----

----

**Form      10-Q**

**For      the Quarter Ended September 30, 2007**

**Commission      File Number 000-52748**

**FIRST      GUARANTY BANCSHARES, INC.**

| **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)             |

**(985)      345-7685**

**X**
** **

----

**PART      I.  FINANCIAL INFORMATION**

**Item      1.  Consolidated Financial Statements**

| **FIRST                  GUARANTY BANCSHARES, INC. AND SUBSIDIARY**                     |
|-----------------------------------------------------------------------------------------|
| **CONSOLIDATED                  BALANCE SHEETS**                                        |
| (dollars                  in thousands, except share data)                              |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |
|                                                                                    |   | **September                  30,** |   | **December                  31,** |
|                                                                                    |   | **2007** |   |   | **2006** |   |
| **Assets**                                                                              |   | (unaudited) |
| Cash                  and cash equivalents:                                             |
|   Cash                  and due from banks                                    |   | $ | 19,130 |   |   | $ | 17,893 |   |
|   Interest-earning                  demand deposits with banks                |   |   | 117 |   |   |   | 131 |   |
|   Federal                  funds sold                                         |   |   | 3,292 |   |   |   | 6,793 |   |
|     Cash                  and cash equivalents                      |   |   | 22,539 |   |   |   | 24,817 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Interest-earning                  time deposits with banks                              |   |   | 2,188 |   |   |   | 2,188 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Investment                  securities:                                                 |   |   |   |   |
|  Available                  for sale, at fair value                                |   |   | 101,858 |   |   |   | 111,353 |   |
| Held                  to maturity, at cost (estimated fair value of                     |
|    $45,519                  and $45,614, respectively)                   |   |   | 46,597 |   |   |   | 46,999 |   |
|     Investment                  securities                          |   |   | 148,455 |   |   |   | 158,352 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Federal                  Home Loan Bank stock, at cost                                  |   |   | 2,700 |   |   |   | 2,264 |   |
| Loans                  held for sale                                                    |   |   | 35,648 |   |   |   | 1,049 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Loans,                  net of unearned income                                          |   |   | 587,478 |   |   |   | 507,195 |   |
| Less:                  allowance for loan losses                                        |   |   | 6,878 |   |   |   | 6,675 |   |
|   Net                  loans                                                  |   |   | 580,600 |   |   |   | 500,520 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Intangible                  assets, net                                                 |   |   | 4,786 |   |   |   | 456 |   |
| Premises                  and equipment, net                                            |   |   | 15,965 |   |   |   | 13,593 |   |
| Other                  real estate, net                                                 |   |   | 220 |   |   |   | 2,540 |   |
| Accrued                  interest receivable                                            |   |   | 6,510 |   |   |   | 5,378 |   |
| Other                  assets                                                           |   |   | 2,633 |   |   |   | 3,330 |   |
| **  Total                  Assets**                                           |   | $ | 822,244 |   |   | $ | 714,487 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| **Liabilities                  and Stockholders' Equity**                               |
| Deposits:                                                                               |   |   |   |   |   |   |   |   |
|   Noninterest-bearing                  demand                                 |   | $ | 121,152 |   |   | $ | 122,540 |   |
|   Interest-bearing                  demand                                    |   |   | 203,719 |   |   |   | 185,308 |   |
|   Savings                                                                     |   |   | 45,425 |   |   |   | 41,161 |   |
|   Time                                                                        |   |   | 333,609 |   |   |   | 277,284 |   |
|     Total                  deposits                                 |   |   | 703,905 |   |   |   | 626,293 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| Short-term                  borrowings                                                  |   |   | 45,766 |   |   |   | 6,584 |   |
| Accrued                  interest payable                                               |   |   | 3,189 |   |   |   | 3,070 |   |
| Long-term                  borrowings                                                   |   |   | 3,104 |   |   |   | 17,984 |   |
| Other                  liabilities                                                      |   |   | 1,258 |   |   |   | 1,353 |   |
| **  Total                  Liabilities**                                      |   |   | 757,222 |   |   |   | 655,284 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| **Stockholders'                  Equity**                                               |   |   |   |   |   |
| Common                  stock:                                                          |   |   |   |   |   |   |   |   |
| $1                  par value - authorized 100,000,000 shares; issued and               |
|     outstanding                  5,559,644 shares                   |   |   | 5,560 |   |   |   | 5,560 |   |
| Surplus                                                                                 |   |   | 26,459 |   |   |   | 26,459 |   |
| Retained                  earnings                                                      |   |   | 33,512 |   |   |   | 28,089 |   |
| Accumulated                  other comprehensive loss                                   |   |   | (509 | ) |   |   | (905 | ) |
| **  Total                  Stockholders' Equity**                             |   |   | 65,022 |   |   |   | 59,203 |   |
| **    Total                  Liabilities and Stockholders' Equity** |   | $ | 822,244 |   |   | $ | 714,487 |   |
|                                                                                    |   |   |   |   |   |   |   |   |
|                                                                                    |   |   |   |   |   |   |   |   |
| *See                  Notes to Financial                  Statements.*                  |

----

| **FIRST                  GUARANTY BANCSHARES, INC. AND SUBSIDIARY**              |   |
|----------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                  STATEMENTS OF INCOME (unaudited)**               |   |
| (dollars                  in thousands, except per share data)                   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   | **Three                  Months** |   |   | **Nine                  Months** |   |
|                                                                             |   | **Ended                  September 30,** |   |   | **Ended                  September 30,** |   |
|                                                                             |   | **2007** |   |   | **2006** |   |   | **2007** |   |   | **2006** |   |
| **Interest                  Income:**                                            |   |   |   |   |   |   |   |   |   |   |   |   |
|   Loans                  (including fees)                              |   | $ | 12,459 |   |   | $ | 10,906 |   |   | $ | 34,115 |   |   | $ | 30,130 |   |
|   Loans                  held for sale                                 |   |   | 196 |   |   |   | 7 |   |   |   | 267 |   |   |   | 16 |   |
|   Deposits                  with other banks                           |   |   | 16 |   |   |   | 25 |   |   |   | 62 |   |   |   | 70 |   |
|   Securities                  (including FHLB stock)                   |   |   | 2,092 |   |   |   | 2,511 |   |   |   | 6,565 |   |   |   | 7,356 |   |
|   Federal                  funds sold                                  |   |   | 25 |   |   |   | 13 |   |   |   | 273 |   |   |   | 46 |   |
| **    Total                  Interest Income**               |   |   | 14,788 |   |   |   | 13,462 |   |   |   | 41,282 |   |   |   | 37,618 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Interest                  Expense:**                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Demand                  deposits                                     |   |   | 1,580 |   |   |   | 1,583 |   |   |   | 4,865 |   |   |   | 4,086 |   |
|   Savings                  deposits                                    |   |   | 66 |   |   |   | 46 |   |   |   | 171 |   |   |   | 119 |   |
|   Time                  deposits                                       |   |   | 3,538 |   |   |   | 2,816 |   |   |   | 9,758 |   |   |   | 8,056 |   |
|   Borrowings                                                           |   |   | 495 |   |   |   | 718 |   |   |   | 970 |   |   |   | 1,675 |   |
| **    Total                  Interest Expense**              |   |   | 5,679 |   |   |   | 5,163 |   |   |   | 15,764 |   |   |   | 13,936 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  Interest Income**                                         |   |   | 9,109 |   |   |   | 8,299 |   |   |   | 25,518 |   |   |   | 23,682 |   |
| Provision                  for loan losses                                       |   |   | 71 |   |   |   | 1,030 |   |   |   | 679 |   |   |   | 3,619 |   |
| **Net                  Interest Income after Provision for Loan Losses**         |   |   | 9,038 |   |   |   | 7,269 |   |   |   | 24,839 |   |   |   | 20,063 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Noninterest                  Income:**                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Service                  charges, commissions and fees               |   |   | 962 |   |   |   | 924 |   |   |   | 2,797 |   |   |   | 2,658 |   |
|   Net                  losses on sale of securities                    |   |   | (180 | ) |   |   | (170 | ) |   |   | (408 | ) |   |   | (170 | ) |
|   Net                  gains on sale of loans                          |   |   | 32 |   |   |   | 19 |   |   |   | 108 |   |   |   | 41 |   |
|   Other                                                                |   |   | 256 |   |   |   | 212 |   |   |   | 808 |   |   |   | 717 |   |
| **    Total                  Noninterest Income**            |   |   | 1,070 |   |   |   | 985 |   |   |   | 3,305 |   |   |   | 3,246 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Noninterest                  Expense:**                                        |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Salaries                  and employee benefits                      |   |   | 2,483 |   |   |   | 1,976 |   |   |   | 7,073 |   |   |   | 5,838 |   |
|   Occupancy                  and equipment expense                     |   |   | 672 |   |   |   | 558 |   |   |   | 1,907 |   |   |   | 1,741 |   |
|   Net                  cost from other real estate & repossessions |   |   | 175 |   |   |   | 569 |   |   |   | 599 |   |   |   | 193 |   |
|   Other                                                                |   |   | 2,369 |   |   |   | 2,104 |   |   |   | 6,201 |   |   |   | 6,068 |   |
| **    Total                  Noninterest Expense**           |   |   | 5,699 |   |   |   | 5,207 |   |   |   | 15,780 |   |   |   | 13,840 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Income                  Before Income Taxes**                                  |   |   | 4,408 |   |   |   | 3,047 |   |   |   | 12,364 |   |   |   | 9,469 |   |
| Provision                  for income taxes                                      |   |   | 1,589 |   |   |   | 1,043 |   |   |   | 4,329 |   |   |   | 3,241 |   |
| **Net                  Income**                                                  |   | $ | 2,819 |   |   | $ | 2,004 |   |   | $ | 8,035 |   |   | $ | 6,228 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Per                  Common Share:**                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   Earnings                                                             |   | $ | 0.51 |   |   | $ | 0.36 |   |   | $ | 1.45 |   |   | $ | 1.12 |   |
|   Cash                  dividends paid                                 |   | $ | 0.16 |   |   | $ | 0.15 |   |   | $ | 0.47 |   |   | $ | 0.45 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Weighted                  Average Common Shares Outstanding**                  |   |   | 5,559,644 |   |   |   | 5,559,644 |   |   |   | 5,559,644 |   |   |   | 5,559,644 |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *See                  Notes to Financial Statements*                             |   |   |   |   |   |

----

| **FIRST                  GUARANTY BANCSHARES, INC. AND SUBSIDIARY**                                                                                                                                                                                                      |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| **CONSOLIDATED                  STATEMENTS OF SHAREHOLDERS' EQUITY (unaudited)**                                                                                                                                                                                         |
| (dollars                  in thousands, except per share data)                                                                                                                                                                                                           |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   | **Accumulated** |   |   |   |   |
|                                                                                                                                                                                                                                                                     |   | **Common** |   |   | **Common** |   |   |   |   |   |   |   |   | **Other** |   |   |   |   |
|                                                                                                                                                                                                                                                                     |   | **Stock** |   |   | **Stock** |   |   |   |   |   | **Retained** |   |   | **Comprehensive** |   |   |   |   |
|                                                                                                                                                                                                                                                                     |   | **$1                  Par** |   |   | **$5                  Par** |   |   | **Surplus** |   |   | **Earnings** |   |   | **Income/(Loss)** |   |   | **Total** |   |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  December 31, 2005**                                                                                                                                                                                                                           |   | $ | 5,076 |   |   | $ | 2,416 |   |   | $ | 24,527 |   |   | $ | 22,622 |   |   | $ | (718 | ) |   | $ | 53,923 |   |
| Net                  income                                                                                                                                                                                                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 6,228 |   |   |   | - |   |   |   | 6,228 |   |
| Reclassification                  of $5 par value into $1 par value                  (1)                                                                                                                                                                                 |   |   | 484 |   |   |   | (2,416 | ) |   |   | 1,932 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Change                  in unrealized loss                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   on                  available for sale securities,                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   net                  of reclassification adjustments and taxes                                                                                                                                                                                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (84 | ) |   |   | (84 | ) |
| Comprehensive                  income                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 6,144 |   |
| Cash                  dividends on common stock ($0.45 per share)                                                                                                                                                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,501 | ) |   |   | - |   |   |   | (2,501 | ) |
| **Balance                  September 30, 2006**                                                                                                                                                                                                                          |   | $ | 5,560 |   |   | $ | - |   |   | $ | 26,459 |   |   | $ | 26,349 |   |   | $ | (802 | ) |   | $ | 57,566 |   |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Balance                  December 31, 2006**                                                                                                                                                                                                                           |   | $ | 5,560 |   |   | $ | - |   |   | $ | 26,459 |   |   | $ | 28,089 |   |   | $ | (905 | ) |   | $ | 59,203 |   |
| Net                  income                                                                                                                                                                                                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 8,035 |   |   |   | - |   |   |   | 8,035 |   |
| Change                  in unrealized loss                                                                                                                                                                                                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   on                  available for sale securities,                                                                                                                                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|   net                  of reclassification adjustments and taxes                                                                                                                                                                                               |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 396 |   |   |   | 396 |   |
| Comprehensive                  income                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 8,431 |   |
| Cash                  dividends on common stock ($0.47 per share)                                                                                                                                                                                                        |   |   | - |   |   |   | - |   |   |   | - |   |   |   | (2,612 | ) |   |   | - |   |   |   | (2,612 | ) |
| **Balance                  September 30, 2007**                                                                                                                                                                                                                          |   | $ | 5,560 |   |   | $ | - |   |   | $ | 26,459 |   |   | $ | 33,512 |   |   | $ | (509 | ) |   | $ | 65,022 |   |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *(1)To                  effect a                  reclassification combining the $5 par value common stock with the                  $1 par                  value common stock, approved by the Bank's shareholders on May                  18,                  2006.* |   |
|                                                                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| *See                  Notes to Financial Statements*                                                                                                                                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| **FIRST                  GUARANTY BANCSHARES, INC. AND SUBSIDIARY**                                 |   |
|-----------------------------------------------------------------------------------------------------|--------|
| **CONSOLIDATED                  STATEMENTS OF CASH FLOWS (unaudited)**                              |   |
| (dollars                  in thousands)                                                             |   |
|                                                                                                |   |   |   |   |   |   |
|                                                                                                |   | **Nine                  Months Ended September 30,** |   |
|                                                                                                |   | **2007** |   |   | **2006** |   |
| **Cash                  Flows From Operating Activities**                                           |   |   |   |   |   |   |
| Net                  income                                                                         |   | $ | 8,035 |   |   | $ | 6,228 |   |
| Adjustments                  to reconcile net income to net cash                                    |   |   |   |   |   |   |   |   |
|   provided                  by operating activities:                                      |   |   |   |   |   |   |   |   |
|     Provision                  for loan losses                                  |   |   | 679 |   |   |   | 3,619 |   |
|     Depreciation                  and amortization                              |   |   | 150 |   |   |   | 1,215 |   |
|     Loss                  on sale of securities                                 |   |   | 408 |   |   |   | 170 |   |
|     Gain                  on sale of assets                                     |   |   | (108 | ) |   |   | (29 | ) |
|     ORE                  writedowns and loss (gain) on disposition              |   |   | 410 |   |   |   | (147 | ) |
|     FHLB                  stock dividends                                       |   |   | (98 | ) |   |   | (89 | ) |
|     Net                  increase in loans held for sale                        |   |   | (599 | ) |   |   | (1,115 | ) |
|     Change                  in other assets and liabilities, net                |   |   | (1,086 | ) |   |   | (1,555 | ) |
| **Net                  Cash Provided By Operating Activities**                                      |   |   | 7,791 |   |   |   | 8,297 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| **Cash                  Flows From Investing Activities**                                           |   |   |   |   |   |   |   |   |
| Proceeds                  from maturities and calls of HTM securities                               |   |   | 395 |   |   |   | 472 |   |
| Proceeds                  from maturities, calls and sales of AFS securities                        |   |   | 444,307 |   |   |   | 5,937 |   |
| Funds                  invested in AFS securities                                                   |   |   | (388,855 | ) |   |   | (10,980 | ) |
| Proceeds                  from sale of Federal Home Loan Bank stock                                 |   |   | 1,755 |   |   |   | - |   |
| Funds                  invested in Federal Home Loan Bank stock                                     |   |   | - |   |   |   | (1,673 | ) |
| Net                  increase in loans                                                              |   |   | (41,264 | ) |   |   | (31,304 | ) |
| Purchases                  of premises and equipment                                                |   |   | (592 | ) |   |   | (695 | ) |
| Proceeds                  from sales of other real estate owned                                     |   |   | 2,887 |   |   |   | 3,178 |   |
| Cash                  paid in excess of cash received in acquisition                                |   |   | (10,646 | ) |   |   | - |   |
| **Net                  Cash Provided By (Used In) Investing Activities**                            |   |   | 7,987 |   |   |   | (35,065 | ) |
|                                                                                                |   |   |   |   |   |   |   |   |
| **Cash                  Flows From Financing Activities**                                           |   |   |   |   |   |   |   |   |
| Net                  increase in deposits                                                           |   |   | 10,166 |   |   |   | 6,727 |   |
| Net                  increase in federal funds purchased and short-term                  borrowings |   |   | 39,181 |   |   |   | 4,060 |   |
| Proceeds                  from long-term borrowings                                                 |   |   | - |   |   |   | 30,000 |   |
| Repayment                  of long-term borrowings                                                  |   |   | (64,791 | ) |   |   | (17,739 | ) |
| Dividends                  paid                                                                     |   |   | (2,612 | ) |   |   | (2,501 | ) |
| **Net                  Cash (Used In) Provided By Financing Activities**                            |   |   | (18,056 | ) |   |   | 20,547 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| **Net                  Decrease In Cash and Cash Equivalents**                                      |   |   | (2,278 | ) |   |   | (6,221 | ) |
| **Cash                  and Cash Equivalents at the Beginning of the                  Period**      |   |   | 24,817 |   |   |   | 28,451 |   |
| **Cash                  and Cash Equivalents at the End of the Period**                             |   | $ | 22,539 |   |   | $ | 22,230 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| **Noncash                  Activities:**                                                            |   |   |   |   |   |   |   |   |
|   Loans                  transferred to foreclosed assets                                 |   | $ | 978 |   |   | $ | 7,188 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| **Cash                  Paid During The Period:**                                                   |   |   |   |   |   |   |   |   |
|   Interest                                                                                |   | $ | 15,802 |   |   | $ | 13,047 |   |
|   Income                  taxes                                                           |   | $ | 4,400 |   |   | $ | 5,190 |   |
|                                                                                                |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |
| *See                  Notes to Financial Statements*                                                |   |   |   |   |   |   |   |   |

----

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**(Unaudited)**

**Note      1. Basis of Presentation**

**Note      2. Reorganization**

**Note      3. Acquisition Activity**

|                                                |  (in                  thousands)                                                                 |
|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------|
| Cash                  and cash equivalents          |  $            1,494                  |
| Securities                                          |              45,000                  |
| Loans,                  net                         |              74,473                  |
| Premises                  and equipment, net        |                2,448       |
| Core                  deposit and other intangibles |                4,485       |
| Other                  assets                       |                2,143       |
| Deposits                                            |            (67,446)                            |
| Borrowings                                          |            (49,911)                            |
| Other                  liabilities                  |                 (546) |
|   Total                  purchase price   |  $          12,140                             |
|                                                |                                                                                                  |

----

**., **

**Note      4. Loans and Allowance for Loan Losses**

|                                                                               | **September                  30,**          |   | **December                  31,** |
|------------------------------------------------------------------------------------|---------------------------------------------|--------|-----------------------------------|
|                                                                               | **2007**                                    |   | **2006**                          |
|                                                                               | **Amount**                                  |   | **Percent**                       |   | **Amount** |   | **Percent** |
|                                                                               | (dollars                  in thousands)     |
| **Real                  estate loans:**                                            |                                        |   |                              |   |   |   |   |
|                     Construction and land development                    |  $     97,294 |   | 16.5%                             |   |  $     50,886 |   | 10.0% |
|                     Farmland                                             | 25,840                                      |   | 4.4%                              |   | 25,582 |   | 5.0% |
|                     One to four family residential                       | 79,450                                      |   | 13.5%                             |   | 65,973 |   | 13.0% |
|                     Multifamily                                          | 13,581                                      |   | 2.3%                              |   | 14,702 |   | 2.9% |
|                     Non-farm non-residential                             | 247,189                                     |   | 42.2%                             |   | 256,176 |   | 50.5% |
|                        Total real estate loans            |  $   463,354            |   | 78.8%                             |   |  $   413,319 |   | 81.4% |
|                                                                               |                                        |   |                              |   |   |   |   |
| **Non-real                  estate loans:**                                        |                                        |   |                              |   |   |   |   |
|                     Agricultural                                         |  $     21,390 |   | 3.6%                              |   |  $     16,359 |   | 3.2% |
|                     Commercial and industrial                            | 79,563                                      |   | 13.5%                             |   | 59,072 |   | 11.7% |
|                     Consumer and other                                   | 23,718                                      |   | 4.0%                              |   | 18,880 |   | 3.7% |
|                        Total loans before unearned income | 588,025                                     |   | 100.0%                            |   | 507,630 |   | 100.0% |
|                     Less: unearned income                                | (547)                                       |   |                              |   | (435) |   |   |
|                        Total loans after unearned income  |  $   587,478            |   |                              |   |  $   507,195 |   |   |
|                                                                               |                                        |   |                              |   |   |   |   |

----

|                                                   | **September                  30,** |   | **December                  31,**                                                                                                     |
|--------------------------------------------------------|------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                   | **2007**                           |   | **2006**                                                                                                                              |
|                                                   | (in                  thousands)    |   |                                                                                                                                  |
|                                                   |                               |   |                                                                                                                                  |
| Balance                  beginning of period           | $6,675                             |   | $7,597                                                                                                                                |
| Additional                  provision from acquisition | 325                                |   |                       - |
| Provision                  charged to expense          | 679                                |   | 4,419                                                                                                                                 |
| Loans                  charged off                     | (1,893)                            |   | (5,888)                                                                                                                               |
| Recoveries                                             | 1,092                              |   | 547                                                                                                                                   |
|   Allowance                  for loan losses | $6,878                             |   | $6,675                                                                                                                                |
|                                                   |                               |   |                                                                                                                                  |

**Note      5. Mortgage Loans**

**Note        6. Goodwill and Other Intangible Assets**

*Goodwill and Other Intangible Assets*

**Note      7. Income Taxes**

*Accounting for Uncertainty      in Income Taxes *
*Accounting for Income Taxes*

**Note      8.  Recent Accounting Pronouncements**

*Fair Value Measurements*

----

*The Fair Value Option for      Financial Assets and Financial Liabilities*

*Accounting for Deferred Compensation      and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance      Arrangements*

**Note        9. Subsequent Events**

**., **

----

**Item      2.  Management’s Discussion and Analysis of Financial Condition and Results      of Operations**

*The      following management discussion and analysis is intended to highlight the      significant factors affecting the Company's financial condition and results      of      operations presented in the consolidated financial statements included in this      Form 10-Q. This discussion is designed to provide readers with a more      comprehensive view of the operating results and financial position than would      be      obtained from reading the consolidated financial statements alone. Reference      should be made to those statements for an understanding of the following review      and analysis. The financial data for the nine months ended September 30, 2007      and 2006 have been derived from unaudited consolidated financial statements      and      include, in the opinion of management, all adjustments (consisting of normal      recurring accruals and provisions) necessary to present fairly the Company's      financial position and results of operations for such periods.*

**Third      Quarter Overview**

| ·   | Net                income for the third quarter of 2007 and 2006 was $2.8 million and                $2.0                million with earnings per common share of $0.51 and $0.36, respectively.                Net income was $8.0 million and $6.2 million for the nine month periods                ending September 30, 2007 and 2006, respectively. Earnings per common                share were $1.45 and $1.12 for the nine month periods ending September                30,                2007 and 2006, respectively.  |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Net                interest income for the third quarter of 2007 and 2006 was $9.1 million                and $8.3 million while year-to-date net interest income was $25.5                million                and $23.7 million, respectively. The net interest margin increased                to 4.8%                for the nine month period ended September 30, 2007 compared to 4.6%                for                the same period ended September 30, 2006.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The                provision for loan losses for the third quarter of 2007 was $71,000                compared to $1.0 million for the third quarter of 2006. The provision                for                loan losses was $679,000 for the nine month period ending September                30,                2007 compared to $3.6 million for the same period in 2006. The decrease                in                the provision is primarily attributable to additional reserves in                2006 for                home mortgage loans that involved some irregularities. See Note 3                for                additional information. Other decreases were the result of an insurance                settlement in which the Company recorded $731,000 in real estate                loan                recoveries in the third quarter. This transaction resulted in a reversal                of the provision totaling $300,000. See Note 4 for additional                information.  |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Noninterest                income for the third quarter of 2007 was $1.1 million, up $85,000                when                compared to the third quarter of 2006. Noninterest income was $3.3                million                and $3.2 million for the nine month periods ending September 30,                2007 and                2006, respectively.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Noninterest                expense for the third quarter of 2007 was $5.7 million, up $492,000                when                compared to the third quarter of 2006. Included are increases of                $507,000                in salaries and employee benefits, $113,000 in occupancy and equipment                expense, and $266,000 in other noninterest expense. These increases                in                noninterest expense were offset by the reduction in the net cost                of other                real estate and repossessions totaling $394,000. For the first nine                months                of 2007, noninterest expense totaled $15.8 million, compared                to $13.8 million from the same nine month period ended in                2006.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Total                assets at September 30, 2007 were $822.2 million, up $107.8 million                from                $714.5 million at December 31, 2006.  Assets acquired from the                Homestead Bank merger totaled approximately $130.0 million. The Company                then sold securities and paid borrowings, reducing net assets acquired                from the merger to $85.0. See Note 3 for additional                information.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Loans,                net of unearned income at September 30, 2007 were $587.5 million,                up 15.8%                or $80.3 million from $507.2 million at December 31, 2006. Approximately                $74.8 million in loans was acquired as a result of the Homestead                Bank                merger.  |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Other                real estate decreased $2.3 million from December 31, 2006 to September                30,                2007 primarily due to the foreclosure and sale of properties in 2006                relating to the home mortgage loans discussed in Note 5.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Total                deposits were $703.9 million at September 30, 2007, up 12.4% or $77.6                million from December 31, 2006. Approximately $67.9 million in deposits                were acquired as a result of the Homestead Bank merger.  |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Return                on average assets for the nine month periods ended September 30,                2007 and                2006 were 1.43% and 1.15%, respectively and return on average equity                for                the same periods were 17.34% and 14.93%.  |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | In                September 2007, the Company’s Board of Directors declared a quarterly                dividend of $0.16 per common share, a 6.7% increase compared to the                same                quarter of 2006. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Financial      Condition**

***Changes      in Financial Condition from December 31, 2006 to September 30,      2007***

***Genera***
***l***
**.**

----

***Investment      Securities.  ***

***Mortgage      Loans Held for***
***Sale***
**.**

***Loans.***

***Nonperforming      Assets***
**. **

----

|                                                                                                     | **September                  30,**                                                                                                          |   | **December                  31,**                                                                                                     |
|----------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                     | **2007**                                                                                                                                    |   | **2006**                                                                                                                              |
|                                                                                                     | **Amount**                                                                                                                                  |   | **Amount**                                                                                                                            |
|                                                                                                     | (in                  thousands)                                                                                                             |
| **Nonaccraul                  loans:**                                                                   |                                                                                                                                        |   |                                                                                                                                  |
| ** Real                  estate loans:**                                                            |                                                                                                                                        |   |                                                                                                                                  |
|                     Construction and land development                                          | $1,012                                                                                                                                      |   | $2,676                                                                                                                                |
|                     Farmland                                                                   | 565                                                                                                                                         |   | 33                                                                                                                                    |
|                     One to four family residential                                             | 2,002                                                                                                                                       |   | 3,202                                                                                                                                 |
|                     Multifamily                                                                | 2                                                                                                                                           |   |                       - |
|                     Non-farm non-residential                                                   | 5,837                                                                                                                                       |   | 3,882                                                                                                                                 |
|                        Total nonaccrual real estate loans                       |                 9,418                                       |   |               9,793                                             |
| ** Non-real                  estate loans:**                                                        |                                                                                                                                        |   |                                                                                                                                  |
|                     Agricultural                                                               |                        5 |   |                       - |
|                     Commercial and industrial                                                  | 953                                                                                                                                         |   | 267                                                                                                                                   |
|                     Consumer and other                                                         | 266                                                                                                                                         |   | 302                                                                                                                                   |
|                        Total nonaccrual loans                                   | $10,642                                                                                                                                     |   | $10,362                                                                                                                               |
|                                                                                                     |                                                                                                                                        |   |                                                                                                                                  |
|                                                                                                     |                                                                                                                                        |   |                                                                                                                                  |
| **Past                  due 90 days or more and still accruing:**                                        |                                                                                                                                        |   |                                                                                                                                  |
| ** Real                  estate loans:**                                                            |                                                                                                                                        |   |                                                                                                                                  |
|                     One to four family residential                                             | $696                                                                                                                                        |   | $324                                                                                                                                  |
| ** Non-real                  estate loans:**                                                        |                                                                                                                                        |   |                                                                                                                                  |
|                     Consumer and other                                                         | 2                                                                                                                                           |   |                       - |
|                        Total loans past due 90 days or more and still accruing: | $698                                                                                                                                        |   | $324                                                                                                                                  |
|                                                                                                     |                                                                                                                                        |   |                                                                                                                                  |
| **Other                  real estate**                                                                   | $220                                                                                                                                        |   | $2,540                                                                                                                                |
| **Restructed                  loans**                                                                    |                        - |   |                    51                  |
| **     Total                  nonperforming assets**                            | $11,560                                                                                                                                     |   | $13,277                                                                                                                               |
|                                                                                                     |                                                                                                                                        |   |                                                                                                                                  |

***    Allowance      for      Loan Losses***
***.***

----

|                                                      | **September                  30,**         |
|-----------------------------------------------------------|--------------------------------------------|
|                                                      | **2007**                                   |   | **2006** |
|                                                      | (unaudited,                  in thousands) |
| **Loans:**                                                |                                       |   |   |
|   Average                  outstanding balance  | $535,181                                   |   | $504,130 |
|   Balance                  at end of period     | $587,478                                   |   | $511,015 |
|                                                      |                                       |   |   |
| **Allowance                  for Loan Losses:**           |                                       |   |   |
|   Balance                  at beginning of year | $6,675                                     |   | $7,597 |
|   Provision                  charged to expense | 679                                        |   | 3,619 |
|   Provision                  from acquisition   | 325                                        |   |                   - |
|   Loans                  charged off            | (1,893)                                    |   | (5,162) |
|   Recoveries                                    | 1,092                                      |   | 479 |
|   Balance                  at end of period     | $6,878                                     |   | $6,533 |
|                                                      |                                       |   |   |

***Deposits.  ***

----

|                                                    | **September                  30,**                                                               |   | **December                  31,** |   | **Increase/(Decrease)**                                                                    |
|---------------------------------------------------------|--------------------------------------------------------------------------------------------------|--------|-----------------------------------|--------|--------------------------------------------------------------------------------------------|
|                                                    | **2006**                                                                                         |   | **2006**                          |   | **Amount**                                                                                 |   | **Percent** |
|                                                    | (dollars                  in thousands)                                                          |
| Deposits:                                               |                                                                                             |   |                              |   |                                                                                       |   |   |
|   Noninterest-bearing                  demand | $121,152                                                                                         |   | $122,540                          |   | ($1,388)                                                                                   |   | -1.1% |
|   Interest-bearing                  demand    |              203,719            |   | 185,308                           |   |               18,411 |   | 9.9% |
|   Savings                                     |                45,425 |   | 41,161                            |   | 4,264                                                                                      |   | 10.4% |
|   Time                                        |              333,609            |   | 277,284                           |   | 56,325                                                                                     |   | 20.3% |
|     Total                  deposits | $703,905                                                                                         |   | $626,293                          |   | $77,612                                                                                    |   | 12.4% |
|                                                    |                                                                                             |   |                              |   |                                                                                       |   |   |

***Borrowings.***

***Equity.***

***Investment      Securities Portfolio***

***Results      of Operations for the Nine months and Three months ended September 30, 2007      and      September 30, 2006***

***    Net      income***
*.  *

***    Net      interest      income.***

----

|                                                                                                                                                                                                                                                    | **Nine                  Months Ended September 30,**   |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------|
|                                                                                                                                                                                                                                                    | **2007**                                               |   | **2006** |
|                                                                                                                                                                                                                                                    | **Average**                                            |   | **Yield/** |   | **Average** |   | **Yield/** |
|                                                                                                                                                                                                                                                    | **Balance**                                            | **Interest** | **                      Rate                  (1)** | **Balance** | **Interest** | **                      Rate                  (1)** |
|                                                                                                                                                                                                                                                    | (unaudited,                  dollars in thousands)     |
| **Assets**                                                                                                                                                                                                                                              |                                                   |   |   |   |   |   |   |
| Interest-earning                  assets:                                                                                                                                                                                                               |                                                   |   |   |   |   |   |   |
|   Interest-earning                  deposits with banks                                                                                                                                                                                       |  $       1,763 |  $       62 | 4.7% |   |  $       2,300 |  $       70 | 4.1% |
|   Securities                  (including FHLB stock)                                                                                                                                                                                          | 163,807                                                | 6,565 | 5.4% |   | 181,716 | 7,356 | 5.4% |
|   Federal                  funds sold                                                                                                                                                                                                         | 6,953                                                  | 273 | 5.2% |   | 1,316 | 46 | 4.7% |
|   Loans                  held for sale                                                                                                                                                                                                        | 5,544                                                  | 267 | 6.4% |   | 417 | 16 | 5.1% |
|   Loans,                  net of unearned income                                                                                                                                                                                              | 535,181                                                | 34,115 | 8.5% |   | 504,130 | 30,130 | 8.0% |
|     Total                  interest-earning assets                                                                                                                                                                                  | 713,248                                                | 41,282 | 7.7% |   | 689,879 | 37,618 | 7.3% |
|                                                                                                                                                                                                                                                    |                                                   |   |   |   |   |   |   |
| Noninterest-earning                  assets:                                                                                                                                                                                                            |                                                   |   |   |   |   |   |   |
|   Cash                  and due from banks                                                                                                                                                                                                    | 19,317                                                 |   |   |   | 20,961 |   |   |
|   Premises                  and equipment, net                                                                                                                                                                                                | 14,551                                                 |   |   |   | 12,138 |   |   |
|   Other                  assets                                                                                                                                                                                                               | 3,877                                                  |   |   |   | 3,142 |   |   |
| **    Total**                                                                                                                                                                                                                       | $750,993                                               |   |   |   | $726,120 |   |   |
|                                                                                                                                                                                                                                                    |                                                   |   |   |   |   |   |   |
| **Liabilities                  and Stockholders' Equity**                                                                                                                                                                                               |                                                   |   |   |   |   |   |
| Interest-bearing                  liabilities:                                                                                                                                                                                                          |                                                   |   |   |   |   |   |   |
|   Demand                  deposits                                                                                                                                                                                                            | $198,330                                               | 4,865 | 3.3% |   | $179,371 | 4,086 | 3.0% |
|   Savings                  deposits                                                                                                                                                                                                           | 42,418                                                 | 171 | 0.5% |   | 43,184 | 119 | 0.4% |
|   Time                  deposits                                                                                                                                                                                                              | 291,699                                                | 9,758 | 4.5% |   | 265,472 | 8,056 | 4.1% |
|   Borrowings                                                                                                                                                                                                                                  | 28,828                                                 | 970 | 4.5% |   | 46,003 | 1,675 | 4.9% |
|     Total                  interest-bearing liabilities                                                                                                                                                                             | 561,275                                                | 15,764 | 3.8% |   | 534,030 | 13,936 | 3.5% |
|                                                                                                                                                                                                                                                    |                                                   |   |   |   |   |   |   |
| Noninterest-bearing                  liabilities:                                                                                                                                                                                                       |                                                   |   |   |   |   |   |   |
|   Demand                  deposits                                                                                                                                                                                                            | 122,307                                                |   |   |   | 132,044 |   |   |
|   Other                                                                                                                                                                                                                                       | 5,475                                                  |   |   |   | 4,259 |   |   |
|     Total                  liabilities                                                                                                                                                                                              | 689,057                                                |   |   |   | 670,333 |   |   |
|   Stockholders'                  equity                                                                                                                                                                                                       | 61,936                                                 |   |   |   | 55,787 |   |   |
| **    Total**                                                                                                                                                                                                                       | $750,993                                               |   |   |   | $726,120 |   |   |
| **Net                  interest spread                  (2)**                                                                                                                                                                                           |                                                   |   | 3.9% |   |   |   | 3.8% |
| **Net                  interest income/Net interest                  margin                  (3)**                                                                                                                                                      |  $  25,518                              | 4.8% |   |   |  $  23,682 | 4.6% |
|                                                                                                                                                                                                                                                    |                                                   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                    |                                                   |   |   |   |   |   |   |
| (1)                    Yields and rates for the nine months ended September 30, 2007 and                  2006 are                  annualized.                                                                                               |
| (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 margin represents net interest income divided by average                  total                  interest-earning assets.                                                                            |

***    Provision      for      Loan Losses.  ***

----

***    Noninterest      Income.***

***    Noninterest      Expense.***

***    Income      Taxes.***

**Item      3.  Quantitative and Qualitative Disclosures about      Market**

***    Qualitative      Analysis.***

***    Quantitative      Analysis.***

----

|                                                               | **Interest                  Sensitivity Within**                                                                                                        |
|--------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                               | **3                  Months**                                                                                                                           | **Over                  3 Months** | **Total** | **Over** |   |
|                                                               | **Or                  Less**                                                                                                                            | **thru                  12 Months** | **One                  Year** | **One                  Year** | **Total** |
|                                                               | (unaudited,                  dollars in thousands)                                                                                                      |
| **Earning                  Assets:**                               |                                                                                                                                                    |   |   |   |   |
|   Loans                  (including loans held for sale) | $381,769                                                                                                                                                | $105,239 | $487,008 | $129,240 | $616,248 |
|   Securities                  (including FHLB stock)     |                40,225                                                        |                   2,174 |             42,399 |           108,756 |           151,155 |
|   Federal                  Funds Sold                    |                  3,292                                             |                          - |               3,292 |                      - |               3,292 |
|   Other                  earning assets                  |                     117                             |                   2,188 |               2,305 |                      - | 2,305 |
| **    Total                  earning assets**  | 425,403                                                                                                                                                 | 109,601 | 535,004 | 237,996 | $773,000 |
|                                                               |                                                                                                                                                    |   |   |   |   |
| **Source                  of Funds:**                              |                                                                                                                                                    |   |   |   |   |
| Interest                  Bearing Accounts:                        |                                                                                                                                                    |   |   |   |
|     Demand                  deposits           | 150,104                                                                                                                                                 |                          - | 150,104 | 53,615 | 203,719 |
|     Savings                                    | 11,356                                                                                                                                                  |                          - | 11,356 | 34,069 | 45,425 |
|     Time                  deposits             | 127,772                                                                                                                                                 | 134,994 | 262,766 | 70,843 | 333,609 |
|     Short-term                  borrowings     | 40,266                                                                                                                                                  |                   5,500 | 45,766 |                      - | 45,766 |
|     Long-term                  borrowings      |                          - |                   3,022 |               3,022 | 82 | 3,104 |
| Noninterest-bearing,                  net                          |                          - |                          - |                      - |           141,377 |           141,377 |
| **    Total                  source of funds** | 329,498                                                                                                                                                 | 143,516 | 473,014 | 299,986 | $773,000 |
| **Period                  gap**                                    | 95,905                                                                                                                                                  | (33,915) | 61,990 | (61,990) |   |
| **Cumulative                  gap**                                | $95,905                                                                                                                                                 | $61,990 | $61,990 | $           - |   |
|                                                               |                                                                                                                                                    |   |   |   |   |
| **Cumulative                  gap as a**                           |                                                                                                                                                    |   |   |   |   |
| ** percent                  of earning assets**               | 12.41%                                                                                                                                                  | 8.02% | 8.02% |   |   |
|                                                               |                                                                                                                                                    |   |   |   |   |

***Liquidity      and Capital Resources***

***    Liquidity***
*.      *

***    Capital      Resources***

----

***    Regulatory        Capital***
*. *

**Item      4. Controls and Procedures**

----

**PART        II.  OTHER INFORMATION**

**Item      1.  Legal Proceedings**

**Item      1A.  Risk Factors**

**Item      2.  Changes in Securities and Use of Proceeds**

**Item      3.  Defaults Upon Senior Securities**

**Item      4.  Submission of Matters to a Vote of Security      Holders**

**Item      5.  Other Information**

**Item      6.  Exhibits and Reports on Form 8-K**

*Consolidated financial statements*

*Consolidated financial statements Schedules*

*Exhibits*

| **Exhibit                  Number** |   | **Exhibit**                                                                                                                                                                                                                                                                                                                    |
|-------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                |   |                                                                                                                                                                                                                                                                                                                           |
| 11                                  |   | Statement                  regarding computation of earnings per common share                                                                                                                                                                                                                                                  |
|                                |   | *The                  information required by this item is incorporated by reference                  to the                  Company's Form 10-K for the period ended December 31, 2006, filed as                  exhibit 99.1 to Form 8-K12G3 filed with the SEC on                  08/02/2007 .*           |
|                                |   |                                                                                                                                                                                                                                                                                                                           |
| 12                                  |   | Statement                  regarding computation of ratios                                                                                                                                                                                                                                                                     |
|                                |   | *The                    information required by this item is incorporated by reference                    to the                    Company's Form 10-K for the period ended December 31, 2006, filed as                    exhibit 99.1 to Form 8-K12G3 filed with the SEC on                    08/02/2007 .* |
|                                |   |                                                                                                                                                                                                                                                                                                                           |
| 31.1                                |   | Certification                  of Chief Exexutive Officer pursuant to Section 302 of the Sarbanes-Oxley                  Act of 2002.                                                                                                                                                                                          |
|                                |   |                                                                                                                                                                                                                                                                                                                           |
| 31.2                                |   | Certification                  of Secretary and Treasurer of First Guaranty Bancshares, Inc. and                  Chief                  Financial Officer of First Guaranty Bank pursuan to Section 302                  of the                  Sarbanes-Oxley Act of 2002.                                                  |
|                                |   |                                                                                                                                                                                                                                                                                                                           |
| 32.1                                |   | Certification                  of Chief Exexutive Officer pursuant to Section 906 of the Sarbanes-Oxley                  Act of 2002.                                                                                                                                                                                          |
|                                |   |                                                                                                                                                                                                                                                                                                                           |
| 32.2                                |   | Certification                  of Secretary and Treasurer of First Guaranty Bancshares, Inc. and                  Chief                  Financial Officer of First Guaranty Bank pursuan to Section 906                  of the                  Sarbanes-Oxley Act of 2002.                                                  |

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| **FIRST                  GUARANTY BANCSHARES, INC.** |
|------------------------------------------------------|
|                                                 |   |    |
| Date:  November                  14, 2007  |   | By:                  /s/ Michael R. Sharp |
|                                                 |   | Michael                  R. Sharp |
|                                                 |   | President                  and |
|                                                 |   | Chief                  Executive Officer |
|                                                 |   |    |
| Date:  November                  14, 2007  |   | By:                  /s/ Michele E. LoBianco |
|                                                 |   | Michele                  E. LoBianco |
|                                                 |   | Secretary                  and Treasurer |
|                                                 |   | (Principal                  Financial                  Officer) |

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