----

----

| FOR QUARTER ENDED JUNE 30, 2009 | COMMISSION FILE NUMBER 0-12436 |
|---------------------------------|--------------------------------|

| GEORGIA                                                        | 58-1492391                              |
|----------------------------------------------------------------|-----------------------------------------|
| (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) | (I.R.S. EMPLOYER IDENTIFICATION NUMBER) |

| YES T | NO £ |
|-------|-----------|

| YES £ | NO £ |
|------------|-----------|

| LARGE ACCELERATED FILER £                | ACCELERATED FILER T              |
|-----------------------------------------------|----------------------------------|
| NON ACCELERATED FILER £                  | SMALLER REPORTING COMPANY £ |
| (DO NOT CHECK IF A SMALLER REPORTING COMPANY) |

| YES £ | NO T |
|------------|------|

| CLASS                      | OUTSTANDING AT AUGUST 7, 2009 |
|----------------------------|-------------------------------|
| COMMON STOCK, $1 PAR VALUE | 7,229,163                     |

----

----

----

TAB

|                                 |                                 |                                                                                       | Page   |
|--------------------------------------|--------------------------------------|--------------------------------------------------------------------------------------------|--------|
| PART I – Financial Information |                                 |                                                                                       |
|                                 |                                 |                                                                                       |   |   |
|                                 | Forward Looking Statement Disclosure | 3                                                                                          |   |
|                                 |                                 |                                                                                       |   |   |
|                                 | Item 1.                              | Financial Statements                                                                       | 4      |   |
|                                 | Item 2.                              | Management’s Discussion and Analysis of Financial Condition and Results of Operation | 31     |   |
|                                 | Item 3.                              | Quantitative and Qualitative Disclosures About Market Risk                                 | 54     |   |
|                                 | Item 4.                              | Controls and Procedures                                                                    | 57     |   |
|                                 |                                 |                                                                                       |   |   |
|                                 |                                 |                                                                                       |   |   |
| PART II – Other Information    |                                 |                                                                                       |
|                                 |                                 |                                                                                       |   |   |
|                                 | Item 1.                              | Legal Proceedings                                                                          | 58     |   |
|                                 | Item 1A.                             | Rick Factors                                                                               | 58     |   |
|                                 | Item 2.                              | Unregistered Sales of Equity Securities and Use of Proceeds                                | 58     |   |
|                                 | Item 3.                              | Defaults Upon Senior Securities                                                            | 58     |   |
|                                 | Item 4.                              | Submission of Matters to a Vote of Security Holders                                        | 58     |   |
|                                 | Item 5.                              | Other Information                                                                          | 58     |   |
|                                 | Item 6.                              | Exhibits                                                                                   | 59     |   |
|                                 | Signatures                           |                                                                                       | 61     |   |

----

Table of Contents

For

|   | · | General economic conditions, whether national or regional, that could affect the demand for loans or lead to increased loan losses; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Competitive factors, including increased competition with community, regional, and national financial institutions, that may lead to pricing pressures that reduce yields the Company achieves on loans and increase rates the Company pays on deposits, loss of the Company’s most valued customers, defection of key employees or groups of employees, or other losses; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increasing or decreasing interest rate environments, including the shape and level of the yield curve, that could lead to decreases in net interest margin, lower net interest and fee income, including lower gains on sales of loans, and changes in the value of the Company’s investment securities; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changing business or regulatory conditions, or new legislation, affecting the financial services industry that could lead to increased costs, changes in the competitive balance among financial institutions, or revisions to our strategic focus; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes or failures in technology or third party vendor relationships in important revenue production or service areas, or increases in required investments in technology that could reduce our revenue, increase our costs or lead to disruptions in our business. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Readers are cautioned not to place undue reliance on our forward-looking statements, which reflect management’s analysis only as of the date of the statements.  The Company does not intend to publicly revise or update forward-looking statements to reflect events or circumstances that arise after the date of this report. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

ITE

|   | A. | CONSOLIDATED BALANCE SHEETS – JUNE 30, 2009 AND DECEMBER 31, 2008. |
|--------|----|--------------------------------------------------------------------------|

|   | B. | CONSOLIDATED STATEMENTS OF INCOME – FOR THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | C. | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME – FOR THE THREE MONTHS ENDED JUNE 30, 2009 AND 2008 AND FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008. |
|--------|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | D. | CONSOLIDATED STATEMENTS OF CASH FLOWS – FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008. |
|--------|----|------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                                                                                                                                            |   | June 30, 2009 |      |   | December 31, 2008 |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-----------|--------|------------------------|--------|
| ASSETS                                                                                                                                                          |   | (Unaudited)        |      |   | (Audited)              |   |
|                                                                                                                                                            |   |               |      |   |                   |   |
| Cash and Cash Equivalents                                                                                                                                       |   |               |      |   |                   |   |
| Cash and Due from Banks                                                                                                                                         |   | $                  | 23,441    |   |                   | $      | 29,427 |   |
| Federal Funds Sold                                                                                                                                              |   |               | --        |   |                   |   | 31 |   |
|                                                                                                                                                            |   |               | 23,441    |   |                   |   | 29,458 |   |
| Interest-Bearing Deposits                                                                                                                                       |   |               | 229       |   |                   |   | 147 |   |
| Investment Securities                                                                                                                                           |   |               |      |   |                   |   |   |   |
| Available for Sale, at Fair Value                                                                                                                               |   |               | 249,850   |   |                   |   | 207,645 |   |
| Held to Maturity, at Cost (Fair Value of $62 and $63, as of June 30, 2009 and December 31, 2008, Respectively)                                                  |   |               | 58        |   |                   |   | 60 |   |
|                                                                                                                                                            |   |               | 249,908   |   |                   |   | 207,705 |   |
|                                                                                                                                                            |   |               |      |   |                   |   |   |   |
| Federal Home Loan Bank Stock, at Cost                                                                                                                           |   |               | 6,345     |   |                   |   | 6,272 |   |
| Loans                                                                                                                                                           |   |               | 963,829   |   |                   |   | 961,037 |   |
| Allowance for Loan Losses                                                                                                                                       |   |               | (18,375   | )      |                   |   | (17,016 | ) |
| Unearned Interest and Fees                                                                                                                                      |   |               | (145      | )      |                   |   | (179 | ) |
|                                                                                                                                                            |   |               | 945,309   |   |                   |   | 943,842 |   |
| Premises and Equipment                                                                                                                                          |   |               | 29,369    |   |                   |   | 29,672 |   |
| Other Real Estate                                                                                                                                               |   |               | 13,040    |   |                   |   | 12,812 |   |
| Goodwill                                                                                                                                                        |   |               | 2,412     |   |                   |   | 2,412 |   |
| Other Intangible Assets                                                                                                                                         |   |               | 349       |   |                   |   | 367 |   |
| Other Assets                                                                                                                                                    |   |               | 24,173    |   |                   |   | 20,095 |   |
| Total Assets                                                                                                                                                    |   | $                  | 1,294,575 |   |                   | $      | 1,252,782 |   |
|                                                                                                                                                            |   |               |      |   |                   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                            |   |               |      |   |                   |   |   |   |
| Deposits                                                                                                                                                        |   |               |      |   |                   |   |   |   |
| Noninterest-Bearing                                                                                                                                             |   | $                  | 71,370    |   |                   | $      | 77,497 |   |
| Interest-Bearing                                                                                                                                                |   |               | 945,169   |   |                   |   | 929,495 |   |
|                                                                                                                                                            |   |               | 1,016,539 |   |                   |   | 1,006,992 |   |
| Borrowed Money                                                                                                                                                  |   |               |      |   |                   |   |   |   |
| Federal Funds Purchased                                                                                                                                         |   |               | 12,697    |   |                   |   | 2,274 |   |
| Securities Sold Under Agreements to Repurchase                                                                                                                  |   |               | 40,000    |   |                   |   | 40,000 |   |
| Subordinated Debentures                                                                                                                                         |   |               | 24,229    |   |                   |   | 24,229 |   |
| Other Borrowed Money                                                                                                                                            |   |               | 91,000    |   |                   |   | 91,000 |   |
|                                                                                                                                                            |   |               | 167,926   |   |                   |   | 157,503 |   |
|                                                                                                                                                            |   |               |      |   |                   |   |   |   |
| Other Liabilities                                                                                                                                               |   |               | 6,416     |   |                   |   | 5,072 |   |
| Commitments and Contingencies                                                                                                                                   |   |               |      |   |                   |   |   |   |
| Stockholders' Equity                                                                                                                                            |   |               |      |   |                   |   |   |   |
| Preferred Stock, Par Value $1,000 a Share, Authorized 10,000,000 Shares, Issued 28,000 Shares                                                                   |   |               | 27,285    |   |                   |   | -- |   |
| Common Stock, Par Value $1 a Share, Authorized 20,000,000 Shares, Issued 7,229,163 and 7,212,313 Shares as of June 30, 2009 and December 31, 2008, Respectively |   |               | 7,229     |   |                   |   | 7,212 |   |
| Paid-In Capital                                                                                                                                                 |   |               | 25,393    |   |                   |   | 24,536 |   |
| Retained Earnings                                                                                                                                               |   |               | 44,190    |   |                   |   | 51,302 |   |
| Restricted Stock - Unearned Compensation                                                                                                                        |   |               | (252      | )      |                   |   | (211 | ) |
| Accumulated Other Comprehensive Income (Loss), Net of Tax                                                                                                       |   |               | (151      | )      |                   |   | 376 |   |
|                                                                                                                                                            |   |               | 103,694   |   |                   |   | 83,215 |   |
| Total Liabilities and Stockholders' Equity                                                                                                                      |   | $                  | 1,294,575 |   |                   | $      | 1,252,782 |   |

----

Table of Contents

|                                                |   | Three Months Ended |      |   | Six Months Ended |   |
|-----------------------------------------------------|--------|--------------------|-----------|--------|------------------|--------|
|                                                |   | 6/30/2009          |      |   | 6/30/2008        |   |   | 6/30/2009 |   |   | 6/30/2008 |   |
| Interest Income                                     |   |               |      |   |             |   |   |   |   |   |   |   |
| Loans, Including Fees                               |   | $                  | 14,576    |   |             | $      | 16,742 |   |   | $ | 28,773 |   |   | $ | 35,091 |   |
| Federal Funds Sold                                  |   |               | 6         |   |             |   | 84 |   |   |   | 11 |   |   |   | 239 |   |
| Deposits with Other Banks                           |   |               | --        |   |             |   | 9 |   |   |   | -- |   |   |   | 20 |   |
| Investment Securities                               |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies                            |   |               | 1,907     |   |             |   | 1,586 |   |   |   | 3,954 |   |   |   | 3,267 |   |
| State, County and Municipal                         |   |               | 60        |   |             |   | 92 |   |   |   | 148 |   |   |   | 230 |   |
| Corporate Obligations and Asset-Backed Securities   |   |               | 90        |   |             |   | 85 |   |   |   | 213 |   |   |   | 179 |   |
| Dividends on Other Investments                      |   |               | --        |   |             |   | 82 |   |   |   | -- |   |   |   | 166 |   |
|                                                |   |               | 16,639    |   |             |   | 18,680 |   |   |   | 33,099 |   |   |   | 39,192 |   |
| Interest Expense                                    |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                            |   |               | 5,553     |   |             |   | 8,475 |   |   |   | 11,726 |   |   |   | 18,147 |   |
| Federal Funds Purchased                             |   |               | 204       |   |             |   | 24 |   |   |   | 436 |   |   |   | 52 |   |
| Borrowed Money                                      |   |               | 943       |   |             |   | 1,138 |   |   |   | 1,938 |   |   |   | 2,345 |   |
|                                                |   |               | 6,700     |   |             |   | 9,637 |   |   |   | 14,100 |   |   |   | 20,544 |   |
|                                                |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net Interest Income                                 |   |               | 9,939     |   |             |   | 9,043 |   |   |   | 18,999 |   |   |   | 18,648 |   |
| Provision for Loan Losses                           |   |               | 13,355    |   |             |   | 4,071 |   |   |   | 17,580 |   |   |   | 5,142 |   |
| Net Interest Income After Provision for Loan Losses |   |               | (3,416    | )      |             |   | 4,972 |   |   |   | 1,419 |   |   |   | 13,506 |   |
|                                                |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest Income                                  |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Service Charges on Deposits                         |   |               | 1,042     |   |             |   | 1,173 |   |   |   | 2,030 |   |   |   | 2,338 |   |
| Other Service Charges, Commissions and Fees         |   |               | 252       |   |             |   | 241 |   |   |   | 488 |   |   |   | 495 |   |
| Mortgage Fee Income                                 |   |               | 129       |   |             |   | 174 |   |   |   | 231 |   |   |   | 343 |   |
| Securities Gains                                    |   |               | 221       |   |             |   | 614 |   |   |   | 2,538 |   |   |   | 1,184 |   |
| Other                                               |   |               | 360       |   |             |   | 832 |   |   |   | 679 |   |   |   | 1,045 |   |
|                                                |   |               | 2,004     |   |             |   | 3,034 |   |   |   | 5,966 |   |   |   | 5,405 |   |
| Noninterest Expenses                                |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Salaries and Employee Benefits                      |   |               | 3,583     |   |             |   | 4,029 |   |   |   | 7,390 |   |   |   | 8,432 |   |
| Occupancy and Equipment                             |   |               | 1,041     |   |             |   | 1,061 |   |   |   | 2,050 |   |   |   | 2,068 |   |
| Other                                               |   |               | 3,679     |   |             |   | 2,624 |   |   |   | 6,224 |   |   |   | 4,971 |   |
|                                                |   |               | 8,303     |   |             |   | 7,714 |   |   |   | 15,664 |   |   |   | 15,471 |   |
|                                                |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Income Before Income Taxes                          |   |               | (9,715    | )      |             |   | 292 |   |   |   | (8,279 | ) |   |   | 3,440 |   |
| Income Taxes                                        |   |               | (3,318    | )      |             |   | -- |   |   |   | (2,960 | ) |   |   | 935 |   |
| Net Income (Loss)                                   |   |               | (6,397    | )      |             |   | 292 |   |   |   | (5,319 | ) |   |   | 2,505 |   |
| Preferred Stock Dividends                           |   |               | 350       |   |             |   | -- |   |   |   | 665 |   |   |   | -- |   |
| Net Income (Loss) Available to Common Stockholders  |   | $                  | (6,747    | )      |             | $      | 292 |   |   | $ | (5,984 | ) |   | $ | 2,505 |   |
| Net Income (Loss) Per Share of Common Stock         |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   | $                  | (0.94     | )      |             | $      | 0.04 |   |   | $ | (0.83 | ) |   | $ | 0.35 |   |
| Diluted                                             |   | $                  | (0.94     | )      |             | $      | 0.04 |   |   | $ | (0.83 | ) |   | $ | 0.35 |   |
| Cash Dividends Declared Per Share of Common Stock   |   | $                  | 0.05      |   |             | $      | 0.10 |   |   | $ | 0.15 |   |   | $ | 0.20 |   |
| Weighted Average Basic Shares Outstanding           |   |               | 7,209,865 |   |             |   | 7,197,607 |   |   |   | 7,206,275 |   |   |   | 7,194,734 |   |
| Weighted Average Diluted Shares Outstanding         |   |               | 7,209,865 |   |             |   | 7,197,607 |   |   |   | 7,206,275 |   |   |   | 7,194,734 |   |

----

Table of Contents

|                                                                                                                                  |   | Three Months Ended |   |   | Six Months Ended |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                                                                                                  |   | 06/30/09           |   |   | 06/30/08         |   |   | 06/30/09 |   |   | 06/30/08 |   |
|                                                                                                                                  |   |               |   |   |             |   |   |   |   |   |   |   |
| Net Income (Loss)                                                                                                                     |   | $                  | (6,397 | )      |             | $      | 292 |   |   | $ | (5,319 | ) |   | $ | 2,505 |   |
|                                                                                                                                  |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Other Comprehensive Income (Loss), Net of Tax                                                                                         |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Gains (Losses) on Securities Arising During the Year                                                                                  |   |               | 1,368  |   |             |   | (1,426 | ) |   |   | 1,148 |   |   |   | (311 | ) |
| Reclassification Adjustment                                                                                                           |   |               | (146   | )      |             |   | (405 | ) |   |   | (1,675 | ) |   |   | (781 | ) |
|                                                                                                                                  |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Change in Net Unrealized Gains (Losses) on Securities Available for Sale, Net of Reclassification Adjustment and Tax Effect |   |               | 1,222  |   |             |   | (1,831 | ) |   |   | (527 | ) |   |   | (1,092 | ) |
|                                                                                                                                  |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Comprehensive Income (Loss)                                                                                                           |   | $                  | (5,175 | )      |             | $      | (1,539 | ) |   | $ | (5,846 | ) |   | $ | 1,413 |   |

----

Table of Contents

|                                                                              |   | 2009   |     |   | 2008   |   |
|-----------------------------------------------------------------------------------|--------|--------|----------|--------|--------|--------|
| CASH FLOWS FROM OPERATING ACTIVITIES                                              |   |   |     |   |   |   |
| Net Income (Loss)                                                                 |   | $      | (5,319   | )      |   | $      | 2,505 |   |
| Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: |   |   |     |   |   |   |   |   |
| Depreciation                                                                      |   |   | 1,013    |   |   |   | 992 |   |
| Provision for Loan Losses                                                         |   |   | 17,580   |   |   |   | 5,142 |   |
| Securities Gains                                                                  |   |   | (2,538   | )      |   |   | (1,184 | ) |
| Amortization and Accretion                                                        |   |   | 1,713    |   |   |   | 320 |   |
| Loss on Sale of Other Real Estate and Repossessions                               |   |   | 13       |   |   |   | 42 |   |
| Gain on Sale of Property/Equipment                                                |   |   | (75      | )      |   |   | (10 | ) |
| Cash Surrender Value of Life Insurance                                            |   |   | (112     | )      |   |   | (142 | ) |
| Decrease (Increase) in Other Prepaids, Deferrals and Accruals, Net                |   |   | (2,466   | )      |   |   | 208 |   |
|                                                                              |   |   | 9,809    |   |   |   | 7,873 |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                              |   |   |     |   |   |   |   |   |
| Federal Home Loan Bank Stock                                                      |   |   | (73      | )      |   |   | (560 | ) |
| Purchases of Investment Securities Available for Sale                             |   |   | (314,588 | )      |   |   | (108,327 | ) |
| Proceeds from Maturities, Calls, and Paydowns of                                  |   |   |     |   |   |   |   |   |
| Investment Securities:                                                            |   |   |     |   |   |   |   |   |
| Available for Sale                                                                |   |   | 27,797   |   |   |   | 34,724 |   |
| Held to Maturity                                                                  |   |   | 5        |   |   |   | 7 |   |
| Proceeds from Sale of Investment Securities                                       |   |   |     |   |   |   |   |   |
| Available for Sale                                                                |   |   | 244,839  |   |   |   | 63,111 |   |
| Interest-Bearing Deposits in Other Banks                                          |   |   | (82      | )      |   |   | (317 | ) |
| Net Loans to Customers                                                            |   |   | (24,145  | )      |   |   | (16,098 | ) |
| Purchase of Premises and Equipment                                                |   |   | (745     | )      |   |   | (1,789 | ) |
| Other Real Estate and Repossessions                                               |   |   | 5,000    |   |   |   | 1,865 |   |
| Proceeds from Sale of Premises and Equipment                                      |   |   | 111      |   |   |   | 10 |   |
| Other Additions and Adjustments                                                   |   |   | (17      | )      |   |   | -- |   |
|                                                                              |   |   | (61,898  | )      |   |   | (27,374 | ) |
| CASH FLOWS FROM FINANCING ACTIVITIES                                              |   |   |     |   |   |   |   |   |
| Noninterest-Bearing Customer Deposits                                             |   |   | (6,127   | )      |   |   | (10,166 | ) |
| Increase (Decrease) in Interest-Bearing Customer Deposits                         |   |   | 15,674   |   |   |   | (32,113 | ) |
| Federal Funds Purchased                                                           |   |   | 10,423   |   |   |   | 15,119 |   |
| Securities Sold Under Agreements to Repurchase                                    |   |   | --       |   |   |   | 20,000 |   |
| Dividends Paid On Common Stock                                                    |   |   | (1,408   | )      |   |   | (1,388 | ) |
| Dividends Paid On Preferred Stock                                                 |   |   | (490     | )      |   |   | -- |   |
| Proceeds from Other Borrowed Money                                                |   |   | 19,000   |   |   |   | 43,000 |   |
| Principal Payments on Other Borrowed Money                                        |   |   | (19,000  | )      |   |   | (32,000 | ) |
| Proceeds Allocated to Issuance of Preferred Stock                                 |   |   | 27,215   |   |   |   | -- |   |
| Proceeds Allocated to Warrants Issued                                             |   |   | 785      |   |   |   | -- |   |
|                                                                              |   |   | 46,072   |   |   |   | 2,452 |   |
|                                                                              |   |   |     |   |   |   |   |   |
| Net Decrease in Cash and Cash Equivalents                                         |   |   | (6,017   | )      |   |   | (17,049 | ) |
| Cash and Cash Equivalents at Beginning of Period                                  |   |   | 29,458   |   |   |   | 50,106 |   |
| Cash and Cash Equivalents at End of Period                                        |   | $      | 23,441   |   |   | $      | 33,057 |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

| Description             |   | Life inYears |   | Method .                      |
|-------------------------|--------|--------------|--------|-------------------------------|
|                    |   |         |   |                          |
| Banking Premises        |   | 15-40        |   | Straight-Line and Accelerated |
| Furniture and Equipment |   | 5-10         |   | Straight-Line and Accelerated |
| Leasehold Improvements  |   | 5-20         |   | Straight-Line                 |

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                                          |   | June 30, 2009 |   |   | December 31, 2008 |   |
|-----------------------------------------------|--------|--------------------|--------|--------|------------------------|--------|
| Cash on Hand and Cash Items                   |   | $                  | 10,082 |   |                   | $      | 9,228 |   |
| Noninterest-Bearing Deposits with Other Banks |   |               | 13,359 |   |                   |   | 20,199 |   |
|                                          |   | $                  | 23,441 |   |                   | $      | 29,427 |   |

----

Table of Contents

|                           |   | Amortized Cost |    |   | Gross Unrealized Gains |   |     | Gross Unrealized Losses |   |   | Fair Value |   |
|--------------------------------|--------|----------------|---------|--------|------------------------|--------|----------|-------------------------|--------|--------|------------|--------|
| Securities Available for Sale: |   |           |    |   |                   |   |     |                    |   |   |       |   |
| U.S. Government Agencies       |   |           |    |   |                   |   |     |                    |   |   |       |   |
| Mortgage-Backed                |   | $              | 238,596 |   |                   | $      | 1,531    |                    |   | $      | (527       | )      |   | $ | 239,600 |   |
| State, County & Municipal  |   |           | 6,014   |   |                   |   | 29       |                    |   |   | (154       | )      |   |   | 5,889 |   |
| Corporate Obligations          |   |           | 4,453   |   |                   |   | 69       |                    |   |   | (566       | )      |   |   | 3,956 |   |
| Asset-Backed Securities        |   |           | 1,016   |   |                   |   |  -- |                    |   |   | (611       | )      |   |   | 405 |   |
|                           |   | $              | 250,079 |   |                   | $      | 1,629    |                    |   | $      | (1,858     | )      |   | $ | 249,850 |   |
|                           |   |           |    |   |                   |   |     |                    |   |   |       |   |   |   |   |   |
| Securities Held to Maturity:   |   |           |    |   |                   |   |     |                    |   |   |       |   |   |   |   |   |
| State, County and Municipal    |   | $              | 58      |   |                   | $      | 4        |                    |   | $      | --         |   |   | $ | 62 |   |

|                                   |   | Securities         |    |
|----------------------------------------|--------|--------------------|---------|
|                                   |   | Available for Sale |    |   | Held to Maturity |   |
|                                   |   | Amortized Cost     |    |   | Fair Value |   |   | Amortized Cost |   |   | Fair Value |   |
|                                   |   |               |    |   |   |   |   |   |   |   |   |   |
| Due in One Year or Less                |   | $                  | --      |   |   |   | -- |   |   |   | -- |   |   |   | -- |   |
| Due After One Year Through Five Years  |   |               | 4,610   |   |   |   | 4,297 |   |   |   | -- |   |   |   | -- |   |
| Due After Five Years Through Ten Years |   |               | 3,222   |   |   |   | 3,264 |   |   | $ | 58 |   |   | $ | 62 |   |
| Due After Ten Years                    |   |               | 3,651   |   |   |   | 2,689 |   |   |   | -- |   |   |   | -- |   |
|                                   |   |               | 11,483  |   |   |   | 10,250 |   |   |   | 58 |   |   |   | 62 |   |
|                                   |   |               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-Backed Securities             |   |               | 238,596 |   |   |   | 239,600 |   |   |   | -- |   |   |   | -- |   |
|                                   |   | $                  | 250,079 |   |   | $ | 249,850 |   |   | $ | 58 |   |   | $ | 62 |   |

----

Table of Contents

|                           |   | Amortized Cost |    |   | Gross Unrealized Gains |   |     | Gross Unrealized Losses |   |   | Fair Value |   |
|--------------------------------|--------|----------------|---------|--------|------------------------|--------|----------|-------------------------|--------|--------|------------|--------|
| Securities Available for Sale: |   |           |    |   |                   |   |     |                    |   |   |       |   |
| U.S. Government Agencies       |   |           |    |   |                   |   |     |                    |   |   |       |   |
| Mortgage-Backed                |   | $              | 190,198 |   |                   | $      | 1,862    |                    |   | $      | (310       | )      |   | $ | 191,750 |   |
| State, County & Municipal  |   |           | 9,227   |   |                   |   | 44       |                    |   |   | (220       | )      |   |   | 9,051 |   |
| Corporate Obligations          |   |           | 6,650   |   |                   |   | 155      |                    |   |   | (629       | )      |   |   | 6,176 |   |
| Asset-Backed Securities        |   |           | 1,000   |   |                   |   |  -- |                    |   |   | (332       | )      |   |   | 668 |   |
|                           |   | $              | 207,075 |   |                   | $      | 2,061    |                    |   | $      | (1,491     | )      |   | $ | 207,645 |   |
|                           |   |           |    |   |                   |   |     |                    |   |   |       |   |   |   |   |   |
| Securities Held to Maturity:   |   |           |    |   |                   |   |     |                    |   |   |       |   |   |   |   |   |
| State, County and Municipal    |   | $              | 60      |   |                   | $      | 3        |                    |   | $      | --         |   |   | $ | 63 |   |

|                        |   | Less Than 12 Months |   |   | 12 Months or Greater    |   |   | Total      |   |
|-----------------------------|--------|---------------------|--------|--------|-------------------------|--------|--------|------------|--------|
|                        |   |                |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |
|                        |   | Fair Value          |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |   | Fair Value |   |   | Gross Unrealized Losses |   |
|                        |   |                |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |
| June 30, 2009               |   |                |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies    |   |                |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |
| Mortgage-Backed             |   | $                   | 60,228 |   |                    | $      | (516   | )          |   | $ | 354 |   |   | $ | (11 | ) |   | $ | 60,582 |   |   | $ | (527 | ) |
| State, County and Municipal |   |                | 2,341  |   |                    |   | (127   | )          |   |   | 424 |   |   |   | (27 | ) |   |   | 2,765 |   |   |   | (154 | ) |
| Corporate Obligations       |   |                | 2,886  |   |                    |   | (566   | )          |   |   | --- |   |   |   | --- |   |   |   | 2,886 |   |   |   | (566 | ) |
| Asset-Backed Securities     |   |                | 405    |   |                    |   | (611   | )          |   |   | --- |   |   |   | --- |   |   |   | 405 |   |   |   | (611 | ) |
|                        |   | $                   | 65,860 |   |                    | $      | (1,820 | )          |   | $ | 778 |   |   | $ | (38 | ) |   | $ | 66,638 |   |   | $ | (1,858 | ) |
|                        |   |                |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| December 31, 2008           |   |                |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies    |   |                |   |   |                    |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-Backed             |   | $                   | 52,277 |   |                    | $      | (267   | )          |   | $ | 708 |   |   | $ | (43 | ) |   | $ | 52,985 |   |   | $ | (310 | ) |
| State, County and Municipal |   |                | 5,053  |   |                    |   | (212   | )          |   |   | 92 |   |   |   | (8 | ) |   |   | 5,145 |   |   |   | (220 | ) |
| Corporate Obligations       |   |                | 5,021  |   |                    |   | (629   | )          |   |   | --- |   |   |   | --- |   |   |   | 5,021 |   |   |   | (629 | ) |
| Asset-Backed Securities     |   |                | 668    |   |                    |   | (332   | )          |   |   | --- |   |   |   | --- |   |   |   | 668 |   |   |   | (332 | ) |
|                        |   | $                   | 63,019 |   |                    | $      | (1,440 | )          |   | $ | 800 |   |   | $ | (51 | ) |   | $ | 63,819 |   |   | $ | (1,491 | ) |

----

Table of Contents

|                                   |   | June 30, 2009 |    |   | December 31, 2008 |   |
|----------------------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                                   |   |               |    |   |                   |   |
| Commercial, Financial and Agricultural |   | $                  | 88,666  |   |                   | $      | 86,379 |   |
| Real Estate – Construction       |   |               | 136,785 |   |                   |   | 160,374 |   |
| Real Estate – Farmland           |   |               | 56,146  |   |                   |   | 54,159 |   |
| Real Estate – Other              |   |               | 625,649 |   |                   |   | 600,654 |   |
| Installment Loans to Individuals       |   |               | 40,724  |   |                   |   | 44,163 |   |
| All Other Loans                        |   |               | 15,859  |   |                   |   | 15,308 |   |
|                                   |   | $                  | 963,829 |   |                   | $      | 961,037 |   |

|                                    |   | June 30, 2009 |    |   | June 30, 2008 |   |
|-----------------------------------------|--------|--------------------|---------|--------|--------------------|--------|
|                                    |   |               |    |   |               |   |
| Balance, Beginning                      |   | $                  | 17,016  |   |               | $      | 15,513 |   |
| Provision Charged to Operating Expenses |   |               | 17,580  |   |               |   | 5,142 |   |
| Loans Charged Off                       |   |               | (16,421 | )      |               |   | (3,458 | ) |
| Loan Recoveries                         |   |               | 200     |   |               |   | 269 |   |
|                                    |   |               |    |   |               |   |   |   |
| Balance, Ending                         |   | $                  | 18,375  |   |               | $      | 17,466 |   |

----

Table of Contents

|                              |   | June 30, 2009 |    |   | December 31, 2008 |   |
|-----------------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                              |   |               |    |   |                   |   |
| Land                              |   | $                  | 7,805   |   |                   | $      | 7,805 |   |
| Building                          |   |               | 23,605  |   |                   |   | 23,461 |   |
| Furniture, Fixtures and Equipment |   |               | 13,973  |   |                   |   | 13,530 |   |
| Leasehold Improvements            |   |               | 995     |   |                   |   | 990 |   |
| Construction in Progress          |   |               | 186     |   |                   |   | 127 |   |
|                              |   |               | 46,564  |   |                   |   | 45,913 |   |
|                              |   |               |    |   |                   |   |   |   |
| Accumulated Depreciation          |   |               | (17,195 | )      |                   |   | (16,241 | ) |
|                              |   | $                  | 29,369  |   |                   | $      | 29,672 |   |

|                         |   | Six Months Ended   |   |   | Six Months Ended   |   |
|------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                         |   | June 30, 2009 |   |   | June 30, 2008 |   |
|                         |   |               |   |   |               |   |
| Goodwill                     |   |               |   |   |               |   |
| Balance, Beginning           |   | $                  | 2,412  |   |               | $      | 2,412 |   |
| Goodwill Acquired            |   |               | --     |   |               |   | -- |   |
| Balance, Ending              |   | $                  | 2,412  |   |               | $      | 2,412 |   |
|                         |   |               |   |   |               |   |   |   |
| Net Core Deposit, Intangible |   |               |   |   |               |   |   |   |
| Balance, Beginning           |   | $                  | 367    |   |               | $      | 402 |   |
| Amortization Expense         |   |               | (18    | )      |               |   | (18 | ) |
| Balance, Ending              |   | $                  | 349    |   |               | $      | 384 |   |

| 2009                |   | $      | 18  |   |
|---------------------|--------|--------|-----|--------|
| 2010                |   |   | 36  |   |
| 2011                |   |   | 36  |   |
| 2012                |   |   | 36  |   |
| 2013 and thereafter |   |   | 223 |   |
|                |   | $      | 349 |   |

----

Table of Contents

|   | · | Level 1 | inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
|--------|--------|---------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 | inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|--------|--------|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 3 | inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
|--------|--------|---------|-----------------------------------------------------------------------------------------------------|

----

Table of Contents

|                          |   |               |    |   | Fair Value Measurements at Reporting Date Using               |   |
|-------------------------------|--------|--------------------|---------|--------|---------------------------------------------------------------|--------|
|                          |   | June 30, 2009 |    |   | Quoted Prices in Active Markets for Identical Assets(Level 1) |   |   | Significant Other Observable Inputs(Level 2) |   |   | Significant Unobservable Inputs(Level 3) |   |
| Recurring                     |   |               |    |   |                                                          |   |   |   |   |   |   |   |
| Securities Available for Sale |   |               |    |   |                                                          |   |   |   |   |   |   |   |
| Mortgage-backed               |   | $                  | 239,600 |   |                                                          | $      | --- |   |   | $ | 239,600 |   |   | $ | --- |   |
| State,County & Municipal  |   |               | 5,889   |   |                                                          |   | --- |   |   |   | 5,889 |   |   |   | --- |   |
| Corporate Obligations         |   |               | 3,956   |   |                                                          |   | --- |   |   |   | 3,194 |   |   |   | 762 |   |
| Asset-Backed Securities       |   |               | 405     |   |                                                          |   | --- |   |   |   | --- |   |   |   | 405 |   |
|                          |   | $                  | 249,850 |   |                                                          | $      | --- |   |   | $ | 248,683 |   |   | $ | 1,167 |   |
|                          |   |               |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Nonrecurring                  |   |               |    |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |
| Impaired Loans                |   | $                  | 31,159  |   |                                                          | $      | --- |   |   | $ | --- |   |   | $ | 31,159 |   |

|                                             |   | Available for Sale Securities |   |
|--------------------------------------------------|--------|-------------------------------|--------|
|                                             |   | (In Thousands)                |   |
|                                             |   |                          |   |
| Balance, Beginning                               |   | $                             | 1,427  |   |
| Total Unrealized Gains (Losses) Included In      |   |                          |   |   |
| Net Income                                       |   |                          | ---    |   |
| Other Comprehensive Income                       |   |                          | (260   | ) |
| Purchases, Sales, Issuances and Settlements, Net |   |                          | ---    |   |
| Transfers In and (Out) of Level 3                |   |                          | ---    |   |
|                                             |   |                          |   |   |
| Balance, Ending                                  |   | $                             | 1,167  |   |

----

Table of Contents

|                    |   | June 30, 2009 |    |   | December 31, 2008 |   |
|-------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                    |   |               |    |   |                   |   |
| Interest-Bearing Demand |   | $                  | 203,285 |   |                   | $      | 194,211 |   |
| Savings                 |   |               | 36,285  |   |                   |   | 33,349 |   |
| Time, $100,000 and Over |   |               | 353,288 |   |                   |   | 333,498 |   |
| Other Time              |   |               | 352,311 |   |                   |   | 368,437 |   |
|                    |   | $                  | 945,169 |   |                   | $      | 929,495 |   |

| Maturity             |   | June 30, 2009 |    |   | December 31, 2008 |   |
|----------------------|--------|--------------------|---------|--------|------------------------|--------|
| One Year and Under   |   | $                  | 611,892 |   |                   | $      | 632,562 |   |
| One to Three Years   |   |               | 89,012  |   |                   |   | 62,929 |   |
| Three Years and Over |   |               | 4,695   |   |                   |   | 6,444 |   |
|                 |   | $                  | 705,599 |   |                   | $      | 701,935 |   |

|                            |   | June 30, 2009 |   |   | December 31, 2008 |   |
|---------------------------------|--------|--------------------|--------|--------|------------------------|--------|
| Federal Home Loan Bank Advances |   | $                  | 91,000 |   |                   | $      | 91,000 |   |

----

Table of Contents

|                |   |   |   |
|---------------------|--------|--------|--------|
| Year                |   | Amount |   |
| 2009                |   | $      | 19,000 |   |
| 2010                |   |   | 1,000  |   |
| 2011                |   |   | --     |   |
| 2012                |   |   | 41,000 |   |
| 2013 and Thereafter |   |   | 30,000 |   |
|                |   | $      | 91,000 |   |

----

Table of Contents

|                      |   | Contract Amount    |   |
|---------------------------|--------|--------------------|--------|
|                      |   | June 30, 2009 |   |   | December 31, 2008 |   |
|                      |   |               |   |   |   |   |
| Loan Commitments          |   | $                  | 72,485 |   |   | $ | 73,610 |   |
| Standby Letters of Credit |   |               | 1,873  |   |   |   | 2,710 |   |

----

Table of Contents

----

Table of Contents

|                                           |   | June 30, 2009 |      |   | December 31, 2008 |   |
|------------------------------------------------|--------|--------------------|-----------|--------|------------------------|--------|
|                                           |   | Carrying Amount    |      |   | Estimated Fair Value   |   |   | Carrying Amount |   |   | Estimated Fair Value |   |
|                                           |   |               |      |   | (in thousands)         |   |   |   |   |
|                                           |   |               |      |   |                   |   |   |   |   |   |   |   |
| Assets                                         |   |               |      |   |                   |   |   |   |   |   |   |   |
| Cash and Short-Term Investments                |   | $                  | 23,670    |   |                   | $      | 23,670 |   |   | $ | 29,605 |   |   | $ | 29,605 |   |
| Investment Securities Available for Sale       |   |               | 249,850   |   |                   |   | 249,850 |   |   |   | 207,645 |   |   |   | 207,645 |   |
| Investment Securities Held to Maturity         |   |               | 58        |   |                   |   | 62 |   |   |   | 60 |   |   |   | 63 |   |
| Federal Home Loan Bank Stock                   |   |               | 6,345     |   |                   |   | 6,345 |   |   |   | 6,272 |   |   |   | 6,272 |   |
| Loans, Net                                     |   |               | 945,309   |   |                   |   | 969,649 |   |   |   | 943,841 |   |   |   | 959,613 |   |
|                                           |   |               |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                    |   |               |      |   |                   |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                       |   |               | 1,016,539 |   |                   |   | 1,019,771 |   |   |   | 1,006,991 |   |   |   | 1,009,967 |   |
| Federal Funds Purchased                        |   |               | 12,697    |   |                   |   | 12,697 |   |   |   | 2,274 |   |   |   | 2,274 |   |
| Subordinated Debentures                        |   |               | 24,229    |   |                   |   | 24,229 |   |   |   | 24,229 |   |   |   | 24,229 |   |
| Securities Sold Under Agreements to Repurchase |   |               | 40,000    |   |                   |   | 40,687 |   |   |   | 40,000 |   |   |   | 40,756 |   |
| Other Borrowed Money                           |   |               | 91,000    |   |                   |   | 90,663 |   |   |   | 91,000 |   |   |   | 94,067 |   |

----

Table of Contents

|                    |   | Actual |    |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized Under Prompt Corrective Action Provisions |   |
|-------------------------|--------|--------|---------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
|                    |   | Amount |    |   | Ratio                         |   |   | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of June 30, 2009     |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Total Capital           |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| to Risk-Weighted Assets |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Consolidated            |   | $      | 136,812 |   |                          |   | 14.07  | %                                                                |   | $ | 77,770 |   |   |   | 8.00 | % |   | NA |   |   | NA |   |
| Colony Bank             |   |   | 134,898 |   |                          |   | 13.91  |                                                             |   |   | 77,568 |   |   |   | 8.00 |   |   | $ | 96,960 |   |   |   | 10.00 | % |
|                    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital          |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to Risk-Weighted Assets |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated            |   |   | 124,584 |   |                          |   | 12.82  |                                                             |   |   | 38,885 |   |   |   | 4.00 |   |   | NA |   |   | NA |   |
| Colony Bank             |   |   | 122,701 |   |                          |   | 12.65  |                                                             |   |   | 38,784 |   |   |   | 4.00 |   |   |   | 58,176 |   |   |   | 6.00 |   |
|                    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital          |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to Average Assets       |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated            |   |   | 124,584 |   |                          |   | 9.74   |                                                             |   |   | 51,189 |   |   |   | 4.00 |   |   | NA |   |   | NA |   |
| Colony Bank             |   |   | 122,701 |   |                          |   | 9.57   |                                                             |   |   | 51,305 |   |   |   | 4.00 |   |   |   | 64,131 |   |   |   | 5.00 |   |

|                    |   | Actual |    |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized Under Prompt Corrective Action Provisions |   |
|-------------------------|--------|--------|---------|--------|-------------------------------|--------|--------|------------------------------------------------------------------|--------|
|                    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
|                    |   | Amount |    |   | Ratio                         |   |   | Amount                                                           |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of December 31, 2008 |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
|                    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Total Capital           |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| to Risk-Weighted Assets |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |
| Consolidated            |   | $      | 115,604 |   |                          |   | 12.06  | %                                                                |   | $ | 76,684 |   |   |   | 8.00 | % |   | NA |   |   | NA |   |
| Colony Bank             |   |   | 114,545 |   |                          |   | 11.97  |                                                             |   |   | 76,547 |   |   |   | 8.00 |   |   | $ | 95,684 |   |   |   | 10.00 | % |
|                    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital          |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to Risk-Weighted Assets |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated            |   |   | 103,560 |   |                          |   | 10.80  |                                                             |   |   | 38,342 |   |   |   | 4.00 |   |   | NA |   |   | NA |   |
| Colony Bank             |   |   | 102,522 |   |                          |   | 10.71  |                                                             |   |   | 38,273 |   |   |   | 4.00 |   |   |   | 57,470 |   |   |   | 6.00 |   |
|                    |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital          |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to Average Assets       |   |   |    |   |                          |   |   |                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consolidated            |   |   | 103,560 |   |                          |   | 8.39   |                                                             |   |   | 49,380 |   |   |   | 4.00 |   |   | NA |   |   | NA |   |
| Colony Bank             |   |   | 102,522 |   |                          |   | 8.33   |                                                             |   |   | 49,205 |   |   |   | 4.00 |   |   |   | 61,506 |   |   |   | 5.00 |   |

----

Table of Contents

| ASSETS                                                                                                                                                         |   | June 30, 2009 |    |   | December 31, 2008 |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                                                                                                                                                           |   | (Unaudited)        |    |   | (Audited)              |   |
|                                                                                                                                                           |   |               |    |   |                   |   |
| Cash                                                                                                                                                           |   | $                  | 83      |   |                   | $      | 2 |   |
| Premises and Equipment, Net                                                                                                                                    |   |               | 1,587   |   |                   |   | 1,542 |   |
| Investment in Subsidiaries, at Equity                                                                                                                          |   |               | 125,868 |   |                   |   | 105,506 |   |
| Other                                                                                                                                                          |   |               | 1,076   |   |                   |   | 1,294 |   |
|                                                                                                                                                           |   |               |    |   |                   |   |   |   |
| Totals Assets                                                                                                                                                  |   | $                  | 128,614 |   |                   | $      | 108,344 |   |
|                                                                                                                                                           |   |               |    |   |                   |   |   |   |
| LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                     |   |               |    |   |                   |   |   |   |
| Liabilities                                                                                                                                                    |   |               |    |   |                   |   |   |   |
| Dividends Payable                                                                                                                                              |   |               | 527     |   |                   | $      | 703 |   |
| Other                                                                                                                                                          |   |               | 164     |   |                   |   | 197 |   |
|                                                                                                                                                           |   |               | 691     |   |                   |   | 900 |   |
| Subordinated Debt                                                                                                                                              |   |               | 24,229  |   |                   |   | 24,229 |   |
|                                                                                                                                                           |   |               |    |   |                   |   |   |   |
|                                                                                                                                                           |   |               |    |   |                   |   |   |   |
| Stockholders’ Equity                                                                                                                                     |   |               |    |   |                   |   |   |   |
| Preferred Stock, Par Value $1,000 a Share; Authorized 10,000,000Shares, Issued 28,000 Shares as of June 30, 2009                                               |   |               | 27,285  |   |                   |   | --- |   |
| Common Stock, Par Value $1 a Share; Authorized 20,000,000Shares, Issued 7,229,163 and 7,212,313 Shares as of June 30, 2009 and December 31, 2008, Respectively |   |               | 7,229   |   |                   |   | 7,212 |   |
| Paid-In Capital                                                                                                                                                |   |               | 25,393  |   |                   |   | 24,536 |   |
| Retained Earnings                                                                                                                                              |   |               | 44,190  |   |                   |   | 51,302 |   |
| Restricted Stock - Unearned Compensation                                                                                                                       |   |               | (252    | )      |                   |   | (211 | ) |
| Accumulated Other Comprehensive Loss, Net of Tax                                                                                                               |   |               | (151    | )      |                   |   | 376 |   |
|                                                                                                                                                           |   |               | 103,694 |   |                   |   | 83,215 |   |
|                                                                                                                                                           |   |               |    |   |                   |   |   |   |
| Total Liabilities and Stockholders' Equity                                                                                                                     |   | $                  | 128,614 |   |                   | $      | 108,344 |   |

----

Table of Contents

|                                                                            |   | JUNE 30, 2009 |   |   | JUNE 30, 2008 |   |
|---------------------------------------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
|                                                                            |   |               |   |   |               |   |
| Income                                                                          |   |               |   |   |               |   |
| Dividends from Subsidiaries                                                     |   | $                  | 812    |   |               | $      | 2,521 |   |
| Other                                                                           |   |               | 52     |   |               |   | 47 |   |
|                                                                            |   |               | 864    |   |               |   | 2,568 |   |
| Expenses                                                                        |   |               |   |   |               |   |   |   |
| Interest                                                                        |   |               | 386    |   |               |   | 666 |   |
| Salaries and Employee Benefits                                                  |   |               | 427    |   |               |   | 474 |   |
| Other                                                                           |   |               | 430    |   |               |   | 728 |   |
|                                                                            |   |               | 1,243  |   |               |   | 1,868 |   |
|                                                                            |   |               |   |   |               |   |   |   |
| Income (Loss) Before Taxes and Equity in Undistributed Earnings of Subsidiaries |   |               | (379   | )      |               |   | 700 |   |
| Income Tax (Benefits)                                                           |   |               | (400   | )      |               |   | (577 | ) |
|                                                                            |   |               |   |   |               |   |   |   |
| Income Before Equity in Undistributed Earnings of Subsidiaries                  |   |               | 21     |   |               |   | 1,277 |   |
| Equity in Undistributed Earnings of Subsidiaries                                |   |               | (5,340 | )      |               |   | 1,228 |   |
|                                                                            |   |               |   |   |               |   |   |   |
| Net Income (Loss)                                                               |   |               | (5,319 | )      |               |   | 2,505 |   |
|                                                                            |   |               |   |   |               |   |   |   |
| Preferred Stock Dividends                                                       |   |               | 665    |   |               |   | -- |   |
|                                                                            |   |               |   |   |               |   |   |   |
| Net Income (Loss) Available to Common Shareholders                              |   |               | (5,984 | )      |               |   | 2,505 |   |
|                                                                            |   |               |   |   |               |   |   |   |
|                                                                            |   |               |   |   |               |   |   |   |
|                                                                            |   |               |   |   |               |   |   |   |
| Net Income (Loss)                                                               |   |               | (5,319 | )      |               |   | 2,505 |   |
|                                                                            |   |               |   |   |               |   |   |   |
| Other Comprehensive Income, Net of Tax                                          |   |               |   |   |               |   |   |   |
| Gains (Losses) on Securities Arising During Year                                |   |               | 1,148  |   |               |   | (311 | ) |
| Reclassification Adjustment                                                     |   |               | (1,675 | )      |               |   | (781 | ) |
|                                                                            |   |               |   |   |               |   |   |   |
| Unrealized Losses in Securities                                                 |   |               | (527   | )      |               |   | (1,092 | ) |
|                                                                            |   |               |   |   |               |   |   |   |
| Comprehensive Income                                                            |   | $                  | (5,846 | )      |               | $      | 1,413 |   |

----

Table of Contents

|                                              |   | 2009   |    |   | 2008   |   |
|---------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                              |   |   |    |   |   |   |
| Cash Flows from Operating Activities              |   |   |    |   |   |   |
| Net Income (Loss)                                 |   | $      | (5,319  | )      |   | $      | 2,505 |   |
| Adjustments to Reconcile Net Income to Net Cash   |   |   |    |   |   |   |   |   |
| Provided from Operating Activities                |   |   |    |   |   |   |   |   |
| Depreciation and Amortization                     |   |   | 144     |   |   |   | 152 |   |
| Equity in Undistributed Earnings of Subsidiary    |   |   | 5,340   |   |   |   | (1,228 | ) |
| Other                                             |   |   | (591    | )      |   |   | 784 |   |
|                                              |   |   | (426    | )      |   |   | 2,213 |   |
| Cash Flows from Investing Activities              |   |   |    |   |   |   |   |   |
| Capital Infusion in Subsidiary                    |   |   | (25,500 | )      |   |   | (1,500 | ) |
| Purchases of Premises and Equipment               |   |   | (95     | )      |   |   | (29 | ) |
|                                              |   |   | (25,595 | )      |   |   | (1,529 | ) |
| Cash Flows from Financing Activities              |   |   |    |   |   |   |   |   |
| Dividends Paid Preferred Stock                    |   |   | (490    | )      |   |   | --- |   |
| Dividends Paid Common Stock                       |   |   | (1,408  | )      |   |   | (1,388 | ) |
| Proceeds Allocated to Issuance of Preferred Stock |   |   | 27,215  |   |   |   | --- |   |
| Proceeds Allocated to Warrants Issued             |   |   | 785     |   |   |   | --- |   |
|                                              |   |   | 26,102  |   |   |   | (1,388 | ) |
|                                              |   |   |    |   |   |   |   |   |
| Net Increase (Decrease) in Cash                   |   |   | 81      |   |   |   | (704 | ) |
|                                              |   |   |    |   |   |   |   |   |
| Cash, Beginning                                   |   |   | 2       |   |   |   | 973 |   |
|                                              |   |   |    |   |   |   |   |   |
| Cash, Ending                                      |   | $      | 83      |   |   | $      | 269 |   |

----

Table of Contents

|                                           |   | Three Months Ended      |   |   | Three Months Ended |   |
|------------------------------------------------|--------|-------------------------|--------|--------|--------------------|--------|
|                                           |   | June 30, 2009           |   |   | June 30, 2008      |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Common Income Numerator |   |   | Shares Denominator |   |   | EPS |   |   | Income Numerator |   |   | Common Shares Denominator |   |   | EPS |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic EPS                                      |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) Available to Common Stockholders |   | $                       | (6,747 | )      |               |   | 7,210 |   |   | $ | (0.94 | ) |   | $ | 292 |   |   |   | 7,198 |   |   | $ | 0.04 |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive Effect of Potential Common Stock      |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted Stock                               |   |                    |   |   |               |   | 0 |   |   |   |   |   |   |   |   |   |   |   |  0 |   |   |   |   |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted EPS                                    |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) Available to Common Stockholders |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| After Assumed Conversions of                   |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive Securities                            |   | $                       | (6,747 | )      |               |   | 7,210 |   |   | $ | (0.94 | ) |   | $ | 292 |   |   |   | 7,198 |   |   | $ | 0.04 |   |

|                                           |   | Six Months Ended        |   |   | Six Months Ended   |   |
|------------------------------------------------|--------|-------------------------|--------|--------|--------------------|--------|
|                                           |   | June 30, 2009           |   |   | June 30, 2008      |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   | Common Income Numerator |   |   | Shares Denominator |   |   | EPS |   |   | Income Numerator |   |   | Common Shares Denominator |   |   | EPS |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Basic EPS                                      |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) Available to Common Stockholders |   | $                       | (5,984 | )      |               |   | 7,206 |   |   | $ | (0.83 | ) |   | $ | 2,505 |   |   |   | 7,195 |   |   | $ | 0.35 |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive Effect of Potential Common Stock      |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Restricted Stock                               |   |                    |   |   |               |   | 0 |   |   |   |   |   |   |   |   |   |   |   |  0 |   |   |   |   |   |
|                                           |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Diluted EPS                                    |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income (Loss) Available to Common Stockholders |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| After Assumed Conversions of                   |   |                    |   |   |               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dilutive Securities                            |   | $                       | (5,984 | )      |               |   | 7,206 |   |   | $ | (0.83 | ) |   | $ | 2,505 |   |   |   | 7,195 |   |   | $ | 0.35 |   |

----

Table of Contents

Ite

|   | · | Local and regional economic conditions and the impact they may have on the Company and its customers and the Company’s assessment of that impact. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The effects of and changes in trade, monetary and fiscal policies and laws, including interest rate policies of the Federal Reserve Board. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Inflation, interest rate, market and monetary fluctuations. |
|--------|--------|-------------------------------------------------------------|

|   | · | Political instability. |
|--------|--------|------------------------|

|   | · | Acts of war or terrorism. |
|--------|--------|---------------------------|

|   | · | The timely development and acceptance of new products and services and perceived overall value of these products and services by users. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Changes in consumer spending, borrowings and savings habits. |
|--------|--------|--------------------------------------------------------------|

|   | · | Technological changes. |
|--------|--------|------------------------|

|   | · | Acquisitions and integration of acquired businesses. |
|--------|--------|------------------------------------------------------|

|   | · | The ability to increase market share and control expenses. |
|--------|--------|------------------------------------------------------------|

|   | · | The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | Changes in the Company’s organization, compensation and benefit plans. |
|--------|--------|------------------------------------------------------------------------------|

|   | · | The costs and effects of litigation and of unexpected or adverse outcomes in such litigation. |
|--------|--------|-----------------------------------------------------------------------------------------------|

----

Table of Contents

|   | · | Greater than expected costs or difficulties related to the integration of new lines of business. |
|--------|--------|--------------------------------------------------------------------------------------------------|

|   | · | The Company’s success at managing the risks involved in the foregoing items. |
|--------|--------|------------------------------------------------------------------------------------|

----

Table of Contents

|                                                |   | Three Months Ended |   |   | Six Months Ended |   |
|-----------------------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                                |   | June 30            |   |   | June 30          |   |
|                                                |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |
| Taxable-equivalent net interest income              |   | $                  | 10,006 |   |             | $      | 9,119 |   |   | $ | 19,146 |   |   | $ | 18,818 |   |
| Taxable-equivalent adjustment                       |   |               | 67     |   |             |   | 76 |   |   |   | 147 |   |   |   | 170 |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                 |   |               | 9,939  |   |             |   | 9,043 |   |   |   | 18,999 |   |   |   | 18,648 |   |
| Provision for possible loan losses                  |   |               | 13,355 |   |             |   | 4,071 |   |   |   | 17,580 |   |   |   | 5,142 |   |
| Noninterest income                                  |   |               | 2,004  |   |             |   | 3,034 |   |   |   | 5,966 |   |   |   | 5,405 |   |
| Noninterest expense                                 |   |               | 8,303  |   |             |   | 7,714 |   |   |   | 15,664 |   |   |   | 15,471 |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Income (loss) before income taxes                   |   |               | (9,715 | )      |             |   | 292 |   |   |   | (8,279 | ) |   |   | 3,440 |   |
| Income taxes                                        |   |               | (3,318 | )      |             |   | --- |   |   |   | (2,960 | ) |   |   | 935 |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss)                                   |   | $                  | (6,397 | )      |             | $      | 292 |   |   | $ | (5,319 | ) |   | $ | 2,505 |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Preferred stock dividends                           |   |               | 350    |   |             |   | --- |   |   |   | 665 |   |   |   | --- |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common shareholders  |   | $                  | (6,747 | )      |             | $      | 292 |   |   | $ | (5,984 | ) |   | $ | 2,505 |   |
|                                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Net income (loss) available to common shareholders: |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Basic                                               |   | $                  | (0.94  | )      |             | $      | 0.04 |   |   | $ | (0.83 | ) |   | $ | 0.35 |   |
| Diluted                                             |   | $                  | (0.94  | )      |             | $      | 0.04 |   |   | $ | (0.83 | ) |   | $ | 0.35 |   |
| Return on average assets                            |   |               | (2.10  | )%     |             |   | 0.10 | % |   |   | (0.94 | )% |   |   | 0.42 | % |
| Return on average common equity                     |   |               | (32.81 | )%     |             |   | 1.36 | % |   |   | (14.45 | )% |   |   | 5.86 | % |

----

Table of Contents

----

Table of Contents

|                                              |   | Changes from June 30, 2008 to June 30, 2009 (1) |   |
|---------------------------------------------------|--------|-----------------------------------------------------------|--------|
| ($ in thousands)                                  |   | Volume                                                    |   |   | Rate |   |   | Total |   |
|                                              |   |                                                      |   |   |   |   |   |   |   |
| Interest Income                                   |   |                                                      |   |   |   |   |   |   |   |
| Loans, Net-taxable                                |   | $                                                         | 504    |   |   | $ | (6,810 | ) |   | $ | (6,306 | ) |
|                                              |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Investment Securities                             |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Taxable                                           |   |                                                      | 1,963  |   |   |   | (1,256 | ) |   |   | 707 |   |
| Tax-exempt                                        |   |                                                      | (108   | ) |   |   | 5 |   |   |   | (103 | ) |
| Total Investment Securities                       |   |                                                      | 1,855  |   |   |   | (1,251 | ) |   |   | 604 |   |
|                                              |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Deposits in other Banks          |   |                                                      | (15    | ) |   |   | (5 | ) |   |   | (20 | ) |
|                                              |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Federal Funds Sold                                |   |                                                      | (127   | ) |   |   | (101 | ) |   |   | (228 | ) |
|                                              |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Other Interest - Earning Assets                   |   |                                                      | 15     |   |   |   | (181 | ) |   |   | (166 | ) |
| Total Interest Income                             |   |                                                      | 2,232  |   |   |   | (8,348 | ) |   |   | (6,116 | ) |
|                                              |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Interest Expense                                  |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Demand and Savings Deposits      |   |                                                      | 142    |   |   |   | (1,034 | ) |   |   | (892 | ) |
| Time Deposits                                     |   |                                                      | 127    |   |   |   | (5,656 | ) |   |   | (5,529 | ) |
| Federal Funds Purchased and Repurchase Agreements |   |                                                      | 614    |   |   |   | (230 | ) |   |   | 384 |   |
| Subordinated Debentures                           |   |                                                      | ---    |   |   |   | (280 | ) |   |   | (280 | ) |
| Other Borrowed Money                              |   |                                                      | 252    |   |   |   | (379 | ) |   |   | (127 | ) |
|                                              |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Total Interest Expense                            |   |                                                      | 1,135  |   |   |   | (7,579 | ) |   |   | (6,444 | ) |
| Net Interest Income                               |   | $                                                         | 1,097  |   |   | $ | ( 769 | ) |   | $ | 328 |   |

| (1) | Changes in net interest income for the periods, based on either changes in average balances or changes in average rates for interest-earning assets and interest-bearing liabilities, are shown on this table. During each year, there are numerous and simultaneous balance and rate changes; therefore, it is not possible to precisely allocate the changes between balances and rates. For the purpose of this table, changesthat are not exclusively due to balance changes or rate changes have been attributed to rates. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

----

Table of Contents

|                                |   | Three Months Ended |   |   | Six Months Ended |   |
|-------------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                                |   | June 30            |   |   | June 30          |   |
|                                |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                                |   |               |   |   |             |   |   |   |   |   |   |   |
| Service Charges on Deposit Accounts |   | $                  | 1,042  |   |             | $      | 1,173 |   |   | $ | 2,030 |   |   | $ | 2,338 |   |
| Other Charges, Commissions and Fees |   |               | 252    |   |             |   | 241 |   |   |   | 488 |   |   |   | 495 |   |
| Other                               |   |               | 360    |   |             |   | 832 |   |   |   | 679 |   |   |   | 1,045 |   |
| Mortgage Fee Income                 |   |               | 129    |   |             |   | 174 |   |   |   | 231 |   |   |   | 343 |   |
| Securities Gains                    |   |               | 221    |   |             |   | 614 |   |   |   | 2,538 |   |   |   | 1,184 |   |
|                                |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total                               |   | $                  | 2,004  |   |             | $      | 3,034 |   |   | $ | 5,966 |   |   | $ | 5,405 |   |

|                           |   | Three Months Ended |   |   | Six Months Ended |   |
|--------------------------------|--------|--------------------|--------|--------|------------------|--------|
|                           |   | June 30            |   |   | June 30          |   |
|                           |   | 2009               |   |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                           |   |               |   |   |             |   |   |   |   |   |   |   |
| Salaries and Employee Benefits |   | $                  | 3,583  |   |             | $      | 4,029 |   |   | $ | 7,390 |   |   | $ | 8,432 |   |
| Occupancy and Equipment        |   |               | 1,041  |   |             |   | 1,061 |   |   |   | 2,050 |   |   |   | 2,068 |   |
| Other                          |   |               | 3,679  |   |             |   | 2,624 |   |   |   | 6,224 |   |   |   | 4,971 |   |
|                           |   |               |   |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Total                          |   | $                  | 8,303  |   |             | $      | 7,714 |   |   | $ | 15,664 |   |   | $ | 15,471 |   |

----

Table of Contents

|                                        |   | Six Months Ended |      |
|---------------------------------------------|--------|------------------|-----------|
|                                        |   | June 30,         |      |
| Sources of Funds:                           |   | 2009             |      |   | 2008 |   |
| Deposits:                                   |   |             |      |   |   |   |   |   |   |   |   |   |
| Noninterest-Bearing                         |   | $                | 68,988    |   |   |   | 5.41 | % |   | $ | 77,602 |   |   |   | 6.53 | % |
| Interest-Bearing                            |   |             | 934,731   |   |   |   | 73.28 |   |   |   | 912,188 |   |   |   | 76.78 |   |
| Federal Funds Purchased and Repo Agreements |   |             | 41,352    |   |   |   | 3.24 |   |   |   | 3,233 |   |   |   | 0.27 |   |
| Long-term Debt and Other Borrowings         |   |             | 115,229   |   |   |   | 9.03 |   |   |   | 103,345 |   |   |   | 8.70 |   |
| Other Noninterest-Bearing Liabilities       |   |             | 6,250     |   |   |   | 0.49 |   |   |   | 6,150 |   |   |   | 0.52 |   |
| Equity Capital                              |   |             | 109,002   |   |   |   | 8.55 |   |   |   | 85,483 |   |   |   | 7.20 |   |
| Total                                       |   | $                | 1,275,552 |   |   |   | 100.00 | % |   | $ | 1,188,001 |   |   |   | 100.00 | % |
|                                        |   |             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                        |   |             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Uses of Funds:                              |   |             |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                                       |   | $                | 943,903   |   |   |   | 74.00 | % |   | $ | 932,828 |   |   |   | 78.52 | % |
| Securities                                  |   |             | 230,832   |   |   |   | 18.10 |   |   |   | 153,847 |   |   |   | 12.95 |   |
| Federal Funds Sold                          |   |             | 7,736     |   |   |   | 0.61 |   |   |   | 16,492 |   |   |   | 1.39 |   |
| Interest-Bearing Deposits in Other Banks    |   |             | 395       |   |   |   | 0.03 |   |   |   | 1,604 |   |   |   | 0.13 |   |
| Other Interest-Earning Assets               |   |             | 6,309     |   |   |   | 0.49 |   |   |   | 5,784 |   |   |   | 0.49 |   |
| Other Noninterest-Earning Assets            |   |             | 86,377    |   |   |   | 6.77 |   |   |   | 77,446 |   |   |   | 6.52 |   |
| Total                                       |   | $                | 1,275,552 |   |   |   | 100.00 | % |   | $ | 1,188,001 |   |   |   | 100.00 | % |

----

Table of Contents

|                                   |   | June 30, 2009 |    |   | December 31, 2008 |   |
|----------------------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                                   |   |               |    |   |                   |   |
| Commercial, Financial and Agricultural |   | $                  | 88,666  |   |                   | $      | 86,379 |   |
| Real Estate                            |   |               |    |   |                   |   |   |   |
| Construction                           |   |               | 136,785 |   |                   |   | 160,374 |   |
| Mortgage, Farmland                     |   |               | 56,146  |   |                   |   | 54,159 |   |
| Mortgage, Other                        |   |               | 625,649 |   |                   |   | 600,654 |   |
| Consumer                               |   |               | 40,724  |   |                   |   | 44,163 |   |
| Other                                  |   |               | 15,859  |   |                   |   | 15,308 |   |
|                                   |   |               | 963,829 |   |                   |   | 961,037 |   |
| Unearned Interest and Fees             |   |               | (145    | )      |                   |   | (179 | ) |
| Allowance for Loan Losses              |   |               | (18,375 | )      |                   |   | (17,016 | ) |
|                                   |   |               |    |   |                   |   |   |   |
| Loans                                  |   | $                  | 945,309 |   |                   | $      | 943,842 |   |

| Maturity and Repricing Opportunity   |   | ($ in Thousands) |    |
|--------------------------------------|--------|------------------|---------|
|                                 |   |             |    |
| One Year or Less                     |   | $                | 593,203 |   |
| After One Year through Three Years   |   |             | 304,374 |   |
| After Three Years through Five Years |   |             | 55,853  |   |
| Over Five Years                      |   |             | 10,399  |   |
|                                 |   | $                | 963,829 |   |

----

Table of Contents

|                        |   | June 30, 2009      |   |   | December 31, 2008 |   |
|-----------------------------|--------|-------------------------|--------|--------|------------------------|--------|
|                        |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   |                    |   |   | Period End Balances    |   |   |   |   |   | Period End Balances |   |
|                        |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                        |   | Number of Relationships |   |   | Committed              |   |   | Outstanding |   |   | Number of Relationships |   |   | Committed |   |   | Outstanding |   |
|                        |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Large Credit Relationships: |   |                    |   |   |                   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $10 million and greater     |   |                    | 2      |   |                   | $      | 26,906 |   |   | $ | 24,081 |   |   |   | 2 |   |   | $ | 27,605 |   |   | $ | 21,345 |   |
| $5 million to $9.9 million  |   |                    | 7      |   |                   | $      | 47,001 |   |   | $ | 45,935 |   |   |   | 12 |   |   | $ | 74,679 |   |   | $ | 71,215 |   |

----

Table of Contents

|                               |   | Due in One Year or Less |    |   | After One, but Within Three Years |   |    | After Three, but Within Five Years |   |   | After Five Years |   |   | Total  |   |
|------------------------------------|--------|-------------------------|---------|--------|-----------------------------------|--------|---------|------------------------------------|--------|--------|------------------|--------|--------|--------|--------|
|                               |   |                    |    |   |                              |   |    |                               |   |   |             |   |   |   |   |
| Loans with fixed interest rates    |   | $                       | 269,858 |   |                              | $      | 298,088 |                               |   | $      | 55,790           |   |   | $      | 10,068 |   |   | $ | 633,804 |   |
| Loans with floating interest rates |   |                    | 323,345 |   |                              |   | 6,286   |                               |   |   | 63               |   |   |   | 331    |   |   |   | 330,025 |   |
|                               |   |                    |    |   |                              |   |    |                               |   |   |             |   |   |   |   |   |   |   |   |   |
| Total                              |   | $                       | 593,203 |   |                              | $      | 304,374 |                               |   | $      | 55,853           |   |   | $      | 10,399 |   |   | $ | 963,829 |   |

|                                      |   | June 30, 2009 |   |   | December 31, 2008 |   |
|-------------------------------------------|--------|--------------------|--------|--------|------------------------|--------|
|                                      |   |               |   |   |                   |   |
| Loans accounted for on nonaccrual         |   | $                  | 33,224 |   |                   | $      | 35,124 |   |
| Loans past due 90 days or more            |   |               | ---    |   |                   |   | 250 |   |
| Other real estate foreclosed              |   |               | 13,040 |   |                   |   | 12,812 |   |
| Total non-performing assets               |   | $                  | 46,264 |   |                   | $      | 48,186 |   |
|                                      |   |               |   |   |                   |   |   |   |
| Non-performing assets as a percentage of: |   |               |   |   |                   |   |   |   |
| Total loans and foreclosed assets         |   |               | 4.74   | %      |                   |   | 4.95 | % |
| Total assets                              |   |               | 3.57   | %      |                   |   | 3.85 | % |
| Accruing past due loans:                  |   |               |   |   |                   |   |   |   |
| 30-89 days past due                       |   | $                  | 15,160 |   |                   | $      | 18,675 |   |
| 90 or more days past due                  |   |               | ---    |   |                   |   | 250 |   |
| Total accruing past due loans             |   | $                  | 15,160 |   |                   | $      | 18,925 |   |

----

Table of Contents

|                                   |   | June 30, 2009 |   |   | December 31, 2008 |   |
|----------------------------------------|--------|--------------------|--------|--------|------------------------|--------|
|                                   |   |               |   |   |                   |   |   |   |   |   |   |   |
|                                   |   | Reserve            |   |   |                   | %      | * |   | Reserve |   |   |   | % | * |
| Commercial, Financial and Agricultural |   | $                  | 3,216  |   |                   |   | 9 | % |   | $ | 4,254 |   |   |   | 9 | % |
| Real Estate – Construction       |   |               | 5,512  |   |                   |   | 14 | % |   |   | 2,808 |   |   |   | 17 | % |
| Real Estate – Farmland           |   |               | 551    |   |                   |   | 6 | % |   |   | 681 |   |   |   | 6 | % |
| Real Estate – Other              |   |               | 6,707  |   |                   |   | 65 | % |   |   | 5,955 |   |   |   | 62 | % |
| Loans to Individuals                   |   |               | 1,654  |   |                   |   | 4 | % |   |   | 2,467 |   |   |   | 4 | % |
| All Other Loans                        |   |               | 735    |   |                   |   | 2 | % |   |   | 851 |   |   |   | 2 | % |
| Total                                  |   | $                  | 18,375 |   |                   |   | 100 | % |   | $ | 17,016 |   |   |   | 100 | % |

----

Table of Contents

|                                              |   | Three Months Ended |   |   | Three Months Ended |   |
|---------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
| ($ in thousands)                                  |   | June 30, 2009 |   |   | June 30, 2008 |   |
|                                              |   |               |   |   |               |   |
| Allowance for Loan Losses at Beginning of Quarter |   | $                  | 18,996 |   |               | $      | 15,220 |   |
|                                              |   |               |   |   |               |   |   |   |
| Charge-Off                                        |   |               |   |   |               |   |   |   |
| Commercial, Financial and Agricultural            |   |               | 201    |   |               |   | 411 |   |
| Real Estate                                       |   |               | 13,726 |   |               |   | 1,479 |   |
| Consumer                                          |   |               | 118    |   |               |   | 88 |   |
| All Other                                         |   |               | 31     |   |               |   | 49 |   |
|                                              |   |               | 14,076 |   |               |   | 2,027 |   |
| Recoveries                                        |   |               |   |   |               |   |   |   |
| Commercial, Financial and Agricultural            |   |               | 7      |   |               |   | 44 |   |
| Real Estate                                       |   |               | 44     |   |               |   | 112 |   |
| Consumer                                          |   |               | 46     |   |               |   | 39 |   |
| All Other                                         |   |               | 3      |   |               |   | 7 |   |
|                                              |   |               | 100    |   |               |   | 202 |   |
|                                              |   |               |   |   |               |   |   |   |
| Net Charge-Offs                                   |   |               | 13,976 |   |               |   | 1,825 |   |
|                                              |   |               |   |   |               |   |   |   |
| Provision for Loan Losses                         |   |               | 13,355 |   |               |   | 4,071 |   |
|                                              |   |               |   |   |               |   |   |   |
| Allowance for Loan Losses at End of Quarter       |   | $                  | 18,375 |   |               | $      | 17,466 |   |
|                                              |   |               |   |   |               |   |   |   |
| Ratio of Net Charge-Offs to Average Loans         |   |               | 1.45   | %      |               |   | 0.19 | % |

----

Table of Contents

----

Table of Contents

|                                              |   | Six Months Ended   |   |   | Six Months Ended   |   |
|---------------------------------------------------|--------|--------------------|--------|--------|--------------------|--------|
| ($ in thousands)                                  |   | June 30, 2009 |   |   | June 30, 2008 |   |
|                                              |   |               |   |   |               |   |
| Allowance for Loan Losses at Beginning of Quarter |   | $                  | 17,016 |   |               | $      | 15,513 |   |
|                                              |   |               |   |   |               |   |   |   |
| Charge-Off                                        |   |               |   |   |               |   |   |   |
| Commercial, Financial and Agricultural            |   |               | 286    |   |               |   | 662 |   |
| Real Estate                                       |   |               | 15,644 |   |               |   | 2,514 |   |
| Consumer                                          |   |               | 273    |   |               |   | 230 |   |
| All Other                                         |   |               | 218    |   |               |   | 52 |   |
|                                              |   |               | 16,421 |   |               |   | 3,458 |   |
| Recoveries                                        |   |               |   |   |               |   |   |   |
| Commercial, Financial and Agricultural            |   |               | 15     |   |               |   | 59 |   |
| Real Estate                                       |   |               | 76     |   |               |   | 123 |   |
| Consumer                                          |   |               | 106    |   |               |   | 68 |   |
| All Other                                         |   |               | 3      |   |               |   | 19 |   |
|                                              |   |               | 200    |   |               |   | 269 |   |
|                                              |   |               |   |   |               |   |   |   |
| Net Charge-Offs                                   |   |               | 16,221 |   |               |   | 3,189 |   |
|                                              |   |               |   |   |               |   |   |   |
| Provision for Loan Losses                         |   |               | 17,580 |   |               |   | 5,142 |   |
|                                              |   |               |   |   |               |   |   |   |
| Allowance for Loan Losses at End of Quarter       |   | $                  | 18,375 |   |               | $      | 17,466 |   |
|                                              |   |               |   |   |               |   |   |   |
| Ratio of Net Charge-Offs to Average Loans         |   |               | 1.69   | %      |               |   | 0.34 | % |

----

Table of Contents

| ($ in thousands)                |   | June 30, 2009 |    |   | December 31, 2008 |   |
|---------------------------------|--------|--------------------|---------|--------|------------------------|--------|
|                            |   |               |    |   |                   |   |
| State, County and Municipal     |   | $                  | 5,947   |   |                   | $      | 9,110 |   |
| Corporate Obligations           |   |               | 3,956   |   |                   |   | 6,176 |   |
| Asset-Backed Securities         |   |               | 405     |   |                   |   | 668 |   |
|                            |   |               |    |   |                   |   |   |   |
| Investment Securities           |   |               | 10,308  |   |                   |   | 15,954 |   |
| Mortgage-Backed Securities      |   |               | 239,600 |   |                   |   | 191,750 |   |
| Total Investment Securities and |   |               |    |   |                   |   |   |   |
| Mortgage Backed Securities      |   | $                  | 249,908 |   |                   | $      | 207,704 |   |

|                         |   | Within 1 Year |   |   | After 1 Year But Within 5 Years |   |   | After 5 Years But Within 10 Years |   |   | After 10 Years |   |
|------------------------------|--------|---------------|--------|--------|---------------------------------|--------|--------|-----------------------------------|--------|--------|----------------|--------|
|                         |   | Amount        |   |   | Yield                           |   |   | Amount                            |   |   | Yield          |   |   | Amount |   |   | Yield |   |   | Amount |   |   | Yield |   |
|                         |   |          |   |   |                            |   |   |                              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Mortgage-Backed Securities   |   | $             | 9,882  |   |                            |   | 2.58   | %                                 |   | $      | 191,913        |   |   |   | 3.42 | % |   | $ | 9,439 |   |   |   | 3.01 | % |   | $ | 28,366 |   |   |   | 4.03 | % |
|                         |   |          |   |   |                            |   |   |                              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| State, County, and Municipal |   |          | 2,805  |   |                            |   | 4.12   |                              |   |   | 575            |   |   |   | 4.28 |   |   |   | 2,567 |   |   |   | 3.74 |   |   |   | --- |   |   |   | --- |   |
|                         |   |          |   |   |                            |   |   |                              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Corporate Obligations        |   |          | ---    |   |                            |   | ---    |                              |   |   | 2,125          |   |   |   | 4.85 |   |   |   | 1,069 |   |   |   | 5.67 |   |   |   | 762 |   |   |   | 4.73 |   |
|                         |   |          |   |   |                            |   |   |                              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Asset-Backed Securities      |   |          | ---    |   |                            |   | ---    |                              |   |   | ---            |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | 405 |   |   |   | 6.33 |   |
|                         |   |          |   |   |                            |   |   |                              |   |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Investment Portfolio   |   | $             | 12,687 |   |                            |   | 2.95   | %                                 |   | $      | 194,613        |   |   |   | 3.45 | % |   | $ | 13,075 |   |   |   | 3.35 | % |   | $ | 29,533 |   |   |   | 4.13 | % |

----

Table of Contents

|                                         |   | June 30, 2009 |      |   | June 30, 2008 |   |
|----------------------------------------------|--------|--------------------|-----------|--------|--------------------|--------|
| ($ in thousands)                             |   | Average Amount     |      |   | Average Rate       |   |   | Average Amount |   |   | Average Rate |   |
|                                         |   |               |      |   |               |   |   |   |   |   |   |   |
| Noninterest-Bearing Demand Deposits          |   | $                  | 68,988    |   |               |   |   |   | $ | 77,602 |   |   |   |   |
| Interest-Bearing Demand and Savings Deposits |   |               | 239,340   |   |               |   | 0.78 | % |   |   | 222,169 |   |   |   | 1.65 | % |
| Time Deposits                                |   |               | 695,391   |   |               |   | 3.10 | % |   |   | 690,019 |   |   |   | 4.73 | % |
|                                         |   |               |      |   |               |   |   |   |   |   |   |   |   |   |   |   |
| Total Deposits                               |   | $                  | 1,003,719 |   |               |   | 2.34 | % |   | $ | 989,790 |   |   |   | 3.67 | % |

| ($ in thousands)                 |   | Time Deposits $100,000 or Greater |    |   | Time Deposits Less Than $100,000 |   |    | Total  |   |
|----------------------------------|--------|-----------------------------------|---------|--------|----------------------------------|--------|---------|--------|--------|
|                             |   |                              |    |   |                             |   |    |   |   |
| Months to Maturity               |   |                              |    |   |                             |   |    |   |   |
| 3 or Less                        |   | $                                 | 106,260 |   |                             | $      | 71,187  |   |   | $ | 177,447 |   |
| Over 3 through 12 Months         |   |                              | 202,189 |   |                             |   | 232,257 |   |   |   | 434,446 |   |
| Over 12 Months through 36 Months |   |                              | 43,605  |   |                             |   | 45,406  |   |   |   | 89,011 |   |
| Over 36 Months                   |   |                              | 1,234   |   |                             |   | 3,461   |   |   |   | 4,695 |   |
|                             |   |                              |    |   |                             |   |    |   |   |   |   |   |
|                             |   | $                                 | 353,288 |   |                             | $      | 352,311 |   |   | $ | 705,599 |   |

----

Table of Contents

|                                                |   | Payments Due by Period |    |
|-----------------------------------------------------|--------|------------------------|---------|
|                                                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   | 1 Year or Less         |    |   | More than 1 Year but Less Than 3 Years |   |   | 3 Years or More but Less Than 5 Years |   |   | 5 Years or More |   |   | Total |   |
| Contractual obligations:                            |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Subordinated debentures                             |   | $                      | ----    |   |   | $ | ---- |   |   | $ | ---- |   |   | $ | 24,229 |   |   | $ | 24,229 |   |
| Federal Funds purchased and repurchase agreements   |   |                   | 32,697  |   |   |   | 20,000 |   |   |   | ---- |   |   |   | ---- |   |   |   | 52,697 |   |
| Federal Home Loan Bank advances                     |   |                   | 20,000  |   |   |   | 36,000 |   |   |   | 5,000 |   |   |   | 30,000 |   |   |   | 91,000 |   |
| Operating leases                                    |   |                   | 129     |   |   |   | 252 |   |   |   | 149 |   |   |   | ---- |   |   |   | 530 |   |
| Deposits with stated maturity dates                 |   |                   | 611,893 |   |   |   | 89,011 |   |   |   | 4,548 |   |   |   | 147 |   |   |   | 705,599 |   |
|                                                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                   | 664,719 |   |   |   | 145,263 |   |   |   | 9,697 |   |   |   | 54,376 |   |   |   | 874,055 |   |
| Other commitments:                                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loan commitments                                    |   |                   | 72,485  |   |   |   | ---- |   |   |   | ---- |   |   |   | ---- |   |   |   | 72,485 |   |
| Standby letters of credit                           |   |                   | 1,873   |   |   |   | ---- |   |   |   | ---- |   |   |   | ---- |   |   |   | 1,873 |   |
| Standby letter of credit issued by                  |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Federal Home Loan Bank for Bank                     |   |                   | 60      |   |   |   | ---- |   |   |   | ---- |   |   |   | ---- |   |   |   | 60 |   |
|                                                |   |                   |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                |   |                   | 74,418  |   |   |   | ---- |   |   |   | ---- |   |   |   | ---- |   |   |   | 74,418 |   |
| Total contractual obligations and Other commitments |   | $                      | 739,137 |   |   | $ | 145,263 |   |   | $ | 9,697 |   |   | $ | 54,376 |   |   | $ | 948,473 |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

|                       |   | Three Months Ended |      |   | Six Months Ended |   |
|----------------------------|--------|--------------------|-----------|--------|------------------|--------|
|                       |   | June 30            |      |   | June 30          |   |
|                       |   | 2009               |      |   | 2008             |   |   | 2009 |   |   | 2008 |   |
|                       |   |               |      |   |             |   |   |   |   |   |   |   |
| Return on Assets (1)       |   |               | (2.10     | )%     |             |   | 0.10 | % |   |   | (0.94 | )% |   |   | 0.42 | % |
|                       |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Return on Equity (1)       |   |               | (32.81    | )%     |             |   | 1.36 | % |   |   | (14.45 | )% |   |   | 5.86 | % |
|                       |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Dividend Payout            |   | NM                 |  (2) |   |             | 243.75 | % |   | NM |  (2) |   |   | 55.71 | % |
|                       |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Avg. Equity to Avg. Assets |   |               | 6.41      | %      |             |   | 7.23 | % |   |   | 6.49 | % |   |   | 7.20 | % |
|                       |   |               |      |   |             |   |   |   |   |   |   |   |   |   |   |   |
| Dividends Declared         |   | $                  | 0.049     |   |             | $      | 0.098 |   |   | $ | 0.146 |   |   | $ | 0.195 |   |

----

Table of Contents

----

Table of Contents

----

Table of Contents

Item

| AVERAGE BALANCE SHEETS                                         |   | Six Months Ended |      |   | Six Months Ended |   |
|----------------------------------------------------------------|--------|------------------|-----------|--------|------------------|--------|
|                                                           |   | June 30, 2009    |      |   | June 30, 2008    |   |
|                                                           |   | Average          |      |   | Income/          |   |   | Yields/ |   |   | Average |   |   | Income/ |   |   | Yields/ |   |
| ($ in thousands)                                               |   | Balances         |      |   | Expense          |   |   | Rates |   |   | Balances |   |   | Expense |   |   | Rates |   |
| Assets                                                         |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Earning Assets                                        |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, Net of Unearned Interest and fees                       |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable (1)                                                    |   | $                | 962,029   |   |             | $      | 28,847 |   |   |   | 6.00 | % |   | $ | 948,432 |   |   | $ | 35,153 |   |   |   | 7.41 | % |
| Investment Securities                                          |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Taxable                                                        |   |             | 223,455   |   |             |   | 4,173 |   |   |   | 3.73 | % |   |   | 142,657 |   |   |   | 3,466 |   |   |   | 4.86 | % |
| Tax-Exempt (2)                                                 |   |             | 7,377     |   |             |   | 215 |   |   |   | 5.83 | % |   |   | 11,190 |   |   |   | 318 |   |   |   | 5.68 | % |
| Total Investment Securities                                    |   |             | 230,832   |   |             |   | 4,388 |   |   |   | 3.80 | % |   |   | 153,847 |   |   |   | 3,784 |   |   |   | 4.92 | % |
| Interest-Bearing Deposits                                      |   |             | 395       |   |             |   | -- |   |   |   | -- |   |   |   | 1,604 |   |   |   | 20 |   |   |   | 2.49 | % |
| Federal Funds Sold                                             |   |             | 7,736     |   |             |   | 11 |   |   |   | 0.28 | % |   |   | 16,492 |   |   |   | 239 |   |   |   | 2.90 | % |
| Interest-Bearing Other Assets                                  |   |             | 6,309     |   |             |   | -- |   |   |   | -- |   |   |   | 5,784 |   |   |   | 166 |   |   |   | 5.74 | % |
| Total Interest-Earning Assets                                  |   |             | 1,207,301 |   |             | $      | 33,246 |   |   |   | 5.51 | % |   |   | 1,126,159 |   |   | $ | 39,362 |   |   |   | 6.99 | % |
| Non-interest-Earning Assets                                    |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cash and Cash Equivalents                                      |   |             | 23,916    |   |             |   |   |   |   |   |   |   |   |   | 21,512 |   |   |   |   |   |   |   |   |   |
| Allowance for Loan Losses                                      |   |             | (18,126   | )      |             |   |   |   |   |   |   |   |   |   | (15,604 | ) |   |   |   |   |   |   |   |   |
| Other Assets                                                   |   |             | 62,461    |   |             |   |   |   |   |   |   |   |   |   | 55,934 |   |   |   |   |   |   |   |   |   |
| Total Noninterest-Earning Assets                               |   |             | 68,251    |   |             |   |   |   |   |   |   |   |   |   | 61,842 |   |   |   |   |   |   |   |   |   |
| Total Assets                                                   |   | $                | 1,275,552 |   |             |   |   |   |   |   |   |   |   | $ | 1,188,001 |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                           |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Liabilities                                   |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Deposits                                      |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Demand and Savings                            |   | $                | 239,340   |   |             | $      | 936 |   |   |   | 0.78 | % |   | $ | 222,169 |   |   | $ | 1,828 |   |   |   | 1.65 | % |
| Other Time                                                     |   |             | 695,391   |   |             |   | 10,790 |   |   |   | 3.10 | % |   |   | 690,019 |   |   |   | 16,319 |   |   |   | 4.73 | % |
| Total Interest-Bearing Deposits                                |   |             | 934,731   |   |             |   | 11,726 |   |   |   | 2.51 | % |   |   | 912,188 |   |   |   | 18,147 |   |   |   | 3.98 | % |
| Other Interest-Bearing Liabilities                             |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other Borrowed Money                                           |   |             | 91,000    |   |             |   | 1,552 |   |   |   | 3.41 | % |   |   | 79,116 |   |   |   | 1,679 |   |   |   | 4.24 | % |
| Subordinated Debentures                                        |   |             | 24,229    |   |             |   | 386 |   |   |   | 3.19 | % |   |   | 24,229 |   |   |   | 666 |   |   |   | 5.50 | % |
| Federal Funds Purchased and Repurchase Agreements              |   |             | 41,352    |   |             |   | 436 |   |   |   | 2.11 | % |   |   | 3,233 |   |   |   | 52 |   |   |   | 3.22 | % |
| Total Other Interest-Bearing Liabilities                       |   |             | 156,581   |   |             |   | 2,374 |   |   |   | 3.03 | % |   |   | 106,578 |   |   |   | 2,397 |   |   |   | 4.50 | % |
| Total Interest-Bearing Liabilities                             |   |             | 1,091,312 |   |             | $      | 14,100 |   |   |   | 2.58 | % |   |   | 1,018,766 |   |   | $ | 20,544 |   |   |   | 4.03 | % |
| Noninterest-Bearing Liabilities and                            |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders' Equity                                           |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand Deposits                                                |   |             | 68,988    |   |             |   |   |   |   |   |   |   |   |   | 77,602 |   |   |   |   |   |   |   |   |   |
| Other Liabilities                                              |   |             | 6,250     |   |             |   |   |   |   |   |   |   |   |   | 6,150 |   |   |   |   |   |   |   |   |   |
| Stockholders' Equity                                           |   |             | 109,002   |   |             |   |   |   |   |   |   |   |   |   | 85,483 |   |   |   |   |   |   |   |   |   |
| Total Noninterest-Bearing Liabilities and Stockholders' Equity |   |             | 184,240   |   |             |   |   |   |   |   |   |   |   |   | 169,235 |   |   |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders' Equity                     |   | $                | 1,275,552 |   |             |   |   |   |   |   |   |   |   | $ | 1,188,001 |   |   |   |   |   |   |   |   |   |
|                                                           |   |             |      |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate Spread                                           |   |             |      |   |             |   |   |   |   |   | 2.93 | % |   |   |   |   |   |   |   |   |   |   | 2.96 | % |
| Net Interest Income                                            |   |             |      |   |             | $      | 19,146 |   |   |   |   |   |   |   |   |   |   | $ | 18,818 |   |   |   |   |   |
| Net Interest Margin                                            |   |             |      |   |             |   |   |   |   |   | 3.17 | % |   |   |   |   |   |   |   |   |   |   | 3.34 | % |

| (1) | The average balance of loans includes the average balance of nonaccrual loans.  Income on such loans is recognized and recorded on the cash basis.  Taxable equivalent adjustments totaling $144 and $62 for six month periods ended June 30, 2009 and 2008, respectively, are included in tax-exempt interest on loans. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Taxable-equivalent adjustments totaling $142 and $108 for six month periods ended June 30, 2009 and 2008, respectively, are included in tax-exempt interest on investment securities.  The adjustments are based on a federal tax rate of 34 percent with appropriate reductions for the effect of disallowed interest expense incurred in carrying tax-exempt obligations. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Table of Contents

|                                                                               |   | Assets and Liabilities Repricing Within |    |   |           |   |
|------------------------------------------------------------------------------------|--------|-----------------------------------------|---------|--------|----------------|--------|
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   | 3 Months or Less                        |    |   | 4 to 12 Months |   |   | 1 Year |   |   | 1 to 5 Years |   |   | Over 5 Years |   |   | Total |   |
| ($ in Thousands)                                                                   |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| EARNING ASSETS:                                                                    |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Deposits                                                          |   | $                                       | 229     |   |           | $      | --- |   |   | $ | 229 |   |   | $ | --- |   |   |   | --- |   |   | $ | 229 |   |
| Federal Funds Sold                                                                 |   |                                    | ---     |   |           |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |   |   | --- |   |
| Investment Securities                                                              |   |                                    | 2,158   |   |           |   | 4,859 |   |   |   | 7,017 |   |   |   | 189,437 |   |   |   | 53,454 |   |   |   | 249,908 |   |
| Loans, Net of Unearned Income                                                      |   |                                    | 413,250 |   |           |   | 179,880 |   |   |   | 593,130 |   |   |   | 360,155 |   |   |   | 10,399 |   |   |   | 963,684 |   |
| Other Interest-Bearing Assets                                                      |   |                                    | 6,345   |   |           |   | --- |   |   |   | 6,345 |   |   |   | --- |   |   |   | --- |   |   |   | 6,345 |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest-Earning Assets                                                      |   |                                    | 421,982 |   |           |   | 184,739 |   |   |   | 606,721 |   |   |   | 549,592 |   |   |   | 63,853 |   |   |   | 1,220,166 |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| INTEREST-BEARING LIABILITIES:                                                      |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-Bearing Demand Deposits (1)                                               |   |                                    | 203,285 |   |           |   | --- |   |   |   | 203,285 |   |   |   | --- |   |   |   | --- |   |   |   | 203,285 |   |
| Savings (1)                                                                        |   |                                    | 36,285  |   |           |   | --- |   |   |   | 36,285 |   |   |   | --- |   |   |   | --- |   |   |   | 36,285 |   |
| Time Deposits                                                                      |   |                                    | 177,446 |   |           |   | 434,446 |   |   |   | 611,892 |   |   |   | 93,560 |   |   |   | 147 |   |   |   | 705,599 |   |
| Other Borrowings (2)                                                               |   |                                    | 19,000  |   |           |   | 1,000 |   |   |   | 20,000 |   |   |   | 41,000 |   |   |   | 30,000 |   |   |   | 91,000 |   |
| Subordinated Debentures                                                            |   |                                    | 24,229  |   |           |   | --- |   |   |   | 24,229 |   |   |   | --- |   |   |   | --- |   |   |   | 24,229 |   |
| Federal Funds Purchased                                                            |   |                                    | 12,697  |   |           |   | --- |   |   |   | 12,697 |   |   |   | --- |   |   |   | --- |   |   |   | 12,697 |   |
| Repurchase Agreements                                                              |   |                                    | 20,000  |   |           |   | --- |   |   |   | 20,000 |   |   |   | 20,000 |   |   |   | --- |   |   |   | 40,000 |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Interest-Bearing Liabilities                                                 |   |                                    | 492,942 |   |           |   | 435,446 |   |   |   | 928,388 |   |   |   | 154,560 |   |   |   | 30,147 |   |   |   | 1,113,095 |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate-Sensitivity Gap                                                      |   |                                    | (70,960 | )      |           |   | (250,707 | ) |   |   | (321,667 | ) |   |   | 395,032 |   |   |   | 33,706 |   |   |   | 107,071 |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative Interest-Sensitivity Gap                                                |   |                                    | (70,960 | )      |           |   | (321,667 | ) |   |   | (321,667 | ) |   |   | 73,365 |   |   |   | 107,071 |   |   |   |   |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest Rate-Sensivitiy Gap as a Percentage of Interest-Earning Assets            |   |                                    | (5.82   | %)     |           |   | (20.55 | %) |   |   | (26.36 | %) |   |   | 32.38 | % |   |   | 2.76 | % |   |   |   |   |
|                                                                               |   |                                    |    |   |           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative Interest Rate-Sensitivity as as a Percentage of Interest-Earning Assets |   |                                    | (5.82   | %)     |           |   | (26.36 | %) |   |   | (26.36 | %) |   |   | 6.01 | % |   |   | 8.78 | % |   |   |   |   |

----

Table of Contents

----

Table of Contents

Item

----

Table of Contents

ITEM

ITEM

ITEM 

ITE

ITE

|           |   | For    |         |   | Against |   |
|----------------|--------|--------|--------------|--------|---------|--------|
|           |   |   |         |   |    |   |
| Morris Downing |   |   | 5,187,347.50 |   |    |   | 59,728.71 |   |
| Dan Minix      |   |   | 5,205,159.50 |   |    |   | 41,916.71 |   |
| Jonathan Ross  |   |   | 5,207,502.50 |   |    |   | 39,573.71 |   |
| Jerry Harrell  |   |   | 5,012,352.50 |   |    |   | 234,723.71 |   |
| Terry Hester   |   |   | 5,189,690.50 |   |    |   | 57,385.71 |   |
| Terry Coleman  |   |   | 5,204,791.36 |   |    |   | 42,284.85 |   |
| Gene Waldron   |   |   | 5,207,502.50 |   |    |   | 39,573.71 |   |
| Bill Roberts   |   |   | 5,207,502.50 |   |    |   | 39,573.71 |   |
| Al Ross        |   |   | 5,207,502.50 |   |    |   | 39,573.71 |   |
| Charles Myler  |   |   | 5,202,502.50 |   |    |   | 44,573.71 |   |
| Mark Massee    |   |   | 5,207,502.50 |   |    |   | 39,573.71 |   |

| For    |         |   | Against |   |       | Abstained |   |
|--------|--------------|--------|---------|--------|------------|-----------|--------|
|   | 5,045,249.61 |   |    |   | 177,975.71 |      |   |   | 23,848.89 |   |

ITE

----

Table of Contents

IT

|   | 3.1 | Articles of Incorporation |
|--------|-----|---------------------------|

|   | 3.2 | Bylaws, as Amended |
|--------|-----|--------------------|

|   | 3.3 | Article of Amendment to the Company’s Articles of Incorporation Authorizing Additional Capital Stock in the Form of Ten Million Shares of Preferred Stock |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3.4 | Articles of Amendment to the Company’s Articles of Incorporation Establishing the Terms of the Series A Preferred Stock |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------|

|   | 4.1 | Instruments Defining the Rights of Security Holders |
|--------|-----|-----------------------------------------------------|

|   | 4.2 | Warrant to Purchase up to 500,000 shares of Common Stock |
|--------|-----|----------------------------------------------------------|

|   | 4.3 | Form of Series A Preferred Stock Certificate |
|--------|-----|----------------------------------------------|

|   | 10.1 | Deferred Compensation Plan and Sample Director Agreement |
|--------|------|----------------------------------------------------------|

|   | 10.2 | Profit-Sharing Plan Dated January 1, 1979 |
|--------|------|-------------------------------------------|

|   | 10.3 | 1999 Restricted Stock Grant Plan and Restricted Stock Grant Agreement |
|--------|------|-----------------------------------------------------------------------|

----

Table of Contents

|   | 10.4 | 2004 Restricted Stock Grant Plan and Restricted Stock Grant Agreement |
|--------|------|-----------------------------------------------------------------------|

|   | 10.5 | Lease Agreement – Mobile Home Tracts, LLC c/o Stafford Properties, Inc. and Colony Bank Worth |
|--------|------|-----------------------------------------------------------------------------------------------------|

|   | 10.6 | Letter Agreement, Dated January 9, 2009, Including Securities Purchase Agreement – Standard Terms Incorporated by Reference Therein, Between the Company and the United States Department of the Treasury |
|--------|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 10.7 | Form of Waiver, Executed by Each of Messrs Al D. Ross, Terry L. Hester, Henry F. Brown, Jr., Walter P. Patten and Larry E. Stevenson |
|--------|------|--------------------------------------------------------------------------------------------------------------------------------------|

11.1

31.1

31.2

32.1

----

Table of Contents

SIG

|                                                                                  | /s/ Al D. Ross                                |   |
|---------------------------------------------------------------------------------------|-----------------------------------------------|--------|
| Date:           August 7, 2009 | Al D. Ross,                                   |   |
|                                                                                  | President and Chief Executive Officer         |   |
|                                                                                  |                                          |   |
|                                                                                  |                                          |   |
|                                                                                  |                                          |   |
|                                                                                  | /s/ Terry L. Hester                           |   |
| Date:           August 7, 2009 | Terry L. Hester, Executive Vice President and |   |
|                                                                                  | Chief Financial Officer                       |   |

----