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| Louisiana                               | 26-0513559             |
|-----------------------------------------|------------------------|
| (State or other jurisdiction            | (I.R.S. Employer       |
| incorporation or organization)          | Identification Number) |
|                                    |                   |
| 400 East Thomas Street                  |                   |
| Hammond, Louisiana                      | 70401                  |
| (Address of principal executive office) | (Zip Code)             |

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| Part I.    | Financial Information                                                                                 | Page   |
|------------|-------------------------------------------------------------------------------------------------------|--------|
| Item 1.    | Financial Statements (unaudited)                                                                      | 3      |
|       | Consolidated Balance Sheets as of September 30, 2010 and December 31, 2009                            | 3      |
|       | Consolidated Statements of Income for the three and nine months ended September 30, 2010 and 2009     | 4      |
|       | Consolidated Statements of Shareholders' Equity for the nine months ended September 20, 2010 and 2009 | 5      |
|       | Consolidated Statements of Cash Flows for the nine months ended September 30, 2010 and 2009           | 6      |
|       | Notes to Unaudited Consolidated Financial Statements                                                  | 7      |
|       |                                                                                                  |   |
| Item 2.    | Management's Discussion and Analysis of Financial Condition and Results of Operations                 | 18     |
| Item 3.    | Quantitative and Qualitative Disclosures About Market Risk                                            | 28     |
| Item 4T.   | Controls and Procedures                                                                               | 30     |
| Part II.   | Other Information                                                                                     |   |
| Item 1.    | Legal Proceedings                                                                                     | 31     |
| Item 1A.   | Risk Factors                                                                                          | 31     |
| Item 2.    | Exhibits                                                                                              | 31     |
| Signatures |                                                                                                  |

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| FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY |
|------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                    |
| (dollars in thousands, except share data)      |

|                                                               |   | September 30, |                                 | December 31, |   |
|--------------------------------------------------------------------|--------|---------------|--------------------------------------|--------------|--------|
|                                                               |   | 2010          |                                 |         | 2009   |   |
| Assets                                                             |   |          |      (unaudited) |         |   |
| Cash and cash equivalents:                                         |   |          |                                 |         |   |   |
|   Cash and due from banks                                |   | $             | 34,265                               |         |   | $ | 33,425 |   |
|   Interest-earning demand deposits with banks            |   |          | 43                                   |         |   |   | 14 |   |
|   Federal funds sold                                     |   |          | 569                                  |         |   |   | 13,279 |   |
|     Cash and cash equivalents                  |   |          | 34,877                               |         |   |   | 46,718 |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Interest-earning time deposits with banks                          |   |          | -                                    |         |   |   | - |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Investment securities:                                             |   |          |                                 |         |   |   |   |   |
|  Available for sale, at fair value                            |   |          | 386,523                              |         |   |   | 249,480 |   |
| Held to maturity, at cost (estimated fair value                    |   |
|    of $12,462)                                      |   |          | -                                    |         |   |   | 12,349 |   |
|   Investment securities                                  |   |          | 386,523                              |         |   |   | 261,829 |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Federal Home Loan Bank stock, at cost                              |   |          | 2,293                                |         |   |   | 2,547 |   |
| Loans held for sale                                                |   |          | 40                                   |         |   |   | - |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Loans, net of unearned income                                      |   |          | 607,516                              |         |   |   | 589,902 |   |
| Less: allowance for loan losses                                    |   |          | 7,574                                |         |   |   | 7,919 |   |
|   Net loans                                              |   |          | 599,942                              |         |   |   | 581,983 |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Premises and equipment, net                                        |   |          | 16,185                               |         |   |   | 16,704 |   |
| Goodwill                                                           |   |          | 1,999                                |         |   |   | 1,999 |   |
| Intangible assets, net                                             |   |          | 1,784                                |         |   |   | 1,893 |   |
| Other real estate, net                                             |   |          | 3,531                                |         |   |   | 658 |   |
| Accrued interest receivable                                        |   |          | 6,391                                |         |   |   | 5,807 |   |
| Other assets                                                       |   |          | 6,927                                |         |   |   | 10,709 |   |
|   Total Assets                                           |   | $             | 1,060,492                            |         |   | $ | 930,847 |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Liabilities and Stockholders' Equity                               |   |          |                                 |         |   |
| Deposits:                                                          |   |          |                                 |         |   |   |   |   |
|   Noninterest-bearing demand                             |   | $             | 126,447                              |         |   | $ | 131,818 |   |
|   Interest-bearing demand                                |   |          | 169,006                              |         |   |   | 188,252 |   |
|   Savings                                                |   |          | 44,831                               |         |   |   | 40,272 |   |
|   Time                                                   |   |          | 585,653                              |         |   |   | 439,404 |   |
|     Total deposits                             |   |          | 925,937                              |         |   |   | 799,746 |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Short-term borrowings                                              |   |          | 12,409                               |         |   |   | 11,929 |   |
| Accrued interest payable                                           |   |          | 3,116                                |         |   |   | 2,519 |   |
| Long-term borrowings                                               |   |          | 12,508                               |         |   |   | 20,000 |   |
| Other liabilities                                                  |   |          | 2,876                                |         |   |   | 1,718 |   |
|   Total Liabilities                                      |   |          | 956,846                              |         |   |   | 835,912 |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| Stockholders' Equity                                               |   |          |                                 |         |   |   |   |   |
| Preferred stock:                                                   |   |          |                                 |         |   |   |   |   |
| Series A - $1,000 par value - authorized 5,000 shares; issued      |   |
|    and outstanding 2,069.9 shares                   |   |          | 19,801                               |         |   |   | 19,630 |   |
| Series B - $1,000 par value - authorized 5,000 shares; issued      |   |
|    and outstanding 103 shares                       |   |          | 1,123                                |         |   |   | 1,140 |   |
| Common stock:                                                      |   |          |                                 |         |   |   |   |   |
| $1 par value - authorized 100,600,000 shares; issued and           |   |
|     outstanding 5,559,644 shares               |   |          | 5,560                                |         |   |   | 5,560 |   |
| Surplus                                                            |   |          | 26,459                               |         |   |   | 26,459 |   |
| Retained earnings                                                  |   |          | 45,229                               |         |   |   | 40,069 |   |
| Accumulated other comprehensive income                             |   |          | 5,474                                |         |   |   | 2,077 |   |
|   Total Stockholders' Equity                             |   |          | 103,646                              |         |   |   | 94,935 |   |
|     Total Liabilities and Stockholders' Equity |   | $             | 1,060,492                            |         |   | $ | 930,847 |   |
|                                                               |   |          |                                 |         |   |   |   |   |
| See Notes to Consolidated Financial Statements.                    |   |

----

|                                           |   |   |   |   |   |   |   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|
| FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY |
| CONSOLIDATED STATEMENTS OF INCOME (unaudited)  |
| (dollars in thousands, except per share data)  |

|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |
|-----------------------------------------------------------------|--------|---------------------|-----------|--------|---------------------|--------|-----------|--------|--------|--------|-----------|--------|
|                                                            |   | Nine Months         |      |   | Three Months        |   |
|                                                            |   | Ended September 30, |      |   | Ended September 30, |   |
|                                                            |   | 2010                |      |   |                | 2009*  |      |   |   | 2010   |      |   |   | 2009* |   |
| Interest Income:                                                |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |
|   Loans (including fees)                              |   | $                   | 27,209    |   |                | $      | 26,605    |   |   | $      | 9,221     |   |   | $ | 9,075 |   |
|   Loans held for sale                                 |   |                | 5         |   |                |   | 5         |   |   |   | 1         |   |   |   | 2 |   |
|   Deposits with other banks                           |   |                | 31        |   |                |   | 372       |   |   |   | 12        |   |   |   | 63 |   |
|   Securities (including FHLB stock)                   |   |                | 10,723    |   |                |   | 7,581     |   |   |   | 3,779     |   |   |   | 3,039 |   |
|   Federal funds sold                                  |   |                | 8         |   |                |   | 33        |   |   |   | 3         |   |   |   | 6 |   |
|     Total Interest Income                   |   |                | 37,976    |   |                |   | 34,596    |   |   |   | 13,016    |   |   |   | 12,185 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| Interest Expense:                                               |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
|   Demand deposits                                     |   |                | 639       |   |                |   | 1,022     |   |   |   | 209       |   |   |   | 268 |   |
|   Savings deposits                                    |   |                | 32        |   |                |   | 89        |   |   |   | 11        |   |   |   | 12 |   |
|   Time deposits                                       |   |                | 8,760     |   |                |   | 10,381    |   |   |   | 3,231     |   |   |   | 3,286 |   |
|   Borrowings                                          |   |                | 97        |   |                |   | 228       |   |   |   | 27        |   |   |   | 68 |   |
|     Total Interest Expense                  |   |                | 9,528     |   |                |   | 11,720    |   |   |   | 3,478     |   |   |   | 3,634 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| Net Interest Income                                             |   |                | 28,448    |   |                |   | 22,876    |   |   |   | 9,538     |   |   |   | 8,551 |   |
| Provision for loan losses                                       |   |                | 2,506     |   |                |   | 2,091     |   |   |   | 1,204     |   |   |   | 742 |   |
| Net Interest Income after Provision for Loan Losses             |   |                | 25,942    |   |                |   | 20,785    |   |   |   | 8,334     |   |   |   | 7,809 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| Noninterest Income:                                             |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
|   Service charges, commissions and fees               |   |                | 3,070     |   |                |   | 3,093     |   |   |   | 1,072     |   |   |   | 1,073 |   |
|   Net gains on sale of securities                     |   |                | 2,367     |   |                |   | 43        |   |   |   | 1,001     |   |   |   | 33 |   |
|   Loss on securities impairment                       |   |                | 0         |   |                |   | (242      | )      |   |   | 0         |   |   |   | (242 | ) |
|   Net gains on sale of loans                          |   |                | 173       |   |                |   | 345       |   |   |   | 22        |   |   |   | 74 |   |
|   Other                                               |   |                | 1,171     |   |                |   | 852       |   |   |   | 465       |   |   |   | 331 |   |
|     Total Noninterest Income                |   |                | 6,781     |   |                |   | 4,091     |   |   |   | 2,560     |   |   |   | 1,269 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| Noninterest Expense:                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
|   Salaries and employee benefits                      |   |                | 8,789     |   |                |   | 8,184     |   |   |   | 2,945     |   |   |   | 2,691 |   |
|   Occupancy and equipment expense                     |   |                | 2,323     |   |                |   | 2,116     |   |   |   | 815       |   |   |   | 705 |   |
|   Net cost from other real estate & repossessions |   |                | 302       |   |                |   | 266       |   |   |   | 138       |   |   |   | 86 |   |
|   Regulatory assessment                               |   |                | 1,119     |   |                |   | 1,720     |   |   |   | 374       |   |   |   | 355 |   |
|   Other                                               |   |                | 6,624     |   |                |   | 6,014     |   |   |   | 2,183     |   |   |   | 2,130 |   |
|     Total Noninterest Expense               |   |                | 19,157    |   |                |   | 18,300    |   |   |   | 6,455     |   |   |   | 5,967 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| Income Before Income Taxes                                      |   |                | 13,566    |   |                |   | 6,576     |   |   |   | 4,439     |   |   |   | 3,111 |   |
| Provision for income taxes                                      |   |                | 4,737     |   |                |   | 2,282     |   |   |   | 1,572     |   |   |   | 1,083 |   |
| Net Income                                                      |   |                | 8,829     |   |                |   | 4,294     |   |   |   | 2,867     |   |   |   | 2,028 |   |
| Preferred stock dividends                                       |   |                | (1,000    | )      |                |   | (228      | )      |   |   | (334      | )      |   |   | (228 | ) |
| Income Available to Common Shareholders                         |   | $                   | 7,829     |   |                | $      | 4,066     |   |   | $      | 2,533     |   |   | $ | 1,800 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| Per Common Share:                                               |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
|   Earnings                                            |   | $                   | 1.41      |   |                | $      | 0.73      |   |   | $      | 0.46      |   |   | $ | 0.32 |   |
|   Cash dividends paid                                 |   | $                   | 0.48      |   |                | $      | 0.48      |   |   | $      | 0.16      |   |   | $ | 0.16 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| Average Common Shares Outstanding                               |   |                | 5,559,644 |   |                |   | 5,559,644 |   |   |   | 5,559,644 |   |   |   | 5,559,644 |   |
|                                                            |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| *Restated                                                       |   |                |      |   |                |   |      |   |   |   |      |   |   |   |   |   |
| See Notes to Consolidated Financial Statements                  |   |                |      |   |                |

----

| FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY              |
|-------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited) |
| (dollars in thousands, except per share data)               |
|                                                        |   |   |   |   |   |   |   |

|                                                      |   | Series A   |   |   | Series B   |   |   |   |   |   |    |   |   |     |   |   | Accumulated     |   |   |   |   |
|-----------------------------------------------------------|--------|------------|--------|--------|------------|--------|--------|--------|--------|--------|---------|--------|--------|----------|--------|--------|-----------------|--------|--------|--------|--------|
|                                                      |   | Preferred  |   |   | Preferred  |   |   | Common |   |   |    |   |   |     |   |   | Other           |   |   |   |   |
|                                                      |   | Stock      |   |   | Stock      |   |   | Stock  |   |   |    |   |   | Retained |   |   | Comprehensive   |   |   |   |   |
|                                                      |   | $1,000 Par |   |   | $1,000 Par |   |   | $1 Par |   |   | Surplus |   |   | Earnings |   |   | Income / (Loss) |   |   | Total  |   |
|                                                      |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |
| Balance December 31, 2008 as previously reported          |   | $          | -      |   |       | $      | -      |   |   | $      | 5,560   |   |   | $        | 26,459 |   |            | $      | 37,769 |   |   | $ | (3,158 | ) |   | $ | 66,630 |   |
|  Correction of an error                              |   |       | -      |   |       |   | -      |   |   |   | -       |   |   |     | -      |   |            |   | (1,143 | )      |   |   | - |   |   |   | (1,143 | ) |
| Balance December 31, 2008 as restated                     |   |       | -      |   |       |   | -      |   |   |   | 5,560   |   |   |     | 26,459 |   |            |   | 36,626 |   |   |   | (3,158 | ) |   |   | 65,487 |   |
| Preferred Stock Issued                                    |   |       | 19,551 |   |       |   | 1,148  |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   | 20,699 |   |
| Net income                                                |   |       | -      |   |       |   | -      |   |   |   | -       |   |   |     | -      |   |            |   | 4,294  |   |   |   | - |   |   |   | 4,294 |   |
| Change in unrealized loss                                 |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   on available for sale securities,             |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   net of reclassification adjustments and taxes |   |       | -      |   |       |   | -      |   |   |   | -       |   |   |     | -      |   |            |   | -      |   |   |   | 5,718 |   |   |   | 5,718 |   |
| Total income                                              |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   | 10,012 |   |
| Cash dividends on common stock ($0.48 per share)          |   |       |   |   |       |   |   |   |   |   | -       |   |   |     | -      |   |            |   | (2,669 | )      |   |   | - |   |   |   | (2,669 | ) |
| Preferred stock dividend, amortization and accretion      |   |       | (22    | )      |       |   | 3      |   |   |   |    |   |   |     |   |   |            |   | (228   | )      |   |   |   |   |   |   | (247 | ) |
| Balance September 30, 2009 as restated                    |   | $          | 19,529 |   |       | $      | 1,151  |   |   | $      | 5,560   |   |   | $        | 26,459 |   |            | $      | 38,023 |   |   | $ | 2,560 |   |   | $ | 93,282 |   |
|                                                      |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Balance December 31, 2009                                 |   | $          | 19,630 |   |       | $      | 1,140  |   |   | $      | 5,560   |   |   | $        | 26,459 |   |            | $      | 40,069 |   |   | $ | 2,077 |   |   | $ | 94,935 |   |
| Net income                                                |   |       | -      |   |       |   | -      |   |   |   | -       |   |   |     | -      |   |            |   | 8,829  |   |   |   | - |   |   |   | 8,829 |   |
| Change in unrealized gain                                 |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   on available for sale securities,             |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   net of reclassification adjustments and taxes |   |       | -      |   |       |   | -      |   |   |   | -       |   |   |     | -      |   |            |   | -      |   |   |   | 3,397 |   |   |   | 3,397 |   |
| Total income                                              |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   | 12,226 |   |
| Cash dividends on common stock ($0.48 per share)          |   |       | -      |   |       |   | -      |   |   |   | -       |   |   |     | -      |   |            |   | (2,669 | )      |   |   | - |   |   |   | (2,669 | ) |
| Preferred stock dividend, amortization and accretion      |   |       | 171    |   |       |   | (17    | )      |   |   | -       |   |   |     | -      |   |            |   | (1,000 | )      |   |   | - |   |   |   | (846 | ) |
| Balance September 30, 2010                                |   | $          | 19,801 |   |       | $      | 1,123  |   |   | $      | 5,560   |   |   | $        | 26,459 |   |            | $      | 45,229 |   |   | $ | 5,474 |   |   | $ | 103,646 |   |
|                                                      |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |       |   |   |       |   |   |   |   |   |    |   |   |     |   |   |            |   |   |   |   |   |   |   |   |   |   |   |

| See Notes to Consolidated Financial Statements |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

----

| FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY    |
|---------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) |
| (in thousands)                                    |

|                                                                         |   |                            |     |   |   |   |
|------------------------------------------------------------------------------|--------|---------------------------------|----------|--------|--------|--------|
|                                                                         |   | Nine Months Ended September 30, |     |
|                                                                         |   | 2010                            |     |   |   | 2009*  |   |
| Cash Flows From Operating Activities                                         |   |                            |     |   |   |   |   |
| Net income                                                                   |   | $                               | 8,829    |   |   | $      | 4,294 |   |
| Adjustments to reconcile net income to net cash                              |   |                            |     |   |   |   |   |   |
|   provided by operating activities:                                |   |                            |     |   |   |   |   |   |
|     Provision for loan losses                            |   |                            | 2,506    |   |   |   | 2,091 |   |
|     Depreciation and amortization                        |   |                            | 1,086    |   |   |   | 1,070 |   |
|     Amortization of discount on investments              |   |                            | (35      | )      |   |   | (631 | ) |
|     Gain on call or sale of securities                   |   |                            | (2,367   | )      |   |   | (43 | ) |
|     Gain on sale of assets                               |   |                            | (220     | )      |   |   | (313 | ) |
|     Other than temporary impairment charge on securities |   |                            | -        |   |   |   | 243 |   |
|     OREO write-downs and loss on disposition             |   |                            | 177      |   |   |   | 174 |   |
|     FHLB stock dividends                                 |   |                            | (4       | )      |   |   | (4 | ) |
|     Net increase in loans held for sale             |   |                            | (40      | )      |   |   | - |   |
|     Change in other assets and liabilities, net          |   |                            | 3,683    |   |   |   | (1,613 | ) |
| Net Cash Provided By Operating Activities                                    |   |                            | 13,615   |   |   |   | 5,268 |   |
|                                                                         |   |                            |     |   |   |   |   |   |
| Cash Flows From Investing Activities                                         |   |                            |     |   |   |   |   |   |
| Proceeds from sales, maturities and calls of HTM securities                  |   |                            | 12,726   |   |   |   | 22,097 |   |
| Proceeds from sales, maturities and calls of AFS securities                  |   |                            | 721,087  |   |   |   | 1,213,555 |   |
| Funds invested in HTM securities                                             |   |                            | -        |   |   |   | - |   |
| Funds invested in AFS securities                                             |   |                            | (851,856 | )      |   |   | (1,336,004 | ) |
| Proceeds from sale of Federal Home Loan Bank stock                           |   |                            | 1,766    |   |   |   | - |   |
| Funds invested in Federal Home Loan Bank stock                               |   |                            | (1,508   | )      |   |   | - |   |
| Funds invested in time deposits with banks                                   |   |                            | -        |   |   |   | (13,613 | ) |
| Proceeds from maturities of time deposits with banks                         |   |                            | -        |   |   |   | 21,971 |   |
| Net (increase) decrease in loans                                             |   |                            | (23,730  | )      |   |   | 8,465 |   |
| Purchases of premises and equipment                                          |   |                            | (1,202   | )      |   |   | (905 | ) |
| Proceeds from sales of premises and equipment                                |   |                            | 1,099    |   |   |   | 24 |   |
| Proceeds from sales of other real estate owned                               |   |                            | 216      |   |   |   | 328 |   |
| Net Cash Used In Investing Activities                                        |   |                            | (141,402 | )      |   |   | (84,082 | ) |
|                                                                         |   |                            |     |   |   |   |   |   |
| Cash Flows From Financing Activities                                         |   |                            |     |   |   |   |   |   |
| Net increase in deposits                                                     |   |                            | 126,191  |   |   |   | 40,273 |   |
| Net increase in federal funds purchased and short-term borrowings            |   |                            | 480      |   |   |   | 1,728 |   |
| Proceeds from long-term borrowings                                           |   |                            | -        |   |   |   | - |   |
| Repayment of long-term borrowings                                            |   |                            | (7,492   | )      |   |   | (7,510 | ) |
| Proceeds from issuance of preferred stock                                    |   |                            | -        |   |   |   | 20,699 |   |
| Dividends paid                                                               |   |                            | (3,233   | )      |   |   | (1,780 | ) |
| Net Cash Provided By Financing Activities                                    |   |                            | 115,946  |   |   |   | 53,410 |   |
|                                                                         |   |                            |     |   |   |   |   |   |
| Net Decrease In Cash and Cash Equivalents                                    |   |                            | (11,841  | )      |   |   | (25,404 | ) |
| Cash and Cash Equivalents at the Beginning of the Period                     |   |                            | 46,718   |   |   |   | 78,017 |   |
| Cash and Cash Equivalents at the End of the Period                           |   | $                               | 34,877   |   |   | $      | 52,613 |   |
|                                                                         |   |                            |     |   |   |   |   |   |
| Noncash Activities:                                                          |   |                            |     |   |   |   |   |   |
|   Loans transferred to foreclosed assets                           |   | $                               | 3,265    |   |   | $      | 1,074 |   |
|                                                                         |   |                            |     |   |   |   |   |   |
| Cash Paid During The Period:                                                 |   |                            |     |   |   |   |   |   |
|   Interest on deposits and borrowed funds                          |   | $                               | 8,931    |   |   | $      | 10,964 |   |
|   Income taxes                                                     |   | $                               | 5,400    |   |   | $      | 3,100 |   |
|                                                                         |   |                            |     |   |   |   |   |   |
| *Restated                                                                    |   |                            |     |   |   |   |   |   |
| See Notes to Consolidated Financial Statements                               |   |                            |     |   |   |   |   |   |

----

----

|                                                                                                  |                                                                                                                                                     |   |  Fair Value Measurements at                                                                        |
|-------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------|
|                                                                                                  |                                                                                                                                                     |   |     September 30, 2010, Using                                                            |
|                                                                                                  |                                                                                                                                                     |   | Quoted                                                                                                  |   |   |
|                                                                                                  |                                                                                                                                                     |   | Prices In                                                                                               |   |   |
|                                                                                                  |                                                                                                                                                     |   | Active                                                                                                  |   |   |
|                                                                                                  |                                                                                                                                                     |   | Markets                                                                                                 | Significant |   |
|                                                                                                  | Assets/Liabilities                                                                                                                                       |   | For                                                                                                     | Other | Significant |
|                                                                                                  | Measured at Fair                                                                                                                                         |   | Identical                                                                                               | Observable | Unobservable |
|                                                                                                  | Value                                                                                                                                                    |   | Assets                                                                                                  | Inputs | Inputs |
|                                                                                                  | September 30, 2010                                                                                                                                       |   | (Level 1)                                                                                               | (Level 2) | (Level 3) |
|                                                                                                  |                                                                                                                                                     |   |                                                                                                    |   |   |
|                                                                                                  |                                                                                                                                                     |   |                                                                                                    |   |   |
| Securities available for sale             |  $                  386,523      |   |  $           62,140     |  $      315,994  |  $         8,389     |

----

|                                            |   |        |   |   | Other         |   |
|-------------------------------------------------|--------|-------------|--------|--------|---------------|--------|
|                                            |   | Noninterest |   |   | Comprehensive |   |
|                                            |   | Income      |   |   | Income        |   |
|                                            |   |        |   |   |          |   |
|                                            |   |        |   |   |          |   |
| Total gains included in earnings                |   |        | 2,367  |   |          |   |   |
|   (or changes in net assets)          |   |        |   |   |          |   |   |
|                                            |   |        |   |   |          |   |   |
| Increase in unrealized gains relating to assets |   |        |   |   |          |   | 5,021 |   |
|   still held at September 30, 2010    |   |        |   |   |          |   |   |   |
|                                            |   |        |   |   |          |   |   |   |

|                                                        |                         |   | Fair Value Measurements at |   |
|-------------------------------------------------------------|------------------------------|--------|----------------------------|--------|
|                                                        |                         |   | September 30, 2010, Using  |   |
|                                                        |                         |   | Quoted                     |   |   |   |   |   |   |
|                                                        |                         |   | Prices In                  |   |   |   |   |   |   |
|                                                        |                         |   | Active                     |   |   |   |   |   |   |
|                                                        |                         |   | Markets                    |   | Significant |   |   |   |   |
|                                                        | Assets/Liabilities           |   | For                        |   | Other |   |   | Significant |   |
|                                                        | Measured at Fair             |   | Identical                  |   | Observable |   |   | Unobservable |   |
|                                                        | Value                        |   | Assets                     |   | Inputs |   |   | Inputs |   |
|                                                        | September 30, 2010 |   | (Level 1)                  |   | (Level 2) |   |   | (Level 3) |   |
|                                                        |                         |   |                       |   |   |   |   |   |   |
|                                                        |                         |   |                       |   |   |   |   |   |   |
| Impaired Loans                |                         |   |                       |   | $ | 1,461 |   |   | $ | 24,598 |   |
| Other Real Estate Owned       |                         |   |                       |   | $ | 1,835 |   |   |   |   |   |
|                                                        |                         |   |                       |   |   |   |   |   |   |   |   |

----

|                                          |   |               |    |   |              |   |   |       |   |   |   |   |   |      |    |   |       |   |    |       |   |   |   |   |
|-----------------------------------------------|--------|--------------------|---------|--------|-------------------|--------|--------|------------|--------|--------|--------|--------|--------|-----------|---------|--------|------------|--------|---------|------------|--------|--------|--------|--------|
|                                          |   | September 30, 2010 |    |   | December 31, 2009 |   |
|                                          |   |               |    |   | Gross             |   |   | Gross      |   |   |   |   |   |      |    |   | Gross      |   |    | Gross      |   |   |   |   |
|                                          |   | Amortized          |    |   | Unrealized        |   |   | Unrealized |   |   | Fair   |   |   | Amortized |    |   | Unrealized |   |    | Unrealized |   |   | Fair   |   |
|                                          |   | Cost               |    |   | Gains             |   |   | Losses     |   |   | Value  |   |   | Cost      |    |   | Gains      |   |    | Losses     |   |   | Value  |   |
|                                          |   | (in thousands)     |    |   | (in thousands)    |   |
| Available for sale:                           |   |               |    |   |              |   |   |       |   |   |   |   |   |      |    |   |       |   |    |       |   |   |   |   |
| U.S. Government Agencies                      |   | $                  | 240,619 |   |              | $      | 1,462  |       |   | $      | (38    | )      |   |      | 242,043 |   |       | $      | 140,843 |       |   | $      | 382    |   |   | $ | (1,562 | ) |   | $ | 139,663 |   |
| Mortgage-backed obligations                   |   |               | -       |   |              |   | -      |       |   |   | -      |   |   |      | -       |   |       |   | 1,472   |       |   |   | 104    |   |   |   | - |   |   |   | 1,576 |   |
| Asset-backed securities                       |   |               | -       |   |              |   | -      |       |   |   | -      |   |   |      | -       |   |       |   | -       |       |   |   | 8      |   |   |   | - |   |   |   | 8 |   |
| Corporate debt securities                     |   |               | 122,994 |   |              |   | 7,169  |       |   |   | (323   | )      |   |      | 129,840 |   |       |   | 87,238  |       |   |   | 5,627  |   |   |   | (776 | ) |   |   | 92,089 |   |
| Mutual funds or other equity securities       |   |               | 5,170   |   |              |   | 146    |       |   |   | (108   | )      |   |      | 5,208   |   |       |   | 6,556   |       |   |   | 83     |   |   |   | (495 | ) |   |   | 6,144 |   |
| Municipal bonds                               |   |               | 9,388   |   |              |   | 44     |       |   |   |   |   |   |      | 9,432   |   |       |   | 10,000  |       |   |   | -      |   |   |   | - |   |   |   | 10,000 |   |
|  Total available for sale securities     |   | $                  | 378,171 |   |              | $      | 8,821  |       |   | $      | (469   | )      |   | $         | 386,523 |   |       | $      | 246,109 |       |   | $      | 6,204  |   |   | $ | (2,833 | ) |   | $ | 249,480 |   |
|                                          |   |               |    |   |              |   |   |       |   |   |   |   |   |      |    |   |       |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                          |   |               |    |   |              |   |   |       |   |   |   |   |   |      |    |   |       |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to maturity:                             |   |               |    |   |              |   |   |       |   |   |   |   |   |      |    |   |       |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies                      |   |               | -       |   |              |   | -      |       |   |   | -      |   |   |      | -       |   |       | $      | 10,721  |       |   | $      | 52     |   |   |   | - |   |   | $ | 10,773 |   |
| Mortgage-backed obligations                   |   |               | -       |   |              |   | -      |       |   |   | -      |   |   |      | -       |   |       |   | 1,628   |       |   |   | 61     |   |   |   | - |   |   |   | 1,689 |   |
|   Total held to maturity securities |   | $                  | 0       |   |              | $      | 0      |       |   | $      | 0      |   |   | $         | 0       |   |       | $      | 12,349  |       |   | $      | 113    |   |   | $ | 0 |   |   | $ | 12,462 |   |
|                                          |   |               |    |   |              |   |   |       |   |   |   |   |   |      |    |   |       |   |    |       |   |   |   |   |   |   |   |   |   |   |   |   |

|                                            |   | September 30, 2010 |    |
|-------------------------------------------------|--------|--------------------|---------|
|                                            |   | Amortized          |    |   | Fair |   |
|                                            |   | Cost               |    |   | Value |   |
|                                            |   | (in thousands)     |    |
| Available For Sale:                             |   |               |    |   |   |   |
| Due in one year or less                         |   | $                  | 12,602  |   |   | $ | 12,926 |   |
| Due after one year through five years           |   |               | 67,358  |   |   |   | 71,980 |   |
| Due after five years through ten years          |   |               | 198,187 |   |   |   | 209,259 |   |
| Over ten years                                  |   |               | 100,024 |   |   |   | 92,358 |   |
|   Total available for sale securities |   | $                  | 378,171 |   |   | $ | 386,523 |   |
|                                            |   |               |    |   |   |   |   |   |

----

|                                            |   | Less Than 12 Months |   |   | 12 Months or More |   |   | Total      |   |
|-------------------------------------------------|--------|---------------------|--------|--------|-------------------|--------|--------|------------|--------|
|                                            |   |                |   |   | Gross             |   |   |       |   |   | Gross |   |   |   |   |   | Gross |   |
|                                            |   |                |   |   | Unrealized        |   |   |       |   | Unrealized |   |   |   |   |   | Unrealized |   |
|                                            |   | Fair Value          |   |   | Losses            |   |   | Fair Value |   |   | Losses |   |   | Fair Value |   |   | Losses |   |
|                                            |   | (in thousands)      |   |
| Available for sale:                             |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and U.S.                          |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |
|  Government agencies                       |   | $                   | 28,661 |   |              | $      | 38     |       |   |   | - |   |   |   | - |   |   | $ | 28,661 |   |   | $ | 38 |   |
| Preferred securities                            |   |                | -      |   |              |   | -      |       |   |   | 1,561 |   |   |   | 108 |   |   |   | 1,561 |   |   |   | 108 |   |
| Mortgage-backed obligations                     |   |                | -      |   |              |   | -      |       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Asset-backed securities                         |   |                | -      |   |              |   | -      |       |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Corporate debt securities                       |   |                | 4,228  |   |              |   | 66     |       |   |   | 1,593 |   |   |   | 257 |   |   |   | 5,821 |   |   |   | 323 |   |
|   Mutual funds or other equity securites   |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   | - |   |   |   | - |   |
|   Total available for sale securities |   | $                   | 32,889 |   |              | $      | 104    |       |   | $ | 3,154 |   |   | $ | 365 |   |   | $ | 36,043 |   |   | $ | 469 |   |
|                                            |   |                |   |   |              |   |   |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                 |   | Amortized      |    |   | Fair   |   |
|------------------------------------------------------|--------|----------------|---------|--------|--------|--------|
|                                                 |   | Cost           |    |   | Value  |   |
|                                                 |   | (in thousands) |    |   |   |   |
|                                                 |   |           |    |   |   |   |
| Federal Home Loan Bank (FHLB)                        |   | $              | 121,617 |   |   | $      | 122,158 |   |
| Federal Home Loan Mortgage Corporation (Freddie Mac) |   |           | 11,998  |   |   |   | 12,161 |   |
| Federal National Mortgage Association (Fannie Mae)   |   |           | 32,000  |   |   |   | 32,094 |   |
| Federal Farm Credit Bank (FFCB)                      |   |           | 75,004  |   |   |   | 75,630 |   |
|  Total                                          |   | $              | 240,619 |   |   | $      | 242,043 |   |
|                                                 |   |           |    |   |   |   |   |   |

----

|                                                                               |   | September 30,          |    |   | December 31, |   |
|------------------------------------------------------------------------------------|--------|------------------------|---------|--------|--------------|--------|
|                                                                               |   | 2010                   |    |   | 2009         |   |
|                                                                               |   |                   |    |   | As % of      |   |   |   |   |   | As % of |   |
|                                                                               |   | Balance                |    |   | Category     |   |   | Balance |   |   | Category |   |
|                                                                               |   | (dollars in thousands) |    |
| Real estate                                                                        |   |                   |    |   |         |   |   |   |   |   |   |   |
|    Construction & land development                              |   | $                      | 70,795  |   |         |   | 11.6 | % |   | $ | 78,686 |   |   |   | 13.3 | % |
|    Farmland                                                         |   |                   | 12,420  |   |         |   | 2.0 | % |   |   | 11,352 |   |   |   | 1.9 | % |
|    1-4 Family                                                       |   |                   | 75,370  |   |         |   | 12.4 | % |   |   | 77,470 |   |   |   | 13.1 | % |
|    Multifamily                                                      |   |                   | 15,499  |   |         |   | 2.6 | % |   |   | 8,927 |   |   |   | 1.5 | % |
|    Non-farm non-residential                                         |   |                   | 293,030 |   |         |   | 48.2 | % |   |   | 300,673 |   |   |   | 51.0 | % |
|       Total real estate                              |   |                   | 467,114 |   |         |   | 76.8 | % |   |   | 477,108 |   |   |   | 80.8 | % |
|                                                                               |   |                   |    |   |         |   |   |   |   |   |   |   |   |   |   |   |
| Agricultural                                                                       |   |                   | 24,034  |   |         |   | 4.0 | % |   |   | 14,017 |   |   |   | 2.4 | % |
| Commercial and industrial                                                          |   |                   | 93,442  |   |         |   | 15.3 | % |   |   | 82,348 |   |   |   | 13.9 | % |
| Consumer and other                                                                 |   |                   | 23,720  |   |         |   | 3.9 | % |   |   | 17,226 |   |   |   | 2.9 | % |
|         Total loans before unearned income |   |                   | 608,310 |   |         |   | 100.0 | % |   |   | 590,699 |   |   |   | 100.0 | % |
| Less: unearned income                                                              |   |                   | (794    | )      |         |   |   |   |   |   | (797 | ) |   |   |   |   |
|         Total loans after unearned income  |   | $                      | 607,516 |   |         |   |   |   |   | $ | 589,902 |   |   |   |   |   |

|                                     |   |               |    |   |     |   |    |   |   |
|------------------------------------------|--------|--------------------|---------|--------|----------|--------|---------|--------|--------|
|                                     |   | September 30, 2010 |    |
|                                     |   | Fixed              |    |   | Floating |   |    | Total  |   |
|                                     |   |               |    |   |     |   |    |   |   |
|                                     |   |               |    |   |     |   |    |   |   |
| One year or less                         |   | $                  | 84,516  |   |     | $      | 169,158 |   |   | $ | 253,674 |   |
| Over one to five years                   |   |               | 163,669 |   |     |   | 122,941 |   |   |   | 286,610 |   |
| Over five to fifteen years               |   |               | 2,737   |   |     |   | 27,520  |   |   |   | 30,257 |   |
| Over fifteen years                       |   |               | 10,758  |   |     |   | 4,073   |   |   |   | 14,831 |   |
|   Subtotal                          |   |               | 261,680 |   |     |   | 323,692 |   |   |   | 585,372 |   |
|                                     |   |               |    |   |     |   |    |   |   |   |   |   |
| Non-Accrual Loans                        |   |               |    |   |     |   |    |   |   |   | 22,144 |   |
|                                     |   |               |    |   |     |   |    |   |   |   |   |   |
|                                     |   | $                  | 261,680 |   |     | $      | 323,692 |   |   | $ | 607,516 |   |
|                                     |   |               |    |   |     |   |    |   |   |   |   |   |
| Percent of Loan Portfolio Fixed Loans    |   |               | 44.70   | %      |     |   |    |   |   |   |   |   |
| Percent of Loan Portfolio Floating Loans |   |               | 55.30   | %      |     |   |    |   |   |   |   |   |

----

|                                  |   |          |   |   |         |   |
|---------------------------------------|--------|---------------|--------|--------|--------------|--------|
|                                  |   | September 30, |   |   | December 31, |   |
|                                  |   | 2010          |   |   | 2009         |   |
|                                  |   |          |   |   |         |   |
|                                  |   |          |   |   |         |   |
| Balance beginning of period           |   | $             | 7,919  |   |         | $      | 6,482 |   |
| Provision charged to expense          |   |          | 2,506  |   |         |   | 4,155 |   |
| Loans charged-off                     |   |          | (3,086 | )      |         |   | (2,879 | ) |
| Recoveries                            |   |          | 235    |   |         |   | 161 |   |
|   Allowance for loan losses |   | $             | 7,574  |   |         | $      | 7,919 |   |

|                                                             |   | Nine Months Ended |   |
|------------------------------------------------------------------|--------|-------------------|--------|
|                                                             |   | September 30,     |   |
|                                                             |   | 2010              |   |   | 2009 |   |
|                                                             |   |              |   |   |   |   |
|                                                             |   |              |   |   |   |   |
| Balance at beginning of period                                   |   | $                 | 7,919  |   |   | $ | 6,482 |   |
|                                                             |   |              |   |   |   |   |   |   |
| Charge-offs:                                                     |   |              |   |   |   |   |   |   |
|    Real estate loans:                                  |   |              |   |   |   |   |   |   |
|       Construction and land development |   |              | (5     | ) |   |   | (273 | ) |
|       Farmland                          |   |              | -      |   |   |   | - |   |
|       One- to four- family residential  |   |              | (1,062 | ) |   |   | (364 | ) |
|       Multifamily                       |   |              | -      |   |   |   | - |   |
|       Non-farm non-residential          |   |              | (138   | ) |   |   | (547 | ) |
|    Commercial and industrial loans                     |   |              | (1,525 | ) |   |   | (207 | ) |
|    Consumer and other                                  |   |              | (356   | ) |   |   | (421 | ) |
|       Total charge-offs                 |   |              | (3,086 | ) |   |   | (1,812 | ) |
|                                                             |   |              |   |   |   |   |   |   |
| Recoveries:                                                      |   |              |   |   |   |   |   |   |
|    Real estate loans:                                  |   |              |   |   |   |   |   |   |
|       Construction and land development |   |              | 1      |   |   |   | 1 |   |
|       Farmland                          |   |              | -      |   |   |   | 1 |   |
|       One- to four- family residential  |   |              | 10     |   |   |   | 14 |   |
|       Multifamily                       |   |              | -      |   |   |   | - |   |
|       Non-farm non-residential          |   |              | 1      |   |   |   | - |   |
|    Commercial and industrial loans                     |   |              | 114    |   |   |   | 18 |   |
|    Consumer and other                                  |   |              | 109    |   |   |   | 100 |   |
|       Total recoveries                  |   |              | 235    |   |   |   | 134 |   |
|                                                             |   |              |   |   |   |   |   |   |
| Net charge-offs                                                  |   |              | (2,851 | ) |   |   | (1,678 | ) |
| Provision for loan losses                                        |   |              | 2,506  |   |   |   | 2,091 |   |
|                                                             |   |              |   |   |   |   |   |   |
| Balance at end of period                                         |   | $                 | 7,574  |   |   | $ | 6,895 |   |

----

| ●     | The nature of credit risk inherent in the entity’s portfolio of financing receivables; |
|----------------------------|----------------------------------------------------------------------------------------------|

| ●     | How that risk is analyzed and assessed in arriving at the allowance for credit losses; and |
|----------------------------|--------------------------------------------------------------------------------------------|

| ●     | The changes and reasons for those changes in the allowance for credit losses. |
|----------------------------|-------------------------------------------------------------------------------|

----

| ●     | Credit quality indicators of financing receivables at the end of the reporting period by class of financing receivables; |
|----------------------------|--------------------------------------------------------------------------------------------------------------------------|

| ●     | The aging of past due financing receivables at the end of the reporting period by class of financing receivables; and |
|----------------------------|-----------------------------------------------------------------------------------------------------------------------|

| ●     | The nature and extent of troubled debt restructurings that occurred during the period by class of financing receivables and their effect on the allowance for credit losses. |
|----------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

| ●      | Net income for the third quarter of 2010 and 2009 was $2.9 million and $2.0 million respectively.  Net income to common shareholders after preferred stock dividends was $2.5 million and $1.8 million for the third quarter of 2010 and 2009, with earnings per common share of $0.46 and $0.32 respectively. Net income for the nine months ending September 30, 2010 was $8.8 million compared to $4.3 million for the nine months ended September 30, 2009.  Net income to common shareholders after preferred stock dividends was $7.8 million and $4.1 million with earnings per common share of $1.41 and $0.73 respectively.  The increase in net income was primarily the result of an increase in net interest income due to a larger investment portfolio and higher loan pricing.  The Company also recognized gains from sales of securities. |
|----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | Net interest income for the third quarter of 2010 and 2009 was $9.5 million and $8.6 million, respectively. Net interest income for the nine months ending September 30, 2010 was $28.4 million compared to $22.9 million for the same period in 2009.  The net interest margin for the Company was 4.09% at the end of the third quarter 2010 and 3.45% at the end of the third quarter 2009. |
|----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | The provision for loan losses for the third quarter of 2010 was $1.2 million compared to $0.7 million for the third quarter of 2009.  The provision for loan loss for the nine months ending September 30, 2010 was $2.5 million compared to $2.1 million for the nine months ended September 30, 2009. |
|----------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | Total assets at September 30, 2010 were $1.1 billion, an increase of $129.7 million or 13.9% when compared to $930.8 million at December 31, 2009. The increase in assets primarily resulted from excess cash received from deposit growth which was ultimately invested in loans and securities investments. |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | Investment securities totaled $386.5 million at September 30, 2010, an increase of $124.7 million when compared to $261.8 million at December 31, 2009. At September 30, 2010, available for sale securities, at fair value, totaled $386.5 million, an increase of $137.0 million when compared to December 31, 2009. The Company did not have any securities in the held to maturity category as of September 30, 2010.  Our securities in the held to maturity category totaled $12.3 million at December 31, 2009. |
|----------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | The net loan portfolio at September 30, 2010 totaled $599.9 million, an increase of $17.9 million from the December 31, 2009 level of $582.0 million. Net loans are reduced by the allowance for loan losses which totaled $7.6 million for September 30, 2010 and $7.9 million for December 31, 2009. |
|----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | Non-performing assets at September 30, 2010 were $27.1 million, an increase of $11.4 million compared to December 31, 2009. |
|----------------------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ●      | Total deposits increased $126.2 million or 15.8% in the first nine months of 2010 compared to the year ended December 31, 2009. Of this increase, individual and business deposits increased by $80.2 million and public fund deposits increased by $46.0 million. |
|----------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | Return on average assets for the three months ending September 30, 2010 and September 30, 2009 was 1.16% and 0.86% respectively. Return on average assets for the nine months ended September 30, 2010 and September 30, 2009 were 1.19% and 0.60%, respectively.  Return on average common shareholders’ equity for the three months ending September 30, 2010 and September 30, 2009 were 12.84% and 9.14% respectively.  Return on average common shareholders’ equity for the nine month period ending September 30, 2010 and September 30, 2009 was 13.37% and 7.70%, respectively.  Return on average assets is calculated by dividing annualized net income before preferred dividends by average assets.  Return on common shareholders’ equity is calculated by dividing net earnings applicable to common shareholders by average common shareholders’ equity. |
|----------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●      | The Company’s Board of Directors declared cash dividends of $0.16 per common share in the third quarter of 2010 and 2009. |
|----------------------------------|---------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                                                                    |   |           |   |   |         |   |
|-----------------------------------------------------------------------------------------|--------|----------------|--------|--------|--------------|--------|
|                                                                                    |   | September 30,  |   |   | December 31, |   |
|                                                                                    |   | 2010           |   |   | 2009         |   |
|                                                                                    |   | (in thousands) |   |
| Non-accrual loans:                                                                      |   |           |   |   |         |   |
|    Real estate loans:                                                         |   |           |   |   |         |   |
|       Construction and land development                        |   | $              | 3,340  |   |         | $      | 2,841 |   |
|       Farmland                                                 |   |           | 37     |   |         |   | 54 |   |
|       One- to four- family residential                         |   |           | 3,630  |   |         |   | 2,814 |   |
|       Multifamily                                              |   |           |   |   |         |   |   |   |
|       Non-farm non-residential                                 |   |           | 14,182 |   |         |   | 7,439 |   |
|    Non-real estate loans:                                                     |   |           |   |   |         |   |   |   |
|       Agricultural                                             |   |           |   |   |         |   |   |   |
|       Commercial and industrial                                |   |           | 926    |   |         |   | 830 |   |
|       Consumer and other                                       |   |           | 29     |   |         |   | 205 |   |
|          Total non-accrual loans                |   |           | 22,144 |   |         |   | 14,183 |   |
|                                                                                    |   |           |   |   |         |   |   |   |
| Loans 90 days and greater delinquent                                                    |   |           |   |   |         |   |   |   |
| and still accruing:                                                                     |   |           |   |   |         |   |   |   |
|    Real estate loans:                                                         |   |           |   |   |         |   |   |   |
|       Construction and land development                        |   |           | -      |   |         |   | - |   |
|       Farmland                                                 |   |           | -      |   |         |   | - |   |
|       One- to four- family residential                         |   |           | 1,384  |   |         |   | 757 |   |
|       Multifamily                                              |   |           | -      |   |         |   | - |   |
|       Non-farm non-residential                                 |   |           | -      |   |         |   | - |   |
|    Non-real estate loans:                                                     |   |           |   |   |         |   |   |   |
|    Agricultural                                                               |   |           | -      |   |         |   | - |   |
|    Commercial and industrial                                                  |   |           | -      |   |         |   | - |   |
|    Consumer and other                                                         |   |           | -      |   |         |   | 28 |   |
|       Total loans 90 days greater                              |   |           |   |   |         |   |   |   |
|          delinquent and still accruing          |   |           | 1,384  |   |         |   | 785 |   |
|                                                                                    |   |           |   |   |         |   |   |   |
|    Restructured loans                                                         |   |           | -      |   |         |   | - |   |
|                                                                                    |   |           |   |   |         |   |   |   |
|    Total nonperforming loans                                                  |   |           | 23,528 |   |         |   | 14,968 |   |
|                                                                                    |   |           |   |   |         |   |   |   |
| Real estate owned:                                                                      |   |           |   |   |         |   |   |   |
|    Real estate loans:                                                         |   |           |   |   |         |   |   |   |
|       Construction and land development                        |   |           | 236    |   |         |   | - |   |
|       Farmland                                                 |   |           | -      |   |         |   | - |   |
|       One- to four- family residential                         |   |           | 2,966  |   |         |   | 292 |   |
|       Multifamily                                              |   |           | -      |   |         |   | - |   |
|    Non-farm non-residential                                                   |   |           | 329    |   |         |   | 366 |   |
|       Non-real estate loans:                                   |   |           |   |   |         |   |   |   |
|       Agricultural                                             |   |           | -      |   |         |   | - |   |
|       Commercial and industrial                                |   |           | -      |   |         |   | - |   |
|       Consumer and other                                       |   |           | -      |   |         |   | - |   |
|          Total real estate owned                |   |           | 3,531  |   |         |   | 658 |   |
|                                                                                    |   |           |   |   |         |   |   |   |
|       Total nonperforming assets                               |   |           | 27,059 |   |         |   | 15,626 |   |
|                                                                                    |   |           |   |   |         |   |   |   |
|       Performing troubled debt restructing                     |   |           | 11,652 |   |         |   | - |   |
|                                                                                    |   |           |   |   |         |   |   |   |
|       Total nonperforming assets and troubled debt restructing |   | $              | 38,711 |   |         | $      | 15,626 |   |

----

| ●     | Past due and nonperforming assets; |
|----------------------------|------------------------------------|

| ●     | Specific internal analysis of loans requiring special attention; |
|----------------------------|------------------------------------------------------------------|

| ●     | The current level of regulatory classified and criticized assets and the associated risk factors with each; |
|----------------------------|-------------------------------------------------------------------------------------------------------------|

| ●     | Changes in underwriting standards or lending procedures and policies; |
|----------------------------|-----------------------------------------------------------------------|

| ●     | Charge-off and recovery practices; |
|----------------------------|------------------------------------|

| ●     | National and local economic and business conditions; |
|----------------------------|------------------------------------------------------|

| ●     | Nature and volume of loans; |
|----------------------------|-----------------------------|

| ●     | Overall portfolio quality; |
|----------------------------|----------------------------|

| ●     | Adequacy of loan collateral; |
|---------------------------------|------------------------------|

| ●     | Quality of loan review system and degree of oversight by its Board of Directors; |
|----------------------------|----------------------------------------------------------------------------------|

| ●     | Competition and legal and regulatory requirements on borrowers; |
|----------------------------|-----------------------------------------------------------------|

| ●     | Examinations and review by the Company's internal loan review department, independent accountants and third-party independent loan review personnel; and |
|----------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

| ●     | Examinations of the loan portfolio by federal and state regulatory agencies. |
|----------------------------|------------------------------------------------------------------------------|

----

----

|                                     |   |          |    |   |   |   |
|------------------------------------------|--------|---------------|---------|--------|--------|--------|
|                                     |   | September 30, |    |
|                                     |   | 2010          |    |   | 2009   |   |
|                                     |   |          |    |   |   |   |
| Loans:                                   |   |          |    |   |   |   |
|   Average outstanding balance  |   | $             | 606,163 |   |   | $      | 601,572 |   |
|   Balance at end of period     |   | $             | 607,516 |   |   |   | 595,152 |   |
|                                     |   |          |    |   |   |   |   |   |
| Allowance for Loan Losses:               |   |          |    |   |   |   |   |   |
|   Balance at beginning of year |   | $             | 7,919   |   |   | $      | 6,482 |   |
|   Provision charged to expense |   |          | 2,506   |   |   |   | 2,091 |   |
|   Loans charged-off            |   |          | (3,086  | )      |   |   | (1,812 | ) |
|   Recoveries                   |   |          | 235     |   |   |   | 134 |   |
|   Balance at end of period     |   | $             | 7,574   |   |   | $      | 6,895 |   |
|                                     |   |          |    |   |   |   |   |   |

|                                   |   | September 30,          |    |   | December 31, |   |    | Increase/(Decrease) |   |
|----------------------------------------|--------|------------------------|---------|--------|--------------|--------|---------|---------------------|--------|
|                                   |   | 2010                   |    |   | 2009         |   |    | Amount              |   |   | Percent |   |
|                                   |   | (dollars in thousands) |    |   |         |   |    |                |   |
| Deposits:                              |   |                   |    |   |         |   |    |                |   |   |   |   |
|   Noninterest-bearing demand |   | $                      | 126,447 |   |         | $      | 131,818 |                |   | $ | (5,371 | ) |   |   | -4.1 | % |
|   Interest-bearing demand    |   |                   | 169,006 |   |         |   | 188,252 |                |   |   | (19,246 | ) |   |   | -10.2 | % |
|   Savings                    |   |                   | 44,831  |   |         |   | 40,272  |                |   |   | 4,559 |   |   |   | 11.3 | % |
|   Time                       |   |                   | 585,653 |   |         |   | 439,404 |                |   |   | 146,249 |   |   |   | 33.3 | % |
|     Total deposits |   | $                      | 925,937 |   |         | $      | 799,746 |                |   | $ | 126,191 |   |   |   | 15.8 | % |

----

----

|                                                       |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |
|------------------------------------------------------------|--------|------------------------|---------------------------------|--------|----------|--------|--------|--------|--------|--------|---------|--------|--------|----------|---------|--------|--------|--------|
|                                                       |   |                   | Nine Months Ended September 30, |   |
|                                                       |   | 2010                   |                            |   | 2009     |
|                                                       |   | Average                |                            |   |     |   |   | Yield/ |   |   | Average |   |   |     |    |   | Yield/ |   |
|                                                       |   | Balance                |                            |   | Interest |   |   | Rate   |   |   | Balance |   |   | Interest |    |   | Rate   |   |
|                                                       |   | (dollars in thousands) |                            |   |     |   |   |   |   |   |    |   |
| Assets                                                     |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |
| Interest-earning assets:                                   |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |
|   Interest-earning deposits with banks           |   | $                      | 69                              |   |     | $      | 31     |   |   |   | 0.25    | %      |   | $        | 16,555  |   |   | $      | 372 |   |   |   | 3.00 | % |
|   Securities (including FHLB stock)              |   |                   | 314,553                         |   |     |   | 10,723 |   |   |   | 4.56    | %      |   |     | 237,778 |   |   |   | 7,581 |   |   |   | 4.26 | % |
|   Federal funds sold                             |   |                   | 9,105                           |   |     |   | 8      |   |   |   | 0.12    | %      |   |     | 31,760  |   |   |   | 33 |   |   |   | 0.14 | % |
| Loans, net of unearned income                              |   |
| including loans held for sale                              |   |                   | 606,163                         |   |     |   | 27,214 |   |   |   | 6.00    | %      |   |     | 601,572 |   |   |   | 26,610 |   |   |   | 5.91 | % |
|     Total interest-earning assets      |   |                   | 929,890                         |   |     |   | 37,976 |   |   |   | 5.46    | %      |   |     | 887,665 |   |   |   | 34,596 |   |   |   | 5.21 | % |
|                                                       |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |   |   |   |   |   |   |
| Noninterest-earning assets:                                |   |
|   Cash and due from banks                        |   |                   | 35,163                          |   |     |   |   |   |   |   |    |   |   |     | 43,161  |   |   |   |   |   |   |   |   |   |
|   Premises and equipment, net                    |   |                   | 16,842                          |   |     |   |   |   |   |   |    |   |   |     | 16,067  |   |   |   |   |   |   |   |   |   |
|   Other assets                                   |   |                   | 9,323                           |   |     |   |   |   |   |   |    |   |   |     | 9,059   |   |   |   |   |   |   |   |   |   |
|     Total                              |   | $                      | 991,218                         |   |     |   |   |   |   |   |    |   |   | $        | 955,952 |   |   |   |   |   |   |   |   |   |
|                                                       |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                       |   |
| Interest-bearing liabilities:                              |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |   |   |   |   |   |   |
|   Demand deposits                                |   | $                      | 193,554                         |   |     |   | 639    |   |   |   | 0.44    | %      |   | $        | 212,569 |   |   |   | 1,022 |   |   |   | 0.64 | % |
|   Savings deposits                               |   |                   | 42,927                          |   |     |   | 32     |   |   |   | 0.10    | %      |   |     | 41,624  |   |   |   | 89 |   |   |   | 0.29 | % |
|   Time deposits                                  |   |                   | 498,173                         |   |     |   | 8,760  |   |   |   | 2.35    | %      |   |     | 485,629 |   |   |   | 10,381 |   |   |   | 2.85 | % |
|   Borrowings                                     |   |                   | 28,353                          |   |     |   | 97     |   |   |   | 0.46    | %      |   |     | 21,799  |   |   |   | 228 |   |   |   | 1.39 | % |
|     Total interest-bearing liabilities |   |                   | 763,007                         |   |     |   | 9,528  |   |   |   | 1.67    | %      |   |     | 761,621 |   |   |   | 11,720 |   |   |   | 1.48 | % |
|                                                       |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing liabilities:                           |   |
|   Demand deposits                                |   |                   | 123,420                         |   |     |   |   |   |   |   |    |   |   |     | 117,471 |   |   |   |   |   |   |   |   |   |
|   Other                                          |   |                   | 5,221                           |   |     |   |   |   |   |   |    |   |   |     | 6,236   |   |   |   |   |   |   |   |   |   |
|     Total liabilities                  |   |                   | 891,648                         |   |     |   |   |   |   |   |    |   |   |     | 885,328 |   |   |   |   |   |   |   |   |   |
|   Stockholders' equity                           |   |                   | 99,570                          |   |     |   |   |   |   |   |    |   |   |     | 70,624  |   |   |   |   |   |   |   |   |   |
|     Total                              |   | $                      | 991,218                         |   |     |   |   |   |   |   |    |   |   | $        | 955,952 |   |   |   |   |   |   |   |   |   |
| Net interest income                                        |   |                   |                            |   |     | $      | 28,448 |   |   |   |    |   |   |     |    |   |   | $      | 22,876 |   |   |   |   |   |
| Net interest rate spread (1)                               |   |                   |                            | 3.79   | %        |   |   |   |   |   |    |   |   |     |    | 3.73   | %      |
| Net interest-earning assets (2)                            |   | $                      | 166,883                         |   |     |   |   |   |   |   |    |   |   | $        | 126,044 |   |   |   |   |   |   |   |   |   |
| Net interest margin (3)                                    |   |                   |                            |   |     |   |   |   |   |   | 4.09    | %      |   |     |    |   |   |   |   |   |   |   | 3.45 | % |
|                                                       |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |   |   |   |   |   |   |
| Average interest-earning assets to                         |   |
| interest-bearing liabilities                               |   |                   |                            | 121.87 | %        |   |   |   |   |   |    |   |   |     |    | 116.55 | %      |
|                                                       |   |                   |                            |   |     |   |   |   |   |   |    |   |   |     |    |   |   |   |   |   |   |   |   |   |

----

|                                 |   | Nine Months Ended September 30, |   |   | Three Months Ended September 30, |   |
|--------------------------------------|--------|---------------------------------|--------|--------|----------------------------------|--------|
|                                 |   | 2010                            |   |   | 2009                             |   |   | 2010 |   |   | 2009 |   |
|                                 |   |                            |   |   |                             |   |   |   |   |   |   |   |
| Other noninterest expense:           |   |                            |   |   |                             |   |   |   |   |   |   |   |
| Legal and professional fees          |   | $                               | 1,177  |   |                             | $      | 942 |   |   | $ | 490 |   |   | $ | 352 |   |
| Data processing                      |   |                            | 1,468  |   |                             |   | 1,352 |   |   |   | 485 |   |   |   | 464 |   |
| Marketing and public relations       |   |                            | 697    |   |                             |   | 821 |   |   |   | 114 |   |   |   | 354 |   |
| Taxes - sales, capital and franchise |   |                            | 555    |   |                             |   | 702 |   |   |   | 177 |   |   |   | 166 |   |
| Operating supplies                   |   |                            | 475    |   |                             |   | 389 |   |   |   | 129 |   |   |   | 141 |   |
| Travel and lodging                   |   |                            | 319    |   |                             |   | 284 |   |   |   | 128 |   |   |   | 85 |   |
| Other                                |   |                            | 1,933  |   |                             |   | 1,524 |   |   |   | 660 |   |   |   | 568 |   |
|   Total other expense      |   | $                               | 6,624  |   |                             | $      | 6,014 |   |   | $ | 2,183 |   |   | $ | 2,130 |   |
|                                 |   |                            |   |   |                             |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                              |   | Interest Sensitivity Within       |    |
|---------------------------------------------------|--------|-----------------------------------|---------|
|                                              |   | 3 Months                          |    |   | Over 3 Months |   |   | Total |   |   | Over |   |   |   |   |
|                                              |   | Or Less                           |    |   | thru 12 Months |   |   | One Year |   |   | One Year |   |   | Total |   |
|                                              |   | (unaudited, dollars in thousands) |    |   |   |   |
| Earning Assets:                                   |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loans (including loans held for sale) |   | $                                 | 240,608 |   |   | $ | 103,919 |   |   | $ | 344,527 |   |   |   | 262,989 |   |   | $ | 607,516 |   |
|   Securities (including FHLB stock)     |   |                              | 1,810   |   |   |   | 11,116 |   |   |   | 12,926 |   |   |   | 373,597 |   |   |   | 386,523 |   |
|   Federal funds sold                    |   |                              | 569     |   |   |   | - |   |   |   | 569 |   |   |   | - |   |   |   | 569 |   |
|   Other earning assets                  |   |                              | 43      |   |   |   | - |   |   |   | 43 |   |   |   |   |   |   |   | 43 |   |
|     Total earning assets      |   |                              | 243,030 |   |   |   | 115,035 |   |   |   | 358,065 |   |   |   | 636,586 |   |   | $ | 994,651 |   |
|                                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Source of Funds:                                  |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing accounts:                        |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Demand deposits           |   |                              | 42,251  |   |   |   | - |   |   |   | 42,251 |   |   |   | 126,755 |   |   |   | 169,006 |   |
|     Savings                   |   |                              | 11,208  |   |   |   | - |   |   |   | 11,208 |   |   |   | 33,623 |   |   |   | 44,831 |   |
|     Time deposits             |   |                              | 116,683 |   |   |   | 165,006 |   |   |   | 281,689 |   |   |   | 303,966 |   |   |   | 585,655 |   |
|     Short-term borrowings     |   |                              | 12,409  |   |   |   | - |   |   |   | 12,409 |   |   |   | - |   |   |   | 12,409 |   |
|     Long-term borrowings      |   |                              | -       |   |   |   | 12,508 |   |   |   | 12,508 |   |   |   | - |   |   |   | 12,508 |   |
| Noninterest-bearing, net                          |   |                              | -       |   |   |   | - |   |   |   | - |   |   |   | 170,242 |   |   |   | 170,242 |   |
|     Total source of funds     |   |                              | 182,551 |   |   |   | 177,514 |   |   |   | 360,065 |   |   |   | 634,586 |   |   | $ | 994,651 |   |
| Period gap                                        |   |                              | 60,479  |   |   |   | (62,479 | ) |   |   | (2,000 | ) |   |   | 2,000 |   |   |   |   |   |
| Cumulative gap                                    |   | $                                 | 60,479  |   |   | $ | (2,000 | ) |   | $ | (2,000 | ) |   |   | - |   |   |   |   |   |
|                                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative gap as a                               |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  percent of earning assets                   |   |                              | 6.08    | % |   |   | -0.20 | % |   |   | -0.20 | % |   |   |   |   |   |   |   |   |
|                                              |   |                              |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

----

| Exhibit           |                                                                                                       |
|-------------------|------------------------------------------------------------------------------------------------------------|
| Number            |  Exhibit                                                                                              |
|    14.0 |   Code of Ethics                                                                                 |
|              |                                                                                                       |
|    31.1 |   Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|              |                                                                                                       |
|    31.2 |   Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
|              |                                                                                                       |
|    32.1 |   Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|              |                                                                                                       |
|    32.2 |   Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

----

|   |   |                            |   |
|--------|--------|---------------------------------|--------|
|   |   | FIRST GUARANTY BANCSHARES, INC. |
|   |              |                    |   |
|--------|-------------------|-------------------------|--------|
|   |              |                    |   |
|   |              |                    |   |
| Date:  | November 15, 2010 | By: /s/ Alton B. Lewis  |   |
|   |              | Alton B. Lewis          |   |
|   |              | Chief Executive Officer |   |
|   |              |                    |   |
|   |              |                    |   |
| Date:  | November 15, 2010 | By: /s/ Eric J. Dosch   |   |
|   |              | Eric J. Dosch           |   |
|   |              | Chief Financial Officer |   |
|   |              | Secretary and Treasurer |   |