                                                                                                                                                                                                                   |   |                    | 166,706 |   |                    |   | 943 |   |   |   | 0.76 | % |   |   | 174,921 |   |   |   | 1,419 |   |   |   | 1.08 | % |
| Time,      under $100,000                                                                                                                                                                                                                                                                                                                                       |   |                    | 57,395  |   |                    |   | 668 |   |   |   | 1.56 | % |   |   | 44,569 |   |   |   | 798 |   |   |   | 2.39 | % |
| Time,      $100,000 and over                                                                                                                                                                                                                                                                                                                                    |   |                    | 83,032  |   |                    |   | 1,199 |   |   |   | 1.93 | % |   |   | 66,628 |   |   |   | 1,660 |   |   |   | 3.32 | % |
| FHLB      advances and other borrowings                                                                                                                                                                                                                                                                                                                         |   |                    | 14,244  |   |                    |   | 390 |   |   |   | 3.66 | % |   |   | 15,964 |   |   |   | 394 |   |   |   | 3.29 | % |
| Total      interest-bearing liabilities                                                                                                                                                                                                                                                                                                                         |   |                    | 447,837 |   |                    |   | 3,678 |   |   |   | 1.10 | % |   |   | 432,533 |   |   |   | 5,029 |   |   |   | 1.55 | % |
| Non-interest-bearing      liabilities:                                                                                                                                                                                                                                                                                                                          |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-interest-bearing      demand deposits                                                                                                                                                                                                                                                                                                                       |   |                    | 171,187 |   |                    |   |   |   |   |   |   |   |   |   | 172,669 |   |   |   |   |   |   |   |   |   |
| Accrued      interest payable and other liabilities                                                                                                                                                                                                                                                                                                             |   |                    | 6,185   |   |                    |   |   |   |   |   |   |   |   |   | 6,080 |   |   |   |   |   |   |   |   |   |
| Total      liabilities                                                                                                                                                                                                                                                                                                                                          |   |                    | 625,209 |   |                    |   |   |   |   |   |   |   |   |   | 611,282 |   |   |   |   |   |   |   |   |   |
| Total      stockholders’ equity                                                                                                                                                                                                                                                                                                                           |   |                    | 73,740  |   |                    |   |   |   |   |   |   |   |   |   | 63,453 |   |   |   |   |   |   |   |   |   |
| Total      average liabilities and stockholders’ equity                                                                                                                                                                                                                                                                                                   |   | $                       | 698,949 |   |                    |   |   |   |   |   |   |   |   | $ | 674,735 |   |   |   |   |   |   |   |   |   |
| Net      interest income and net interest margin (3)                                                                                                                                                                                                                                                                                                            |   |                    |    |   |                    | $      | 21,378 |   |   |   | 4.61 | % |   |   |   |   |   | $ | 25,028 |   |   |   | 5.43 | % |
|                                                                                                                                                                                                                                                                                                                                                            |   |                    |    |   |                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 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 $1,365 and $1,503 for the nine months ended September 30,      2009 and 2008, 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.                                                                                                                                                                                                                                     |   |

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|                                                        |   | (in      thousands) |    |
|-------------------------------------------------------------|--------|---------------------|---------|
|                                                        |   |                |    |
|                                                        |   | Three               |    |   | Three |   |   | Nine |   |   | Nine |   |
|                                                        |   | months              |    |   | months |   |   | months |   |   | months |   |
|                                                        |   | ended               |    |   | ended |   |   | ended |   |   | ended |   |
|                                                        |   | September      30,  |    |   | September      30, |   |   | September      30, |   |   | September      30, |   |
|                                                        |   | 2009                |    |   | 2008 |   |   | 2009 |   |   | 2008 |   |
| Other      miscellaneous operating expenses                 |   |                |    |   |   |   |   |   |   |   |   |   |
| Recovery      of provision for unfunded lending commitments |   | $                   | — |   |   | $ | (104 | ) |   | $ | — |   |   | $ | (108 | ) |
| FDIC      assessments                                       |   |                | 336     |   |   |   | 133 |   |   |   | 1,089 |   |   |   | 358 |   |
| Contributions                                               |   |                | 41      |   |   |   | 39 |   |   |   | 80 |   |   |   | 109 |   |
| Legal      fees                                             |   |                | 52      |   |   |   | 47 |   |   |   | 237 |   |   |   | 225 |   |
| Accounting      and audit fees                              |   |                | 140     |   |   |   | 92 |   |   |   | 379 |   |   |   | 429 |   |
| Consulting      fees                                        |   |                | 44      |   |   |   | 76 |   |   |   | 165 |   |   |   | 308 |   |
| Postage      expense                                        |   |                | 83      |   |   |   | 79 |   |   |   | 271 |   |   |   | 248 |   |
| Telephone      expense                                      |   |                | 63      |   |   |   | 87 |   |   |   | 212 |   |   |   | 223 |   |
| Public      relations                                       |   |                | 50      |   |   |   | 50 |   |   |   | 158 |   |   |   | 249 |   |
| Training      expense                                       |   |                | 23      |   |   |   | 43 |   |   |   | 68 |   |   |   | 167 |   |
| Loan      origination expense                               |   |                | 168     |   |   |   | 53 |   |   |   | 635 |   |   |   | 317 |   |
| Computer      software depreciation                         |   |                | 55      |   |   |   | 64 |   |   |   | 161 |   |   |   | 186 |   |
| Sundry      losses (recovery of sundry losses               |   |                | 33      |   |   |   | (63 | ) |   |   | 158 |   |   |   | 95 |   |
| Loan      collection expense                                |   |                | 86      |   |   |   | 94 |   |   |   | 291 |   |   |   | 164 |   |
| Other      miscellaneous expense                            |   |                | 344     |   |   |   | 331 |   |   |   | 955 |   |   |   | 1,009 |   |
|                                                        |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      other miscellaneous operating expenses           |   | $                   | 1,518   |   |   | $ | 1,021 |   |   | $ | 4,859 |   |   | $ | 3,979 |   |
|                                                        |   |                |    |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                              | (in      thousands) |                    |
|-----------------------------------|---------------------|-------------------------|
|                              |                |                    |   |   |   |   |
|                              |                | September      30, 2009 |   |   | December      31, 2008 |   |
|                              |                |                    |   |   |   |   |
| Undisbursed      loan commitments |                | $                       | 172,443 |   |   | $ | 198,615 |   |
| Standby      letters of credit    |                |                    | 3,747 |   |   |   | 5,715 |   |
| Commitments      to sell loans    |                |                    | 6,201 |   |   |   | 9,764 |   |
|                              |                | $                       | 182,391 |   |   | $ | 214,094 |   |

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|                                            |   | At      September 30, 2009 |   |   | At      June 30, 2009 |   |
|-------------------------------------------------|--------|----------------------------|--------|--------|-----------------------|--------|
|                                            |   | Gross                      |   |   | Guaranteed            |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars      in thousands)                     |   |                       |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Classified      loans:                          |   |                       |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |                       |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential      mortgage                       |   | $                          | 5,566  |   |                  | $      | — |   |   | $ | 5,566 |   |   | $ | 4,396 |   |   | $ | — |   |   | $ | 4,396 |   |
| Residential      construction                   |   |                       | 7,812  |   |                  |   | — |   |   |   | 7,812 |   |   |   | 11,429 |   |   |   | — |   |   |   | 11,429 |   |
| Commercial      real estate                     |   |                       | 30,520 |   |                  |   | 100 |   |   |   | 30,420 |   |   |   | 32,425 |   |   |   | — |   |   |   | 32,425 |   |
| Agriculture                                     |   |                       | 95     |   |                  |   | — |   |   |   | 95 |   |   |   | 152 |   |   |   | — |   |   |   | 152 |   |
| Commercial                                      |   |                       | 20,281 |   |                  |   | 1,400 |   |   |   | 18,881 |   |   |   | 19,355 |   |   |   | 1,080 |   |   |   | 18,275 |   |
| Consumer                                        |   |                       | 2,827  |   |                  |   | 95 |   |   |   | 2,732 |   |   |   | 2,609 |   |   |   | — |   |   |   | 2,609 |   |
| Total      classified loans                     |   | $                          | 67,101 |   |                  | $      | 1,595 |   |   | $ | 65,506 |   |   | $ | 70,366 |   |   | $ | 1,080 |   |   | $ | 69,286 |   |
| Other      real estate owned                    |   |                       | 4,748  |   |                  |   |   |   |   |   | 4,748 |   |   |   | 3,172 |   |   |   |   |   |   |   | 3,172 |   |
| Total      classified assets                    |   | $                          | 71,849 |   |                  | $      | 1,595 |   |   | $ | 70,254 |   |   | $ | 73,538 |   |   | $ | 1,080 |   |   | $ | 72,458 |   |
| Allowance      for loan losses/classified loans |   |                       |   |   |                  |   |   |   |   |   | 21.7 | % |   |   |   |   |   |   |   |   |   |   | 20.5 | % |
|                                            |   |                       |   |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                            |   | At      March 31, 2009 |   |   | At      December 31, 2008 |   |
|-------------------------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                                            |   | Gross                  |   |   | Guaranteed                |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars      in thousands)                     |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Classified      loans:                          |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                            |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential      mortgage                       |   | $                      | 5,582  |   |                      | $      | — |   |   | $ | 5,582 |   |   | $ | 4,532 |   |   | $ | — |   |   | $ | 4,532 |   |
| Residential      construction                   |   |                   | 15,188 |   |                      |   | — |   |   |   | 15,188 |   |   |   | 13,750 |   |   |   | — |   |   |   | 13,750 |   |
| Commercial      real estate                     |   |                   | 32,417 |   |                      |   | — |   |   |   | 32,417 |   |   |   | 14,645 |   |   |   | 111 |   |   |   | 14,534 |   |
| Agriculture                                     |   |                   | 177    |   |                      |   | — |   |   |   | 177 |   |   |   | 32 |   |   |   | — |   |   |   | 32 |   |
| Commercial                                      |   |                   | 16,232 |   |                      |   | 617 |   |   |   | 15,615 |   |   |   | 18,496 |   |   |   | 363 |   |   |   | 18,133 |   |
| Consumer                                        |   |                   | 1,588  |   |                      |   | — |   |   |   | 1,588 |   |   |   | 1,157 |   |   |   | — |   |   |   | 1,157 |   |
| Total      classified loans                     |   | $                      | 71,184 |   |                      | $      | 617 |   |   | $ | 70,567 |   |   | $ | 52,612 |   |   | $ | 474 |   |   | $ | 52,138 |   |
| Other      real estate owned                    |   |                   | 3,657  |   |                      |   |   |   |   |   | 3,657 |   |   |   | 4,368 |   |   |   |   |   |   |   | 4,368 |   |
| Total      classified assets                    |   | $                      | 74,841 |   |                      | $      | 617 |   |   | $ | 74,224 |   |   | $ | 56,978 |   |   | $ | 474 |   |   | $ | 56,506 |   |
| Allowance      for loan losses/classified loans |   |                   |   |   |                      |   |   |   |   |   | 20.5 | % |   |   |   |   |   |   |   |   |   |   | 27.7 | % |
|                                            |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                          |   | At      September 30, 2009 |    |   | At      June 30, 2009 |   |
|-------------------------------|--------|----------------------------|---------|--------|-----------------------|--------|
|                          |   | Gross                      |    |   | Guaranteed            |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars      in thousands)   |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential      mortgage     |   | $                          | 947     |   |                  | $      | — |   |   | $ | 947 |   |   | $ | 469 |   |   | $ | — |   |   | $ | 469 |   |
| Residential      construction |   |                       | 3,961   |   |                  |   | — |   |   |   | 3,961 |   |   |   | 6,953 |   |   |   | — |   |   |   | 6,953 |   |
| Commercial      real estate   |   |                       | 3,667   |   |                  |   | — |   |   |   | 3,666 |   |   |   | 6,778 |   |   |   | — |   |   |   | 6,778 |   |
| Agriculture                   |   |                       | — |   |                  |   | — |   |   |   | — |   |   |   | 129 |   |   |   | — |   |   |   | 129 |   |
| Commercial                    |   |                       | 1,567   |   |                  |   | 792 |   |   |   | 776 |   |   |   | 1,076 |   |   |   | 386 |   |   |   | 690 |   |
| Consumer                      |   |                       | 99      |   |                  |   | — |   |   |   | 99 |   |   |   | 99 |   |   |   | — |   |   |   | 99 |   |
| Total      non-accrual loans  |   | $                          | 10,241  |   |                  | $      | 792 |   |   | $ | 9,449 |   |   | $ | 15,504 |   |   | $ | 386 |   |   | $ | 15,118 |   |
|                          |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                          |   | At      March 31, 2009 |   |   | At      December 31, 2008 |   |
|-------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                          |   | Gross                  |   |   | Guaranteed                |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars      in thousands)   |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Residential      mortgage     |   | $                      | 471    |   |                      | $      | — |   |   | $ | 471 |   |   | $ | 334 |   |   | $ | — |   |   | $ | 334 |   |
| Residential      construction |   |                   | 6,874  |   |                      |   | — |   |   |   | 6,874 |   |   |   | 6,309 |   |   |   | — |   |   |   | 6,309 |   |
| Commercial      real estate   |   |                   | 7,498  |   |                      |   | — |   |   |   | 7,498 |   |   |   | 5,233 |   |   |   | — |   |   |   | 5,233 |   |
| Agriculture                   |   |                   | 177    |   |                      |   | — |   |   |   | 177 |   |   |   | — |   |   |   | — |   |   |   | — |   |
| Commercial                    |   |                   | 1,779  |   |                      |   | 107 |   |   |   | 1,672 |   |   |   | 1,570 |   |   |   | 109 |   |   |   | 1461 |   |
| Consumer                      |   |                   | 99     |   |                      |   | — |   |   |   | 99 |   |   |   | 99 |   |   |   | — |   |   |   | 99 |   |
| Total      non-accrual loans  |   | $                      | 16,898 |   |                      | $      | 107 |   |   | $ | 16,791 |   |   | $ | 13,545 |   |   | $ | 109 |   |   | $ | 13,436 |   |
|                          |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                          |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                            |   | At      September 30, 2009 |    |   | At      June 30, 2009 |   |
|-----------------------------------------------------------------|--------|----------------------------|---------|--------|-----------------------|--------|
|                                                            |   | Gross                      |    |   | Guaranteed            |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars      in thousands)                                     |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual      loans                                          |   | $                          | 10,241  |   |                  | $      | 792 |   |   | $ | 9,449 |   |   | $ | 15,504 |   |   | $ | 386 |   |   | $ | 15,118 |   |
| Loans      90 days past due and still accruing                  |   |                       | — |   |                  |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |
|                                                            |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      non-performing loans                                 |   |                       | 10,241  |   |                  |   | 792 |   |   |   | 9,449 |   |   |   | 15,504 |   |   |   | 386 |   |   |   | 15,118 |   |
| Other      real estate owned                                    |   |                       | 4,748   |   |                  |   | — |   |   |   | 4,748 |   |   |   | 3,172 |   |   |   | — |   |   |   | 3,172 |   |
| Total      non-performing assets                                |   |                       | 14,989  |   |                  |   | 792 |   |   |   | 14,197 |   |   |   | 18,676 |   |   |   | 386 |   |   |   | 18,290 |   |
|                                                            |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing      loans to total loans                        |   |                       |    |   |                  |   |   |   |   |   | 2.0 | % |   |   |   |   |   |   |   |   |   |   | 3.1 | % |
| Non-performing      assets to total assets                      |   |                       |    |   |                  |   |   |   |   |   | 1.9 | % |   |   |   |   |   |   |   |   |   |   | 2.6 | % |
| Allowance      for loan and lease losses to nonperforming loans |   |                       |    |   |                  |   |   |   |   |   | 150.1 | % |   |   |   |   |   |   |   |   |   |   | 93.8 | % |
|                                                            |   |                       |    |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                                            |   | At      March 31, 2009 |   |   | At      December 31, 2008 |   |
|-----------------------------------------------------------------|--------|------------------------|--------|--------|---------------------------|--------|
|                                                            |   | Gross                  |   |   | Guaranteed                |   |   | Net |   |   | Gross |   |   | Guaranteed |   |   | Net |   |
| (dollars      in thousands)                                     |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                            |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-accrual      loans                                          |   | $                      | 16,898 |   |                      | $      | 107 |   |   | $ | 16,791 |   |   | $ | 13,545 |   |   | $ | 109 |   |   | $ | 13,436 |   |
| Loans      90 days past due and still accruing                  |   |                   | 2,511  |   |                      |   | — |   |   |   | 2,511 |   |   |   | 713 |   |   |   | — |   |   |   | 713 |   |
|                                                            |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      non-performing loans                                 |   |                   | 19,409 |   |                      |   | 107 |   |   |   | 19,302 |   |   |   | 14,258 |   |   |   | 109 |   |   |   | 14,149 |   |
| Other      real estate owned                                    |   |                   | 3,657  |   |                      |   | — |   |   |   | 3,657 |   |   |   | 4,368 |   |   |   | — |   |   |   | 4,368 |   |
| Total      non-performing assets                                |   |                   | 23,066 |   |                      |   | 107 |   |   |   | 22,959 |   |   |   | 18,626 |   |   |   | 109 |   |   |   | 18,517 |   |
|                                                            |   |                   |   |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-performing      loans to total loans                        |   |                   |   |   |                      |   |   |   |   |   | 4.0 | % |   |   |   |   |   |   |   |   |   |   | 2.7 | % |
| Non-performing      assets to total assets                      |   |                   |   |   |                      |   |   |   |   |   | 3.3 | % |   |   |   |   |   |   |   |   |   |   | 2.8 | % |
| Allowance      for loan and lease losses to nonperforming loans |   |                   |   |   |                      |   |   |   |   |   | 74.9 | % |   |   |   |   |   |   |   |   |   |   | 102.0 | % |

----

| Analysis      of the Allowance for Loan Losses         |   |
|--------------------------------------------------------|--------|
| (Amounts      in thousands, except percentage amounts) |   |
|                                                   |   |   |   |   |   |   |
|                                                   |   | Nine      months endedSeptember      30, |   |   | Year      endedDecember      31, |   |
|                                                   |   | 2009 |   |   | 2008 |   |   | 2008 |   |
|                                                   |   |   |   |   |   |   |   |   |   |
| Balance      at beginning of period                    |   | $ | 14,435 |   |   | $ | 10,876 |   |   | $ | 10,876 |   |
| Provision      for loan losses                         |   |   | 3,928 |   |   |   | 10,060 |   |   |   | 16,164 |   |
| Loans      charged-off:                                |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                             |   |   | (1,221 | ) |   |   | (537 | ) |   |   | (2,224 | ) |
| Agriculture                                            |   |   | — |   |   |   | — |   |   |   | (88 | ) |
| Real      estate mortgage                              |   |   | (1,328 | ) |   |   | (1,909 | ) |   |   | (299 | ) |
| Real      estate construction                          |   |   | (2,249 | ) |   |   | (5,271 | ) |   |   | (10,265 | ) |
| Consumer      loans to individuals                     |   |   | (281 | ) |   |   | (292 | ) |   |   | (448 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      charged-off                                 |   |   | (5,079 | ) |   |   | (8,009 | ) |   |   | (13,324 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Recoveries:                                            |   |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                                             |   |   | 12 |   |   |   | 150 |   |   |   | 153 |   |
| Agriculture                                            |   |   | — |   |   |   | 51 |   |   |   | 56 |   |
| Real      estate mortgage                              |   |   | — |   |   |   | 57 |   |   |   | 32 |   |
| Real      estate construction                          |   |   | 697 |   |   |   | — |   |   |   | 159 |   |
| Consumer      loans to individuals                     |   |   | 186 |   |   |   | 253 |   |   |   | 319 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total      recoveries                                  |   |   | 895 |   |   |   | 511 |   |   |   | 719 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net      charge-offs                                   |   |   | (4,184 | ) |   |   | (7,498 | ) |   |   | (12,605 | ) |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      at end of period                          |   | $ | 14,179 |   |   | $ | 13,438 |   |   | $ | 14,435 |   |
|                                                   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ratio      of net charge-offs                          |   |   |   |   |   |   |   |   |   |   |   |   |
| To      average loans outstanding during the period    |   |   | (0.83 | %) |   |   | (1.45 | %) |   |   | (2.40 | %) |
| Allowance      for loan losses                         |   |   |   |   |   |   |   |   |   |   |   |   |
| To      total loans at the end of the period           |   |   | 2.85 | % |   |   | 2.46 | % |   |   | 2.71 | % |
| To      non-performing loans at the end of the period  |   |   | 138.45 | % |   |   | 111.65 | % |   |   | 101.24 | % |

----

|                             |   | (in      thousands)     |   |
|----------------------------------|--------|-------------------------|--------|
|                             |   | September      30, 2009 |   |   | December      31, 2008 |   |
| Three      months or less        |   | $                       | 37,704 |   |   | $ | 27,753 |   |
| Over      three to twelve months |   |                    | 50,651 |   |   |   | 26,595 |   |
| Over      twelve months          |   |                    | 10,519 |   |   |   | 5,248 |   |
| Total                            |   | $                       | 98,874 |   |   | $ | 59,596 |   |

|                   |   | (amounts      in thousands except percentage amounts) |   |
|------------------------|--------|-------------------------------------------------------|--------|
|                   |   | Actual                                                |   |   | Adequately |   |   | Well      Capitalized |   |
|                   |   |                                                  |   |   |   |   |   | Capitalized |   |   | Ratio |   |
|                   |   | Capital                                               |   |   | Ratio |   |   | Ratio |   |   | Requirement |   |
| Leverage               |   | $                                                     | 75,961 |   |   |   | 10.62 | % |   |   | 4.0 | % |   |   | 5.0 | % |
| Tier      1 Risk-Based |   | $                                                     | 75,961 |   |   |   | 14.32 | % |   |   | 4.0 | % |   |   | 6.0 | % |
| Total      Risk-Based  |   | $                                                     | 82,696 |   |   |   | 15.59 | % |   |   | 8.0 | % |   |   | 10.0 | % |

----

----

| 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:  | November      9, 2009 | By:    | /s/  Louise      A. Walker                                               |
|   |                  |   |                                                                               |
|   |                  |   | Louise      A. Walker, Sr. Executive Vice President / Chief Financial      Officer |
|   |                  |   | (Principal      Financial Officer and Duly AuthorizedOfficer)                      |