----

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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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Table of Contents

|       |                                                                                                    | Page  |
|------------|---------------------------------------------------------------------------------------------------------|------------|
| Part I.    | Financial Information                                                                                   |       |
|       |                                                                                                    |       |
| Item 1.    | Financial Statements (unaudited)                                                                        | 3          |
|       |                                                                                                    |       |
|       | Consolidated Balance Sheets as of March 31, 2011 and December 31, 2010                                  | 3          |
|       |                                                                                                    |       |
|       | Consolidated Statements of Income for the three months ended March 31, 2011 and 2010               | 4          |
|       |                                                                                                    |       |
|       | Consolidated Statements of Shareholders' Equity for the three months ended March 31, 2011 and 2010 | 5          |
|       |                                                                                                    |       |
|       | Consolidated Statements of Cash Flows for the three months ended March 31, 2011 and 2010                | 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                                                                                       | 30         |
|       |                                                                                                    |       |
| Item 1.    | Legal Proceedings                                                                                       | 30         |
|       |                                                                                                    |       |
| Item 1A.   | Risk Factors                                                                                            | 30         |
|       |                                                                                                    |       |
| Item 2.    | Exhibits                                                                                                | 30         |
|       |                                                                                                    |
| Signatures |                                                                                                    |

----

| FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY                                                |   |
|-----------------------------------------------------------------------------------------------|--------|
| CONSOLIDATED BALANCE SHEETS                                                                   |   |
| (in thousands, except share data)                                                             |   |
|                                                                                          |   | March 31, 2011 |   | December 31, 2010 |   |
|                                                                                          |   |  (unaudited) |   |   |   |
| Assets                                                                                        |   |   |   |   |   |
| Cash and cash equivalents:                                                                    |   |   |   |   |   |
|   Cash and due from banks                                                           |   | $ | 34,797 |   | $ | 35,695 |   |
|   Interest-earning demand deposits with banks                                       |   |   | 14 |   |   | 13 |   |
|   Federal funds sold                                                                |   |   | 20,355 |   |   |  9,129 |   |
|     Cash and cash equivalents                                             |   |   | 55,166 |   |   | 44,837 |   |
|                                                                                          |   |   |   |   |   |   |   |
| Investment securities:                                                                        |   |   |   |   |   |   |   |
|  Available for sale, at fair value                                                       |   |   | 323,879 |   |   | 322,128 |   |
|  Held to maturity, at cost (estimated fair value of $187,928 and $155,326, respectively) |   |   | 193,783 |   |   | 159,833 |   |
|     Investment securities                                                 |   |   | 517,662 |   |   | 481,961 |   |
|                                                                                          |   |   |   |   |   |   |   |
| Federal Home Loan Bank stock, at cost                                                         |   |   |   812 |   |   | 1,615 |   |
|  Loans held for sale                                                                     |   |   | 168 |   |   | - |   |
|                                                                                          |   |   |   |   |   |   |   |
| Loans, net of unearned income                                                                 |   |   | 569,447 |   |   | 575,640 |   |
| Less: allowance for loan losses                                                               |   |   | 8,229 |   |   | 8,317 |   |
|   Net loans                                                                         |   |   | 561,218 |   |   | 567,323 |   |
|                                                                                          |   |   |   |   |   |   |   |
| Premises and equipment, net                                                                   |   |   | 16,329 |   |   | 16,023 |   |
| Goodwill                                                                                      |   |   | 1,999 |   |   | 1,999 |   |
| Intangible assets, net                                                                        |   |   | 1,705 |   |   | 1,729 |   |
| Other real estate, net                                                                        |   |   | 766 |   |   | 577 |   |
| Accrued interest receivable                                                                   |   |   | 7,773 |   |   | 7,664 |   |
| Other assets                                                                                  |   |   | 7,880 |   |   |  9,064 |   |
|   Total Assets                                                                      |   | $ | 1,171,478 |   | $ | 1,132,792 |   |
|                                                                                          |   |   |   |   |   |   |   |
| Liabilities and Stockholders' Equity                                                          |   |   |   |   |   |   |   |
| Deposits:                                                                                     |   |   |   |   |   |   |   |
|   Noninterest-bearing demand                                                        |   | $ | 142,674 |   | $ | 130,897 |   |
|   Interest-bearing demand                                                           |   |   | 193,628 |   |   | 192,139 |   |
|   Savings                                                                           |   |   | 49,395 |   |   | 46,663 |   |
|   Time                                                                              |   |   | 667,815 |   |   | 637,684 |   |
|     Total deposits                                                        |   |   | 1,053,512 |   |   | 1,007,383 |   |
|                                                                                          |   |   |   |   |   |   |   |
| Short-term borrowings                                                                         |   |   | 13,408 |   |   | 12,589 |   |
| Accrued interest payable                                                                      |   |   | 4,268 |   |   | 3,539 |   |
| Other liabilities                                                                             |   |   |  1,863 |   |   | 11,343 |   |
|   Total Liabilities                                                                 |   |   | 1,073,051 |   |   | 1,034,854 |   |
|                                                                                          |   |   |   |   |   |   |   |
| Stockholders' Equity                                                                          |   |   |   |   |   |   |   |
| Preferred stock:                                                                              |   |   |   |   |   |   |   |
| Series A - $1,000 par value - authorized 5,000 shares; issued and outstanding 2,069.9 shares  |   |   | 19,915 |   |   | 19,859 |   |
| Series B - $1,000 par value - authorized 5,000 shares; issued and outstanding 103 shares      |   |   | 1,111 |   |   | 1,116 |   |
| Common stock:                                                                                 |   |   |   |   |   |   |   |
| $1 par value - authorized 100,600,000 shares; issued and outstanding 5,559,644 shares         |   |   | 5,560 |   |   | 5,560 |   |
| Surplus                                                                                       |   |   | 26,461 |   |   | 26,461 |   |
| Retained earnings                                                                             |   |   | 46,375 |   |   | 45,201 |   |
| Accumulated other comprehensive income (loss)                                                 |   |   | (995 | ) |   | (259 | )  |
|   Total Stockholders' Equity                                                        |   |   | 98,427 |   |   | 97,938 |   |
|     Total Liabilities and Stockholders' Equity                            |   | $ | 1,171,478 |   | $ | 1,132,792 |   |

----

| FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY       |   |
|------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF INCOME (unaudited)        |   |
| (in thousands, except share data)                    |   |
|                                                 |   | Three Months Ended March 31, |   |
|                                                 |   | 2011 |   | 2010 |   |
| Interest Income:                                     |   |   |   |   |   |
|   Loans (including fees)                   |   | $ |  8,461 |   | $ | 8,804 |   |
|   Loans held for sale                      |   |   | 1 |   |   |  1 |   |
|   Deposits with other banks                |   |   | 10 |   |   |   9 |   |
|   Securities (including FHLB stock)        |   |   |  4,762 |   |   | 3,419 |   |
|   Federal funds sold                       |   |   | 5 |   |   |   2 |   |
|     Total Interest Income        |   |   | 13,239 |   |   | 12,235 |   |
|                                                 |   |   |   |   |   |   |   |
| Interest Expense:                                    |   |   |   |   |   |   |   |
|   Demand deposits                          |   |   | 227 |   |   | 201 |   |
|   Savings deposits                         |   |   | 11 |   |   | 10 |   |
|   Time deposits                            |   |   |  3,506 |   |   |  2,718 |   |
|   Borrowings                               |   |   |   6 |   |   |  41 |   |
|     Total Interest Expense       |   |   |  3,750 |   |   |  2,970 |   |
|                                                 |   |   |   |   |   |   |   |
| Net Interest Income                                  |   |   |  9,489 |   |   |  9,265 |   |
| Less: Provision for loan losses                      |   |   |  464 |   |   | 679 |   |
| Net Interest Income after Provision for Loan Losses  |   |   |  9,025 |   |   |  8,586 |   |
|                                                 |   |   |   |   |   |   |   |
| Noninterest Income:                                  |   |   |   |   |   |   |   |
|   Service charges, commissions and fees    |   |   | 1,010 |   |   |   983 |   |
|   Net gains on securities                  |   |   |    41 |   |   | 261 |   |
|   Loss on securities impairment            |   |   | (97 | )  |   | - |   |
|   Net gains on sale of loans               |   |   |  48 |   |   | 59 |   |
|   Other                                    |   |   | 287 |   |   | 339 |   |
|     Total Noninterest Income     |   |   | 1,289 |   |   | 1,642  |   |
|                                                 |   |   |   |   |   |   |   |
| Noninterest Expense:                                 |   |   |   |   |   |   |   |
|   Salaries and employee benefits           |   |   |  3,035 |   |   | 2,898 |   |
|   Occupancy and equipment expense          |   |   | 813 |   |   | 752 |   |
|   Other                                    |   |   | 2,786 |   |   | 2,606 |   |
|     Total Noninterest Expense    |   |   |  6,634 |   |   | 6,256 |   |
|                                                 |   |   |   |   |   |   |   |
| Income Before Income Taxes                           |   |   |  3,680 |   |   | 3,972 |   |
| Less: Provision for income taxes                     |   |   | 1,284 |   |   | 1,389 |   |
| Net Income                                           |   |   |  2,396 |   |   | 2,583 |   |
| Preferred Stock Dividends                            |   |   | (333 | )  |   | (333 | ) |
| Income Available to Common Shareholders              |   | $ | 2,063 |   | $ | 2,250 |   |
|                                                 |   |   |   |   |   |   |   |
| Per Common Share:                                    |   |   |   |   |   |   |   |
|   Earnings                                 |   | $ | 0.37 |   | $ | 0.40 |   |
|   Cash dividends paid                      |   | $ | 0.16 |   | $ | 0.16 |   |
|                                                 |   |   |   |   |   |   |   |
| Average Common Shares Outstanding                    |   |   | 5,559,644 |   |   | 5,559,644 |   |
|  See Notes to Consolidated Financial Statements |   |   |   |   |   |   |   |

----

FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY

|                                                                                       |   |             |   |            |   |         |   |         |   |           |   |          |           |         |   |
|--------------------------------------------------------------------------------------------|--------|------------------|--------|-----------------|--------|--------------|--------|--------------|--------|----------------|--------|---------------|----------------|--------------|--------|
|                                                                                       |   | 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, 2009                                                                  | $      | 19,630           | $      | 1,140           | $      | 5,560        | $      | 26,461       | $      | 40,067         | $      | 2,077         | $         | 94,935       |   |
| Net income                                                                                 |   |   -         |   |   -        |   |   -     |   |   -     |   |   2,583   |   |   -      |           |   2,583 |   |
| Change in unrealized loss on AFS securities, net of reclassification adjustments and taxes |   |   -         |   |   -        |   |   -     |   |   -     |   |   -       |   |   1,832  |           |   1,832 |   |
| Comprehensive Income                                                                       |   |   -         |   |    -  |   |   -     |   |   -     |   |   -       |   |   -      |           |   4,415 |   |
| Cash dividends on common stock ($0.16 per share)                                      |   |    -   |   |    -  |   |   -     |   |   -     |   |   (889    | )      |   -      |           |   (889  | )      |
| Preferred stock dividend, amortization and accretion                                       |   |   56        |   |   (6       | )      |   -     |   |   -     |   |   (333    | )      |   -      |           |   (283  | )      |
| Balance March 31, 2010                                                                     | $      | 19,686           | $      | 1,134           | $      | 5,560        | $      | 26,461       | $      | 41,428         | $      | 3,909         | $         | 98,178  |   |
|                                                                                       |   |             |   |            |   |         |   |         |   |           |   |          |           |         |   |
| Balance December 31, 2010                                                                  | $      |  19,859     | $      |  1,116     | $      |  5,560  | $      |  26,461 | $      |  45,201   | $      |  (259    | )  $ |  97,938 |   |
| Net income                                                                                 |   |   -         |   |   -        |   |   -     |   |   -     |   |   2,396   |   |   -      |           |   2,396 |   |
| Change in unrealized loss on AFS securities, net of reclassification adjustments and taxes |   |   -         |   |   -        |   |   -     |   |   -     |   |   -       |   |   (736   | )              |   (736  | )      |
| Comprehensive Income                                                                       |   |    -   |   |    -  |   |   -     |   |   -     |   |   -       |   |   -      |           |   1,660 |   |
| Cash dividends on common stock ($0.16 per share)                                           |   |    -   |   |    -  |   |   -     |   |   -     |   |   (889    | )      |   -      |           |   (889  | )      |
| Preferred stock dividend, amortization and accretion                                       |   |   56        |   |   (5       | )      |   -     |   |   -     |   |   (333    | )      |   -      |           |   (282  | )      |
| Balance March 31, 2011                                                                | $      | 19,915           | $      | 1,111           | $      | 5,560        | $      | 26,461       | $      | 46,375         | $      | (995          | )  $ | 98,427       |   |
| See Notes to Consolidated Financial Statements                                             |   |             |   |            |   |         |   |         |   |           |   |          |           |         |   |

----

| FIRST GUARANTY BANCSHARES, INC. AND SUBSIDIARY                                    |
|-----------------------------------------------------------------------------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)                                 |
| (in thousands)                                                                    |
|                                                                              |   |   |   |
|                                                                              |   |    Three Months Ended March 31, |   |
|                                                                              |   | 2011 |   | 2010 |   |
| Cash Flows From Operating Activities                                              |   |   |   |   |   |
| Net income                                                                        |   | $  |  2,396 |   | $ | 2,583 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |   |   |   |   |   |   |   |
|     Provision for loan losses                                 |   |   | 464 |   |   | 679 |   |
|     Depreciation and amortization                             |   |   | 371 |   |   | 120 |   |
|     Amortization/Accretion of investments                     |   |   | 161 |   |   | (76 | ) |
|    (Gain) Loss on securities                                       |   |   | (41 | )  |   | (261 | ) |
|    (Gain) Loss on sale of assets                              |   |   | (48 | ) |   | (58 | ) |
|     Other than temporary impairment charge on securities      |   |   | 97 |   |   | - |   |
|     ORE writedowns and loss on disposition                    |   |   | 54 |   |   | 33 |   |
|     FHLB stock dividends                                      |   |   |  (2 | )  |   | (2 | ) |
|     Net (increase) in loans held for sale                     |   |   | (168 | ) |   | (264 | ) |
|     Change in other assets and liabilities, net               |   |   | 2,666 |   |   | 3,629 |   |
| Net Cash Provided By Operating Activities                                         |   |   | 5,950 |   |   | 6,383 |   |
|                                                                              |   |   |   |   |   |   |   |
| Cash Flows From Investing Activities                                              |   |   |   |   |   |   |   |
| Proceeds from maturities, calls and sales of HTM securities                  |   |   |  - |   |   | 106 |   |
| Proceeds from maturities, calls and sales of AFS securities                       |   |   | 12,071 |   |   | 335,474 |   |
| Funds invested in HTM securities                                                  |   |   | (43,907 | )  |   | - |   |
| Funds Invested in AFS securities                                                  |   |   | (15,159 | ) |   | (330,365 | ) |
| Proceeds from sale/redemption of Federal Home Loan Bank stock                     |   |   | 1,028 |   |   | - |   |
| Funds invested in Federal Home Loan Bank stock                                    |   |   | (223 | ) |   | (237 | ) |
| Net decrease (increase) in loans                                                  |   |   | 5,346 |   |   | (13,929 | ) |
| Purchase of premises and equipment                                                |   |   | (606 | )  |   | (536 | ) |
| Proceeds from sales of other real estate owned                                    |   |   |  52 |   |   | 73 |   |
| Net Cash Used In Investing Activities                                             |   |   | (41,398 | )  |   | (9,414 | ) |
|                                                                              |   |   |   |   |   |   |   |
| Cash Flows From Financing Activities                                              |   |   |   |   |   |   |   |
| Net increase in deposits                                                     |   |   |  46,129 |   |   | 27,711 |   |
| Net increase (decrease) in federal funds purchased and short-term borrowings      |   |   |  819 |   |   | (2,265 | ) |
| Repayment of long-term borrowings                                                 |   |   |  - |   |   | (2,492 | ) |
| Dividends paid                                                                    |   |   |  (1,171 | )  |   | (889 | ) |
| Net Cash Provided By Financing Activities                                         |   |   | 45,777 |   |   | 22,065 |   |
|                                                                              |   |   |   |   |   |   |   |
| Net Increase In Cash and Cash Equivalents                                         |   |   |  10,329 |   |   | 19,034 |   |
| Cash and Cash Equivalents at the Beginning of the Period                          |   |   |  44,837 |   |   | 46,718 |   |
| Cash and Cash Equivalents at the End of the Period                                |   | $  |  55,166 |   | $ | 65,752 |   |
|                                                                              |   |   |   |   |   |   |   |
| Noncash Activities:                                                               |   |   |   |   |   |   |   |
|   Loans transferred to foreclosed assets                                |   | $  |    295 |   | $ | 864 |   |
| Cash Paid During The Period:                                                      |   |   |   |   |   |   |   |
|   Interest on deposits and borrowed funds                               |   | $  |   3,021 |   | $ | 2,464 |   |
|   Income taxes                                                          |   | $  |  - |   | $ | 500 |   |

----

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

----

|                                                                             |   | March 31, 2011 |   | December 31, 2010 |   |
|----------------------------------------------------------------------------------|--------|----------------|--------|-------------------|--------|
|                                                                             |   | (in thousands) |   |
|  Securities available for sale measured at fair value                       | $      | 323,879        | $      | 322,128           |   |
|  Fair Value Measurements Using:                                             |   |           |   |              |   |
|    Quoted Prices in Active Markets For Identical Assets (Level 1) | $      | 6,499          | $      | 14,374            |   |
|    Significant Other Observable Inputs (Level 2)                       | $      | 308,998        | $      | 299,366           |   |
|    Significant Unoberservable Inputs (Level 3)                    | $      | 8,382          | $      | 8,388             |   |

|                                                                                 |     | Noninterest Income    |   | Other Comprehensive Income |   |
|--------------------------------------------------------------------------------------|----------|-----------------------|--------|----------------------------|--------|
|                                                                                 |     |   (in thousands) |   |
| Total gains included in earnings (or changes in net assets)                          | $        | 41                    |   |                       |   |
|  Impairment loss                                                                |   $ |   (97            | )      |                       |   |
| Changes in unrealized gains (losses) relating to assets still held at March 31, 2011 |     |                  | $      | (736                       | )      |

|                                                                             |    |  At March 31, |   |
|----------------------------------------------------------------------------------|---------|--------------------|--------|
|                                                                             |    | 2011               |   | 2010 |   |
|                                                                             |    | (in thousands)     |   |
| Impaired loans measured at fair value                                            | $       | 47,490             | $      | 47,763 |   |
|  Fair Value Measurements Using:                                             |    |               |   |   |   |
|    Quoted Prices in Active Markets For Identical Assets (Level 1) |    | -                  |   | - |   |
|    Significant Other Observable Inputs (Level 2)                       | $       | 12,532             | $      | 30,364 |   |
|    Significant Unoberservable Inputs (Level 3)                    | $       | 34,958             | $      | 17,399 |   |
|                                                                             |    |               |   |   |   |
|                                                                             |    |               |   |   |   |
| Other real estate owned measured at fair value                    | $       | 766                | $      | 577 |   |
|  Fair Value Measurements Using:                                             |    |               |   |   |   |
|    Quoted Prices in Active Markets For Identical Assets (Level 1)      |    | -                  |   | - |   |
|    Significant Other Observable Inputs (Level 2)                       |  $ | 766                | $      | 577 |   |
|    Significant Unoberservable Inputs (Level 3)                         |    | -                  |   | - |   |

----

|                                          |   | March 31, 2011 |    | December 31, 2010 |
|-----------------------------------------------|--------|----------------|---------|-------------------|
|                                          |   |           |    | Gross             |   | Gross |   |   |   |   |   | Gross |   | Gross |   |   |
|                                          |   | Amortized      |    | Unrealized        |   | Unrealized |   | Fair |   | Amortized |   | Unrealized |   | Unrealized |   | Fair |
|                                          |   | Cost           |    | Gains             |   | Losses |   | Value |   | Cost |   | Gains |   | Losses |   | Value |
|                                          |   | (in thousands) |
| Available for sale:                           |   |           |    |              |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies                      |   | $              | 166,082 |              | $ |  30 |   | $ | (5,163 | ) | $ | 160,949 |   | $ | 172,958 |   | $ | 242 |   | $ |  (3,982 | ) | $ | 169,218 |
| Corporate debt securities                     |   |           | 148,672 |              |   | 4,918 |   |   | (1,154 | ) |   | 152,436 |   |   | 138,925 |   |   | 4,804 |   |   | (1,331 | ) |   |  142,398 |
| Mutual funds or other equity securities       |   |           | 1,250   |              |   | 21 |   |   | (158 | ) |   | 1,113 |   |   | 1,250 |   |   | 20 |   |   | (132 | ) |   | 1,138 |
| Municipal bonds                               |   |           | 9,382   |              |   | - |   |   | (1 | ) |   | 9,381 |   |   |  9,388 |   |   | - |   |   | (14 | ) |   |  9,374 |
|  Total available for sale securities     |   | $              | 325,386 |              | $ | 4,969 |   | $ | (6,476 | ) | $ | 323,879 |   | $ | 322,521 |   | $ | 5,066 |   | $ | (5,459 | ) | $ | 322,128 |
|                                          |   |           |    |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to maturity:                             |   |           |    |              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies                      |   | $              | 193,783 |              | $ | - |   | $ | (5,855 | ) | $ | 187,928 |   | $ | 159,833 |   | $ |  - |   | $ | (4,507 | ) | $ | 155,326 |
|   Total held to maturity securities |   | $              | 193,783 |              | $ | - |   | $ | (5,855 | ) | $ | 187,928 |   | $ | 159,833 |   | $ |   - |   | $ | (4,507 | ) | $ | 155,326 |

|                                            |   | March 31, 2011 |
|-------------------------------------------------|--------|----------------|
|                                            |   | Amortized      |   | Fair |
|                                            |   | Cost           |   | Value |
|                                            |   | (in thousands) |
| Available For Sale:                             |   |           |   |   |
| Due in one year or less                         |   | $              |  9,643 |   | $ |  9,895 |
| Due after one year through five years           |   |           | 68,200 |   |   | 71,570 |
| Due after five years through 10 years           |   |           | 160,232 |   |   | 158,370 |
| Over 10 years                                   |   |           | 87,311 |   |   | 84,044 |
|   Total available for sale securities |   | $              | 325,386 |   | $ | 323,879 |
|                                            |   |           |   |   |   |   |
| Held to Maturity:                               |   |           |   |   |   |   |
| Due in one year or less                         |   | $              | - |   | $ | - |
| Due after one year through five years           |   |           | 31,953 |   |   | 31,817 |
| Due after five years through 10 years           |   |           | 121,831 |   |   | 118,130 |
| Over 10 years                                   |   |           | 39,999 |   |   | 37,981 |
|   Total held to maturity securities   |   | $              | 193,783 |   | $ | 187,928 |

----

|                                                                  |   | 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                                                   |   | $                   | 145,919 |              | $      | 5,163      |   | $ | - |   | $ | - |   | $ | 145,919 |   | $ | 5,163 |
| Corporate debt securities                                             |   |                | 52,008  |              |   | 1,050      |   |   | 1,493 |   |   | 104 |   |   | 53,501 |   |   | 1,154 |
|  Municipals                                                      |   |                | 999     |              |   |   1   |   |   |  - |   |   |  - |   |   |  999 |   |   |    1 |
| Mutual funds or other equity securities                               |   |                | -       |              |   | -          |   |   | 342 |   |   | 158 |   |   | 342 |   |   | 158 |
|   Total available for sale securities                       |   | $                   | 198,926 |              | $      | 6,214      |   | $ | 1,835 |   | $ | 262 |   | $ | 200,761 |   | $ | 6,476 |
|                                                                  |   |                |    |              |   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Held to maturity:                                                     |   |                |    |              |   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Treasury and U.S.                                                |   |                |    |              |   |       |   |   |   |   |   |   |   |   |   |   |   |   |
| Government agencies                                                   |   | $                   | 182,928 |              | $      | 5,855      |   | $ | - |   | $ | - |   | $ | 182,928 |   | $ | 5,855 |
|       Total held to maturity securities |   | $                   | 182,928 |              | $      | 5,855      |   | $ | - |   | $ | - |   | $ | 182,928 |   | $ | 5,855 |

----

|                                                 |   | At March 31, 2011 |
|------------------------------------------------------|--------|-------------------|
|                                                 |   | Amortized Cost    |   | Fair Value |
|                                                 |   | (in thousands)    |
| Federal Home Loan Bank (FHLB)                        |   | $                 | 167,954 |   | $ | 162,580 |
| Federal Home Loan Mortgage Corporation (Freddie Mac) |   |              | 38,991 |   |   | 38,266 |
| Federal National Mortgage Association (Fannie Mae)   |   |              | 32,999 |   |   | 32,182 |
| Federal Farm Credit Bank (FFCB)                      |   |              | 117,921 |   |   | 113,859 |
|  Total                                          |   | $                 | 357,865 |   | $ | 346,887 |

----

|                                                                               |   | March 31, 2011 |    | December 31, 2010 |   |
|------------------------------------------------------------------------------------|--------|----------------|---------|-------------------|--------|
|                                                                               |   |           |    | As % of           |   |   |   | As % of |   |
|                                                                               |   | Balance        |    | Category          |   | Balance |   | Category |   |
|                                                                               |   | (in thousands) |    |
| Real estate                                                                        |   |           |    |              |   |   |   |   |   |
|      Construction & land development                  |   | $              | 68,428  |              |   | 12.0 | % | $ | 65,570 |   |   | 11.4 | % |
|      Farmland                                             |   |           | 13,366  |              |   | 2.3 | % |   | 13,337 |   |   | 2.3 | % |
|      1-4 Family                                           |   |           | 70,369  |              |   | 12.4 | % |   | 73,158 |   |   | 12.7 | % |
|      Multifamily                                          |   |           | 14,386  |              |   | 2.5 | % |   | 14,544 |   |   | 2.5 | % |
|      Non-farm non-residential                             |   |           | 291,205 |              |   | 51.1 | % |   | 292,809 |   |   | 50.8 | % |
| Total real estate                                                                  |   |           | 457,754 |              |   | 80.3 | % |   | 459,418 |   |   | 79.7 | % |
|                                                                               |   |           |    |              |   |   |   |   |   |   |   |   |   |
| Agricultural                                                                       |   |           | 17,446  |              |   | 3.0 | % |   | 17,361 |   |   | 3.0 | % |
| Commercial and industrial                                                          |   |           | 72,362  |              |   | 12.7 | % |   | 76,590 |   |   | 13.3 | % |
| Consumer and other                                                                 |   |           | 22,627  |              |   | 4.0 | % |   | 22,970 |   |   | 4.0 | % |
|         Total loans before unearned income |   |           | 570,189 |              |   | 100.0 | % |   | 576,339 |   |   | 100.0 | % |
| Less: unearned income                                                              |   |           | (742    | )                 |   |   |   |   | (699 | ) |   |   |   |
|         Total loans net of unearned income |   | $              | 569,447 |              |   |   |   | $ | 575,640 |   |   |   |   |

|                                           |   | March 31, 2011 |    |
|------------------------------------------------|--------|----------------|---------|
|                                           |   | Fixed          |    | Floating |   | Total |   |
|                                           |   | (in thousands) |    |
| One year or less                               |   | $              | 66,937  |   | $ | 160,983 |   | $ | 227,920 |   |
| One to five years                              |   |           | 129,383 |   |   | 125,373 |   |   | 254,756 |   |
| Five to 15 years                               |   |           | 2,378   |   |   | 36,495 |   |   | 38,873 |   |
| Over 15 years                                  |   |           | 8,730   |   |   | 11,786 |   |   | 20,516 |   |
|   Subtotal                           |   | $              | 207,428 |   |   | 334,637 |   |   | 542,065 |   |
| Nonaccrual loans                               |   |           |    |   |   |   |   |   | 28,124 |   |
|   Total loans before unearned income |   |           |    |   |   |   |   | $ | 570,189 |   |
|   Unearned income                         |   |           |    |   |   |   |   |   | (742 | ) |
|   Total loans net of unearned income |   |           |    |   |   |   |   | $ | 569,447 |   |

----

|                                                             |   | As of March 31, 2011 |
|------------------------------------------------------------------|--------|----------------------|
|                                                             |   | (in thousands)       |
|                                                             |   | 30-89 Days Past Due  |   | Greater Than 90 Days |   | Total Past Due |   | Current |   | Total Loans |   | Recorded Investment  90 Days Accruing |
|                                                             |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                                                      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Construction & land development      |   |  $              | 337 |   |  $ | 2,588 |   |  $ | 2,925 |   |  $ | 65,503 |   |  $ | 68,428 |   |  $ | - |
|     Farmland                                 |   |                 | - |   |   | 38 |   |   | 38 |   |   | 13,328 |   |   | 13,366 |   |   | - |
|      1 - 4 family                       |   |                 | 1,058 |   |   | 5,813 |   |   | 6,871 |   |   | 63,498 |   |   | 70,369 |   |   | 2,025 |
|      Multifamily                        |   |                 | - |   |   | - |   |   | - |   |   | 14,386 |   |   | 14,386 |   |   | - |
|      Non-farm non-residential           |   |                 | 1,804 |   |   |  19,231 |   |   | 21,035 |   |   |  270,170 |   |   |  291,205 |   |   |  - |
| Total real estate                                                |   |                 | 3,199 |   |   |  27,670 |   |   |  30,869 |   |   | 426,885 |   |   | 457,754 |   |   |  2,025 |
|                                              |   |                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Agricultural                                                     |   |                 | 177 |   |   | 444 |   |   | 621 |   |   | 16,825 |   |   | 17,446 |   |   | - |
| Commercial and industrial                                        |   |                 | 3,113 |   |   | 1,137 |   |   | 4,250 |   |   | 68,112 |   |   | 72,362 |   |   | - |
|  Consumer and other                                         |   |                 | 164 |   |   | - |   |   | 164 |   |   | 22,463 |   |   | 22,627 |   |   | - |
|   Total loans before unearned income                   |   |  $              | 6,653 |   |  $ | 29,251 |   |  $ | 35,904 |   |  $ | 534,285 |   |  $ | 570,189 |   |  $ | 2,025 |
|  Less: unearned income                                      |   |                 |   |   |   |   |   |   |   |   |   |   |   |   | (742 | )  |   |   |
|      Total loans net of unearned income |   |                 |   |   |   |   |   |   |   |   |   |   |   |  $ | 569,447 |   |   |   |

|                                                        |   | As of March 31, 2011 |
|-------------------------------------------------------------|--------|----------------------|
|                                                        |   | (in thousands)       |
| Real estate:                                                |   |                 |   |
|     Construction & land development |   |  $              | 2,588 |
|     Farmland                            |   |                 |  38 |
|     1 - 4 family                   |   |                 | 3,788 |
|      Multifamily                   |   |                 | - |
|     Non-farm non-real estate            |   |                 |  19,231 |
| Total real estate                                           |   |                 | 25,645 |
|                                         |   |                 |   |
| Agricultural                                                |   |                 | 444 |
| Commercial and industrial                                   |   |                 | 1,137 |
| Consumer and other                                          |   |                 |  - |
|  Total                                                 |   |  $              |  27,226 |

----

|                                                             |   | As of March 31, 2011 |    |
|------------------------------------------------------------------|--------|----------------------|---------|
|                                                             |   | (in thousands)       |    |
|  Corporate Credit Exposure -- by Credit Rating              |   | Pass                 |    | Special Mention |   | Substandard |   | Total |   |
|                                                             |   |                 |    |   |   |   |   |   |   |   |   |   |   |
| Real Estate                                                      |   |                 |    |   |   |   |   |   |   |   |   |   |   |
|     Construction & land development      |   | $                    | 61,232  |   | $ | 286 |   | $ | 6,910 |   | $ | 68,428 |   |
|     Farmland                                 |   |                 | 13,237  |   |   |  - |   |   |  129 |   |   | 13,366 |   |
|      1 - 4 family                       |   |                 | 57,628  |   |   | 3,909 |   |   | 8,832 |   |   | 70,369 |   |
|      Multifamily                        |   |                 | 8,605   |   |   | - |   |   | 5,781 |   |   | 14,386 |   |
|      Non-farm non-residential           |   |                 | 254,923 |   |   | 813 |   |   | 35,469 |   |   | 291,205 |   |
|  Total real estate                                          |   |                 | 395,625 |   |   | 5,008 |   |   | 57,121 |   |   | 457,754 |   |
|                                                             |   |                 |    |   |   |   |   |   |   |   |   |   |   |
|  Agricultural                                               |   |                 | 17,002  |   |   | - |   |   |  444 |   |   |  17,446 |   |
|  Consumer and industrial                                    |   |                 | 68,378  |   |   | 47 |   |   |  3,937 |   |   | 72,362 |   |
|  Consumer and other                                         |   |                 | 22,492  |   |   | 53 |   |   | 82 |   |   | 22,627 |   |
|      Total loans before unearned income |   | $                    | 503,497 |   | $ | 5,108 |   | $ | 61,584 |   | $ | 570,189 |   |
|  Less: unearned income                                      |   |                 |    |   |   |   |   |   |   |   |   |  (742 | ) |
|      Total loans net of unearned income |   |                 |    |   |   |   |   |   |   |   | $ |  569,447 |   |

----

|                                                   | Three Months Ended March 31, 2011 |                              |
|--------------------------------------------------------|-----------------------------------|-----------------------------------|
|                                                   | (in thousands)                    |                              |
|                                                   | Real Estate Loans:                |                              | Non-Real Estate Loans: |   |   |   |   |
|                                                   |                              | Construction and Land Development |   | Farmland |   | 1-4 Family |   | Multi-family |   | Non-farm non-residential |   | Agricultural |   | Commercial and Industrial |   | Consumer and other |   | Unallocated |   |   | Total |   |
| Allowance for credit Losses:                           |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Beginning balance                                      |  $                           |  977                         |   | $ |  46 |   | $ |  1,891 |   | $ | 487 |   | $ | 3,423 |   | $ | 80 |   | $ | 510 |   | $ | 390 |   | $ | 513 |   | $ | 8,317 |   |
| Charge-offs                                            |                              |  (417                        | ) |  - |   |  (157 | ) | - |   | (22 | ) | - |   | (1 | ) | (88 | ) |  - |   |   | (685 | ) |
| Recoveries                                             |                              |  -                           |   |  - |   |  6 |   | - |   | 7 |   | - |   | 63 |   | 57 |   |  - |   |   | 133 |   |
| Provision                                              |                              |  (95                         | ) |  (5 | ) |  557 |   | (325 | ) | (287 | ) | 117 |   | 900 |   | (83 | ) |  (315 | ) |   | 464 |   |
| Ending Balance                                         |  $                           |  465                         | $ |  41 | $ |  2,297 | $ | 162 | $ | 3,121 | $ | 197 | $ | 1,472 | $ | 276 | $ | 198 |   | $ | 8,229 |   |
|                                                   |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Allowance at the end of first quarter:                 |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Individually evaluated for impairment                  | $                                 |  197                         | $ |  - | $ |  669 | $ | 156 | $ | 2,467 | $ | - | $ | 451 | $ | - | $ |  - |   | $ | 3,940 |   |
| Collectively evaluated for impairment                  | $                                 |  268                         | $ |  41 | $ |  1,628 | $ | 6 | $ | 654 | $ | 197 | $ | 1,021 | $ | 276 | $ |  198 |   |  $ | 4,289 |   |
|                                                   |                              |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans at end of first quarter (before unearned income) |   $                          |  68,428                      | $ |  13,366 | $ |  70,369 | $ | 14,386 | $ | 291,205 | $ | 17,446 | $ | 72,362 | $ | 22,627 | $ |  - |   |  $ | 570,189 |   |
| Loans individually evaluated for impairment            |                              |  6,607                       | $ |  - | $ |  4,145 | $ | 5,781 | $ | 34,540 | $ | - | $ | 3,731 | $ | - | $ |  - |   |   | 54,804 |   |
| Loans collectively evaluated for impairment            | $                                 | 61,821                            | $ | 13,366 | $ | 66,224 | $ | 8,605 | $ | 256,665 | $ | 17,446 | $ | 68,631 | $ | 22,627 | $ | - |   | $ | 515,385 |   |

----

|                                     |   | March 31, 2011        |   |   | March 31, 2010  |       |
|------------------------------------------|--------|-----------------------|--------|--------|----------------------|------------|
|                                     |   |   (in thousands) |
| Balance at beginning of period           |   | $                     | 8,317  |   | $               | 7,919      |   |
|                                     |   |                  |   |   |                 |       |   |
| Charge-offs:                             |   |                  |   |   |                 |       |   |
|  Real estate loans:                 |   |                  |   |   |                 |       |   |
|   Construction and land development |   |                  | (417   | )      |                 |  (5   | ) |
|   Farmland                          |   |                  | -      |   |                 |  -    |   |
|   1 - 4 family residential          |   |                  | (157   | )      |                 |  (187 | ) |
|   Multifamily                       |   |                  | -      |   |                 |  -    |   |
|   Non-farm non-residential          |   |                  | (22    | )      |                 |  -    |   |
| Commercial and industrial loans          |   |                  | (1     | )      |                 |  (96  | ) |
| Consumer and other                       |   |                  | (88    | )      |                 |  (106 | ) |
|   Total charge-offs                 |   |                  | (685   | )      |                 |  (394 | ) |
|                                     |   |                  |   |   |                 |       |   |
| Recoveries:                              |   |                  |   |   |                 |       |   |
|  Real estate loans:                 |   |                  |   |   |                 |       |   |
|   Construction and land development |   |                  | -      |   |                 | 1          |   |
|   Farmland                          |   |                  | -      |   |                 | -          |   |
|   1 - 4 family residential          |   |                  | 6      |   |                 | -          |   |
|   Multifamily                       |   |                  | -      |   |                 | -          |   |
|   Non-farm non-residential          |   |                  | 7      |   |                 | -          |   |
| Commercial and industrial loans          |   |                  | 63     |   |                 | 33         |   |
| Consumer and other                       |   |                  | 57     |   |                 | 30         |   |
|   Total recoveries                  |   |                  | 133    |   |                 | 64         |   |
|                                     |   |                  |   |   |                 |       |   |
| Net charge-offs                          |   |                  | (552   | )      |                 |  (330 | ) |
| Provision for loan losses                |   |                  | 464    |   |                 | 679        |   |
|                                     |   |                  |   |   |                 |       |   |
| Balance at end of period                 |   | $                     | 8,229  |   | $               | 8,268      |   |

----

|                                                              |   | March 31, 2011       |   | December 31, 2010 |   |
|-------------------------------------------------------------------|--------|----------------------|--------|------------------------|--------|
|                                                              |   |  (in thousands) |   |
| Impaired loans without a valuation allowance                      |   | $                    | 7,314  |                   | $      | 8,713 |   |
| Impaired loans with a valuation allowance                         |   |                 | 47,490 |                   |   | 47,763 |   |
|  Total impaired loans                                        |   | $                    | 54,804 |                   | $      | 56,476 |   |
|                                                              |   |                 |   |                   |   |   |   |
|                                                              |   |                 |   |                   |   |   |   |
| Valuation allowance related to impaired loans                     |   | $                    | 3,940  |                   | $      | 3,537 |   |
| Total nonaccrual loans                                            |   | $                    | 27,226 |                   | $      | 28,718 |   |
| Total loans past due ninety days and still accruing               |   | $                    | 2,025  |                   | $      | 1,673 |   |
|                                                              |   |                 |   |                   |   |   |   |
| Average investment in impaired loans                              |   | $                    | 52,148 |                   | $      | 37,094 |   |
| Interest income recognized on impaired loans                      |   | $                    | 1,044  |                   | $      | 2,402 |   |
| Interest income recognized on a cash basis on impaired loans |   | $                    | 766    |                   | $      | 1,304 |   |

|                                                                          |   |   As of March 31, 2011 |   |
|-------------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                          |   |   (in thousands)            |   |
|                                                                          |   | Recorded Investment                   |   | Unpaid Principal Balance |   | Related Allowance |   | Average Recorded Investment |   | Interest Income Recognized |   |
|  With no related allowance:                                              |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                                                                   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Construction & land development    |   |  $                               | 2,759  |   |  $ | 2,759 |   | $ | - |   |  $ | 4,601 |   |  $ | 72 |   |
|      Farmland                                        |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|      1 - 4 family                                    |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|      Multifamily                                     |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|      Non-farm non-residential                        |   |                                  | 4,555  |   |   | 4,555 |   |   | - |   |   | 4,409 |   |   | 48 |   |
| Total real estate                                                             |   |                                  | 7,314  |   |   | 7,314 |   |   | - |   |   | 9,010 |   |   | 120 |   |
|                                                                          |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Agricultural                                                            |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Commercial and industrial                                                     |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Consumer and other                                                            |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                          |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  With an allowance recorded:                                             |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Real estate                                                                   |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Construction & land development                   |   |                                  | 3,848  |   |   | 4,473 |   |   | 197 |   |   | 4,295 |   |   | 123 |   |
|      Farmland                                        |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|      1 - 4 family                                    |   |                                  | 4,145  |   |   | 4,604 |   |   | 669 |   |   | 4,150 |   |   | 47 |   |
|     Multifamily                                           |   |                                  | 5,781  |   |   | 5,781 |   |   | 156 |   |   | 5,781 |   |   | 85 |   |
|      Non-farm non-residential                        |   |                                  | 29,985 |   |   | 29,985 |   |   | 2,467 |   |   | 25,791 |   |   | 650 |   |
|  Total real estate                                                       |   |                                  | 43,759 |   |   | 44,843 |   |   | 3,489 |   |   | 40,017 |   |   | 905 |   |
|                                                                          |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Agricultural                                                            |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|  Commercial and industrial                                               |   |                                  | 3,731  |   |   | 3,731 |   |   | 451 |   |   | 3,121 |   |   | 19 |   |
|  Consumer and other                                                      |   |                                  | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |
|                                                                          |   |                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Total                                                                   |   |  $                               | 54,804 |   |  $ | 55,888 |   |  $ | 3,940 |   |  $ | 52,148 |   |  $ | 1,044 |   |

----

Item 2.

----

| - Net income for the first quarter of 2011 and 2010 was $2.4 million and $2.6 million respectively.  Net income to common shareholders after preferred stock dividends was $2.1 million and $2.3 million for the first quarter of 2011 and 2010, with earnings per common share of $0.37 and $0.40 respectively. The decrease in net income was primarily the result of compressed margins and a decrease in gains realized on securities when compared year over year.                                                                                                         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| - Net interest income for the first quarter of 2011 and 2010 was $9.5 million and $9.3 million, respectively.  The net interest margin was 3.47% for the first quarter 2011 and 4.15% for the same period in 2010.                                                                                                                                                                                                                                                                                                                                                         |
| - The provision for loan losses for the first quarter of 2011 was $0.5 million compared to $0.7 million for the first quarter of 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| - Total assets at March 31, 2011 were $1.2 billion, an increase of $38.7 million or 3.4% when compared to $1.1 billion at December 31, 2010. The increase in assets from deposit growth was primarily invested in securities.                                                                                                                                                                                                                                                                                                                                                        |
| - Investment securities totaled $517.7 million at March 31, 2011, an increase of $35.7 million when compared to $482.0 million at December 31, 2010. At March 31, 2011, available for sale securities, at fair value, totaled $323.9 million, an increase of $1.8 million when compared to $322.1 million at December 31, 2010. At March 31, 2011, held to maturity securities, at amortized cost, totaled $193.8 million, an increase of $34.0 million when compared to $159.8 million at December 31, 2010.                                                                                  |
| - The net loan portfolio at March 31, 2011 totaled $561.2 million, a net decrease of $6.1 million from the December 31, 2010 net loan portfolio of $567.3 million. Net loans are reduced by the allowance for loan losses which totaled $8.2 million for March 31, 2011 and $8.3 million for December 31, 2010.                                                                                                                                                                                                                                                                 |
| - Non-performing assets at March 31, 2011 were $30.0 million, a decrease of $1.0 million compared to $31.0 million at December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| - Total deposits increased $46.1 million or 4.6% in the first three months of 2011 compared to December 31, 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| - Return on average assets for the three months ended March 31, 2011 and March 31, 2010 was 0.84% and 1.08% respectively. Return on average common shareholders’ equity for the three months ended March 31, 2011 and March 31, 2010 was 12.36% and 13.76% 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 first quarter of 2011 and 2010.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

----

----

|                                                                   |   | March 31, 2011 |   | December 31, 2010 |
|------------------------------------------------------------------------|--------|----------------|--------|-------------------|
|                                                                   |   | (in thousands) |
| Non-accrual loans:                                                     |   |           |   |              |
|  Real estate loans:                                               |   |           |   |              |
|   Construction and land development                               |   | $              | 2,588  |              | $ | 3,383 |
|   Farmland                                                        |   |           | 38     |              |   | - |
|   1 - 4 family residential                                        |   |           | 3,788  |              |   | 1,480 |
|   Multifamily                                                     |   |           | -      |              |   | 1,357 |
|   Non-farm non-residential                                        |   |           | 19,231 |              |   | 21,944 |
|  Non-real estate loans:                                           |   |           |   |              |   |   |
|   Agricultural                                                    |   |           | 444    |              |   | 446 |
|   Commercial and industrial                                       |   |           | 1,137  |              |   | 76 |
|   Consumer and other                                              |   |           | -      |              |   | 32 |
|    Total non-accrual loans                                   |   |           | 27,226 |              |   | 28,718 |
|                                                                   |   |           |   |              |   |   |
|  Loans 90 days and greater delinquent and still accruing:         |   |           |   |              |   |   |
|  Real estate loans:                                               |   |           |   |              |   |   |
|   Construction and land development                               |   |           | -      |              |   | - |
|   Farmland                                                        |   |           | -      |              |   | - |
|   1 - 4 family residential                                        |   |           | 2,025  |              |   | 1,663 |
|   Multifamily                                                     |   |           | -      |              |   | - |
|   Non-farm non-residential                                        |   |           | -      |              |   | - |
|  Non-real estate loans:                                           |   |           |   |              |   |   |
|   Agricultural                                                    |   |           | -      |              |   | - |
|   Commercial and industrial                                       |   |           | -      |              |   | - |
|   Consumer and other                                              |   |           | -      |              |   | 10 |
|    Total loans 90 days greater delinquent and still accruing |   |           | 2,025  |              |   | 1,673 |
|                                                                   |   |           |   |              |   |   |
| Total non-performing loans                                             |   |           | 29,251 |              |   | 30,391 |
|                                                                   |   |           |   |              |   |   |
| Real estate owned:                                                     |   |           |   |              |   |   |
|  Construction and land development                                |   |           | 207    |              |   | 231 |
|  Farmland                                                         |   |           | -      |              |   | - |
|  1 - 4 family residential                                         |   |           | 445    |              |   | 232 |
|  Multifamily                                                      |   |           | -      |              |   | - |
|  Non-farm non-residential                                         |   |           | -      |              |   | 114 |
| Non-real estate loans:                                                 |   |           |   |              |   |   |
|  Agricultural                                                     |   |           | -      |              |   | - |
|  Commercial and industrial                                        |   |           | 114    |              |   | - |
|  Consumer and other                                               |   |           | -      |              |   | - |
|   Total real estate owned                                         |   |           | 766    |              |   | 577 |
|                                                                   |   |           |   |              |   |   |
| Total nonperforming assets                                             |   | $              | 30,017 |              | $ | 30,968 |
|                                                                   |   |           |   |              |   |   |
| Restructured Loans                                                     |   | $              | 15,161 |              | $ | 9,535 |

----

----

| ·   | 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 of the loan portfolio by federal and state regulatory agencies and examinations; |
|--------------------|-----------------------------------------------------------------------------------------------|

| ·   | and review by our internal loan review department and independent accountants. |
|--------------------|--------------------------------------------------------------------------------|

----

|                               |    |  March 31, 2011 |   |    | March 31, 2010 |    |
|------------------------------------|---------|----------------------|--------|---------|----------------|---------|
|                               |    |  (in thousands) |   |
|  Loans:                       |    |                 |   |    |           |    |
|  Average outstanding balance  |  $ | 568,859              |   |  $ | 591,858        |    |
|  Balance at end of period     |  $ | 569,447              |   |  $ | 602,637        |    |
|                               |    |                 |   |    |           |    |
|  Allowance for Loan Losses:   |    |                 |   |    |           |    |
|  Balance at beginning of year |  $ | 8,317                |   |  $ | 7,919          |    |
|  Provision charged to expense |    | 464                  |   |    | 679            |    |
|  Loans charged-off            |    | (685                 | )      |    | (394           | )  |
|  Recoveries                   |    | 133                  |   |    | 64             |    |
|  Balance at end of period     |  $ | 8,229                |   |  $ | 8,268          |    |

|                       |   |   March 31, 2011 |      |   December 31, 2010  |   | Increase/(Decrease) |    |
|----------------------------|--------|----------------------------|-----------|--------------------------------|--------|---------------------|---------|
|                       |   |  (in thousands)       |      |  Amount    |   |  Percent       |    |
| Noninterest-bearing demand |   | $                          | 142,674   |                           | $      | 130,897             |  $ | 11,777 |   | 9.0 | % |
| Interest-bearing demand    |   |                       | 193,628   |                           |   | 192,139             |    | 1,489 |   | 0.8 | % |
| Savings                    |   |                       | 49,395    |                           |   | 46,663              |    |  2,732 |   | 5.9 | % |
| Time                       |   |                       | 667,815   |                           |   | 637,684             |    |  30,131 |   | 4.7 | % |
|   Total deposits |   | $                          | 1,053,512 |                           | $      | 1,007,383           |  $ |  46,129 |   | 4.6 | % |

----

----

|                                                            |   | March 31, 2011         |    | March 31, 2010                 |
|-----------------------------------------------------------------|--------|------------------------|---------|--------------------------------|
|                                                            |   | Average Balance        |    | Interest                       | Yield/Rate |   | Average Balance |   | Interest | Yield/Rate |
|                                                            |   | (dollars in thousands) |
| Assets                                                          |   |                   |    |                           |   |   |   |   |   |   |
| Interest-earning assets:                                        |   |                   |    |                           |   |   |   |   |   |   |
|   Interest-earning deposits with banks (1)                 | $      | 25,671                 | $  | 10                             | 0.15% |   $ | 16,771 | $  | 9 | 0.22% |
|   Securities (including FHLB stock)                   |   | 502,616                |    | 4,762                          | 3.84% |   | 290,345 |   | 3,419 | 4.78% |
|   Federal funds sold                                  |   | 17,766                 |    | 5                              | 0.13% |   | 6,836 |   | 2 | 0.12% |
|   Loans, net of unearned income                       |   | 564,541                |    | 8,462                          | 6.08% |   | 591,858 |   | 8,805 | 6.03% |
|     Total interest-earning assets                | $      | 1,110,594              | $  | 13,239                         | 4.83% | $ | 905,810 | $  | 12,235 | 5.48% |
|                                                            |   |                   |    |                           |   |   |   |   |   |   |
|  Noninterest-earning assets:                               |   |                   |    |                           |   |   |   |   |   |   |
|   Cash and due from banks                                  | $      | 10,891                 |    |                           |   | $ | 18,474 |   |   |   |
|   Premises and equipment, net                         |   | 16,237                 |    |                           |   |   | 17,170 |   |   |   |
|   Other assets                                        |   | 19,576                 |    |                           |   |   | 9,403 |   |   |   |
|     Total                                   | $      | 1,157,298              |    |                           |   | $ | 950,857 |   |   |   |
|                                                            |   |                   |    |                           |   |   |   |   |   |   |
|  Liabilities and Stockholders' Equity                      |   |                   |    |                           |   |   |   |   |   |   |
|  Interest-bearing liabilities:                             |   |                   |    |                           |   |   |   |   |   |   |
|   Demand deposits                                          | $      | 204,349                | $  | 227                            | 0.45% | $ | 206,173 | $  | 201 | 0.40% |
|   Savings deposits                                    |   | 48,303                 |    | 11                             | 0.09% |   | 40,983 |   | 10 | 0.10% |
|   Time deposits                                       |   | 652,754                |    | 3,506                          | 2.18% |   | 446,758 |   | 2,718 | 2.47% |
|   Borrowings                                          |   | 12,582                 |    | 6                              | 0.19% |   | 36,707 |   | 41 | 0.45% |
|     Total interest-bearing liabilities           | $      | 917,988                | $  | 3,750                          | 1.66% | $ | 730,621 | $  | 2,970 | 1.65% |
|                                                            |   |                   |    |                           |   |   |   |   |   |   |
|  Noninterest-bearing liabilities:                          |   |                   |    |                           |   |   |   |   |   |   |
|   Demand deposits                                          | $      | 135,221                |    |                           |   | $ | 118,449 |   |   |   |
|   Other                                               |   | 5,553                  |    |                           |   |   | 4,917 |   |   |   |
|     Total liabilities                            | $      | 1,058,762              |    |                           |   | $ | 853,987 |   |   |   |
|   Stockholders' equity                                |   | 98,536                 |    |                           |   |   | 96,870 |   |   |   |
|     Total                                        | $      | 1,157,298              |    |                           |   | $ | 950,857 |   |   |   |
| Net interest income                                             |   |                   |  $ |      9,489 |   |   |   |  $ |     9,265 |   |
| Net interest rate spread (2)                                    |   |                   |    |                           | 3.18% |   |   |   |   | 3.83% |
| Net interest-earning assets (3)                                 | $      | 192,606                |    |                           |   | $ | 175,189 |   |   |   |
| Net interest margin (4)                                         |   |                   |    |                           | 3.47% |   |   |   |   | 4.15% |
|                                                            |   |                   |    |                           |   |   |   |   |   |   |
| Average interest-earning assets to interest-bearing liabilities |   |                   |    |                           |   120.98% |   |   |   |   | 123.98% |

|   | (1) Interest-earning deposits with banks include reserves kept with the Federal Reserve Bank that are classified on the balance sheet as "cash and due from banks".  The reserves are not classified as interest-earning demand deposits on the balance sheet because interest is only paid on amounts in excess of minimum reserve requirements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) Net interest rate spread represents the difference between the yield on average interest-earning assets and the cost of average interest-bearing liabilities. |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) Net interest-earning assets represents total interest-earning assets less total interest-bearing liabilities. |
|--------|-------------------------------------------------------------------------------------------------------------------|

|   | (4) Net interest margin represents net interest income divided by average total interest-earning assets. |
|--------|----------------------------------------------------------------------------------------------------------|

----

| The following is a summary of the significant components of other noninterest expense: |   | As of March 31, 2011 |   | As of March 31, 2010 |
|----------------------------------------------------------------------------------------|--------|----------------------|--------|----------------------|
|                                                                                   |   |  (in thousands) |
| Other noninterest expense:                                                             |   |                 |   |                 |
|  Legal and professional fees                                                      |   | $                    | 370    |                 | $ | 312 |
|  Data processing                                                                  |   |                 | 564    |                 |   | 523 |
|  Marketing and public relations                                                   |   |                 | 325    |                 |   | 285 |
|  Taxes - sales, capital, and franchise                                            |   |                 | 176    |                 |   | 181 |
|  Operating supplies                                                               |   |                 | 133    |                 |   | 140 |
|  Travel and lodging                                                               |   |                 | 28     |                 |   | 87 |
|  Net costs from other real estate and repossessions                               |   |                 | 84     |                 |   | 64 |
|  Regulatory assessment                                                            |   |                 | 473    |                 |   | 356 |
|  Other                                                                            |   |                 | 633    |                 |   | 658 |
|   Total other expense                                                        |   | $                    | 2,786  |                 | $ | 2,606 |

----

Item 3. 

|                                                     |   |  March 31, 2011        |
|----------------------------------------------------------|--------|-----------------------------|
|                                                     |   | Interest Sensitivity Within |
|                                                     |   | 3 Months                    |   | Over 3 Months |   | Total |   | Over |   |   |
|                                                     |   | Or Less                     |   | thru 12 Months |   | One Year |   | One Year |   | Total |
|                                                     |   | (in thousands)              |
| Earning Assets:                                          |   |                        |   |   |   |   |   |   |   |   |
|   Loans (including loans held for sale)        |   | $                           | 178,601 |   | $ | 49,319 |   | $ | 227,920 |   | $ | 341,695 |   | $ | 569,615 |
|   Securities (including FHLB stock)            |   |                        | 3,054 |   |   | 6,841 |   |   | 9,895 |   |   | 508,579 |   |   | 518,474 |
|   Federal Funds Sold                           |   |                        | 20,355 |   |   | - |   |   | 20,355 |   |   | - |   |   | 20,355 |
|   Other earning assets                         |   |                        | 14 |   |   | - |   |   | 14 |   |   | - |   |   | 14 |
|     Total earning assets             |   | $                           | 202,024 |   | $ | 56,160 |   | $ | 258,184 |   | $ | 850,274 |   | $ | 1,108,458 |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Source of Funds:                                         |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing accounts:                               |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Demand deposits                  |   | $                           | 146,887 |   | $ | - |   | $ | 146,887 |   | $ | 46,741 |   | $ | 193,628 |
|     Savings deposits                 |   |                        | 12,349 |   |   | - |   |   | 12,349 |   |   | 37,046 |   |   | 49,395 |
|     Time deposits                    |   |                        | 143,174 |   |   | 191,793 |   |   | 334,967 |   |   | 332,848 |   |   | 667,815 |
|     Short-term borrowings            |   |                        | 13,408 |   |   | - |   |   | 13,408 |   |   | - |   |   | 13,408 |
|     Long-term borrowings             |   |                        | - |   |   | - |   |   | - |   |   | - |   |   | - |
| Noninterest-bearing, net                                 |   |                        | - |   |   |  - |   |   | - |   |   | 184,212 |   |   | 184,212 |
|     Total source of funds            |   | $                           | 315,818 |   | $ | 191,793 |   | $ | 507,611 |   | $ | 600,847 |   | $ | 1,108,458 |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Period gap                                               |   | $                           | (113,794 | ) | $ | (135,633 | ) | $ | (249,427 | ) | $ | 249,427 |   |   |   |
| Cumulative gap                                           |   | $                           | (113,794 | ) | $ | (249,427 | ) | $ | (249,427 | ) | $ | - |   |   |   |
|                                                     |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Cumulative gap as a percent of earning assets |   |                        | -10.27 | % |   | -22.50 | % |   | -22.50 | % |   |   |   |   |   |

----

----

Item 4T. 

| 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:  May 16, 2011               |   | By: /s/ Alton B. Lewis |
|                                               |   | Alton B. Lewis |
|                                               |   | Chief Executive Officer |
|                                               |   |   |
|                                               |   |   |
|   Date:  May 16, 2011               |   | By: /s/ Eric J. Dosch |
|                                               |   | Eric J. Dosch |
|                                               |   | Chief Financial Officer |
|                                               |   | Secretary and Treasurer |