|        |        |        |        |        |
|--------|--------|--------|--------|--------|
|   |   |   |   |   |

|        |           |        |
|--------|-----------|--------|
|   |      |   |
|   | FORM 10-Q |   |
|   |      |   |

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

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

|        |                                  |        |
|--------|----------------------------------|--------|
|   | Commission file number 000-24630 |   |

|        |        |        |
|--------|--------|--------|
|   |   |   |

|        |        |        |
|--------|--------|--------|
|   |   |   |

|        |        |        |
|--------|--------|--------|
|   |   |   |

|                          |                                      |
|--------------------------|--------------------------------------|
| Iowa                     | 42-1206172                           |
| (State of Incorporation) | (I.R.S. Employer Identification No.) |

|                                   |                                                                  |              |                                     |   |
|-----------------------------------|------------------------------------------------------------------|--------------|-------------------------------------|---|
| Large accelerated filer |  o                                                          |    | Accelerated filer              | x |
| Non-accelerated filer             |  o  (Do not check if a smaller reporting company) |    | Smaller reporting company | o |

|        |        |        |        |        |
|--------|--------|--------|--------|--------|
|   |   |   |   |   |

----

|               |              |                                                                                       |              |        |
|---------------|--------------|---------------------------------------------------------------------------------------|--------------|--------|
|          |         |                                                                                  |         |   |
|          |    | Page No.                                                                         |
| PART I        |    |                                                                                  |    |   |
|          |         |                                                                                  |
| Item 1.       |    | Financial Statements                                                                  |    | 1      |
|          |         |                                                                                  |
| Item 2.       |    | Management's Discussion and Analysis of Financial Condition and Results of Operations |    | 21     |
|          |         |                                                                                  |
| Item 3.       |    | Quantitative and Qualitative Disclosures about Market Risk                            |    | 41     |
|          |         |                                                                                  |
| Item 4.       |    | Controls and Procedures                                                               |    | 43     |
|          |         |                                                                                  |
| PART II       |    |                                                                                  |    |   |
|          |         |                                                                                  |
| Item 1.       |    | Legal Proceedings                                                                     |    | 43     |
|          |         |                                                                                  |
| Item 1A. |    | Risk Factors                                                                          |    | 44     |
|          |         |                                                                                  |
| Item 2.       |    | Unregistered Sales of Equity Securities and Use of Proceeds                           |    | 44     |
|          |         |                                                                                  |
| Item 3.       |    | Defaults Upon Senior Securities                                                       |    | 44     |
|          |         |                                                                                  |
| Item 4.       |    | [Removed and Reserved]                                                                |    | 44     |
|          |         |                                                                                  |
| Item 5.       |    | Other Information                                                                     |    | 44     |
|          |         |                                                                                  |
| Item 6.       |    | Exhibits                                                                              |    | 45     |
|          |         |                                                                                  |
|          |    | Signatures                                                                            |    | 46     |

----

Table of Contents

|                                                                                                       |                    |              |                   |              |        |           |        |
|-------------------------------------------------------------------------------------------------------|--------------------|--------------|-------------------|--------------|--------|-----------|--------|
|                                                                                                  | June 30, 2010 |         | December 31, 2009 |
| (dollars in thousands)                                                                                | (unaudited)        |         |              |
| ASSETS                                                                                                |               |         |              |
| Cash and due from banks                                                                               | $                  | 19,984       |              |    | $      | 25,452    |   |
| Interest-bearing deposits in banks                                                                    | 6,187              |         |         | 2,136        |   |
| Federal funds sold                                                                                    | —            |         |         | —      |   |
| Cash and cash equivalents                                                                             | 26,171             |         |         | 27,588       |   |
| Investment securities:                                                                                |          |         |              |
| Available for sale                                                                                    | 417,468            |         |         | 362,903      |   |
| Held to maturity (fair value of $5,434 as of  June 30, 2010 and $8,118 as of December 31, 2009)  | 5,350              |         |         | 8,009        |   |
| Loans held for sale                                                                                   | 1,217              |         |         | 1,208        |   |
| Loans                                                                                                 | 956,187            |         |         | 966,998      |   |
| Allowance for loan losses                                                                             | (14,823            | )            |              | (13,957      | )      |
| Net loans                                                                                             | 941,364            |         |         | 953,041      |   |
| Loan pool participations, net                                                                         | 76,889             |         |         | 83,052       |   |
| Premises and equipment, net                                                                           | 27,849             |         |         | 28,969       |   |
| Accrued interest receivable                                                                           | 9,900              |         |         | 11,534       |   |
| Other intangible assets, net                                                                          | 11,661             |         |         | 12,172       |   |
| Bank-owned life insurance                                                                             | 18,402             |         |         | 18,118       |   |
| Other real estate owned                                                                               | 2,634              |         |         | 3,635        |   |
| Deferred income taxes                                                                                 | 4,681              |         |         | 5,163        |   |
| Other assets                                                                                          | 19,962             |         |         | 19,391       |   |
| Total assets                                                                                          | $                  | 1,563,548    |              |    | $      | 1,534,783 |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                  |          |         |              |
| Deposits:                                                                                             |          |         |              |
| Non-interest bearing demand                                                                           | $                  | 139,667      |              |    | $      | 133,990   |   |
| Interest-bearing checking                                                                             | 422,480            |         |         | 401,264      |   |
| Savings                                                                                               | 67,258             |         |         | 62,989       |   |
| Certificates of deposit under $100,000                                                                | 391,567            |         |         | 394,369      |   |
| Certificates of deposit $100,000 and over                                                             | 174,615            |         |         | 187,256      |   |
| Total deposits                                                                                        | 1,195,587          |         |         | 1,179,868    |   |
| Federal funds purchased                                                                               | 9,842              |         |         | 1,875        |   |
| Securities sold under agreements to repurchase                                                        | 38,553             |         |         | 43,098       |   |
| Federal Home Loan Bank borrowings                                                                     | 132,200            |         |         | 130,200      |   |
| Deferred compensation liability                                                                       | 3,786              |         |         | 3,832        |   |
| Long-term debt                                                                                        | 15,564             |         |         | 15,588       |   |
| Accrued interest payable                                                                              | 1,847              |         |         | 2,248        |   |
| Other liabilities                                                                                     | 8,782              |         |         | 5,866        |   |
| Total liabilities                                                                                     | 1,406,161          |         |         | 1,382,575    |   |
|                                                                                                  |               |         |              |
| Shareholders' equity:                                                                                 |          |         |              |
| Preferred stock, no par value, with a liquidation preference of $1,000 per share; authorized 500,000  |               |    |              |
|  shares; issued 16,000 shares as of June 30, 2010 and December 31, 2009                     | $                  | 15,733       |              |         | $      | 15,699    |   |
| Common stock, $1 par value; authorized 15,000,000 shares at June 30, 2010 and December 31, 2009; |               |         |              |
| issued 8,690,398 shares at June 30, 2010 and December 31, 2009; outstanding 8,612,582 shares     |               |         |              |
| at June 30, 2010 and 8,605,333 shares at December 31, 2009                                       | 8,690              |         |         | 8,690        |   |
| Additional paid-in capital                                                                            | 81,192             |         |         | 81,179       |   |
| Treasury stock at cost, 77,816 shares as of June 30, 2010 and 85,065 shares at December 31, 2009 | (1,082             | )            |              | (1,183       | )      |
| Retained earnings                                                                                     | 51,393             |         |         | 48,079       |   |
| Accumulated other comprehensive income (loss)                                                         | 1,461              |         |         | (256         | )      |
| Total shareholders' equity                                                                            | 157,387            |         |         | 152,208      |   |
| Total liabilities and shareholders' equity                                                            | $                  | 1,563,548    |              |    | $      | 1,534,783 |   |

----

Table of Contents

|                                                             |              |                            |        |                          |           |              |        |           |        |        |           |        |        |   |        |        |
|-------------------------------------------------------------|--------------|----------------------------|--------|--------------------------|-----------|--------------|--------|-----------|--------|--------|-----------|--------|--------|---|--------|--------|
| (unaudited)(dollars in thousands, except per share amounts) |    | Three Months EndedJune 30, |   | Six Months EndedJune 30, |
|                                                        |    | 2010                       |   | 2009                     |      | 2010         |   | 2009      |
| Interest income:                                            |    |                       |   |                     |      |         |   |      |
| Interest and fees on loans                                  |    | $                          | 13,761 |                     |      | $            | 14,785 |      |   | $      | 27,465    |   |   | $ | 29,696 |   |
| Interest and discount on loan pool participations           |    | 909                        |   |                     | 664       |         |   | 1,808     |   |   | 1,679     |   |
| Interest on bank deposits                                   |    | 17                         |   |                     | 1         |         |   | 27        |   |   | 1         |   |
| Interest on federal funds sold                              |    | 4                          |   |                     | 29        |         |   | 4         |   |   | 38        |   |
| Interest on investment securities:                          |    |                  |   |                     |      |         |   |      |
| Taxable securities                                          |    | 2,445                      |   |                     | 2,147     |         |   | 4,670     |   |   | 4,122     |   |
| Tax-exempt securities                                       |    | 986                        |   |                     | 1,000     |         |   | 1,976     |   |   | 1,970     |   |
| Total interest income                                       |    | 18,122                     |   |                     | 18,626    |         |   | 35,950    |   |   | 37,506    |   |
|                                                        |         |                       |   |                     |      |         |   |      |
| Interest expense:                                           |    |                       |   |                     |      |         |   |      |
| Interest on deposits:                                       |    |                       |   |                     |      |         |   |      |
| Interest-bearing checking                                   |    | 1,133                      |   |                     | 1,235     |         |   | 2,203     |   |   | 2,372     |   |
| Savings                                                     |    | 43                         |   |                     | 63        |         |   | 79        |   |   | 125       |   |
| Certificates of deposit under $100,000                      |    | 2,455                      |   |                     | 3,167     |         |   | 4,998     |   |   | 6,346     |   |
| Certificates of deposit $100,000 and over                   |    | 918                        |   |                     | 1,330     |         |   | 1,885     |   |   | 2,639     |   |
| Total interest expense on deposits                          |    | 4,549                      |   |                     | 5,795     |         |   | 9,165     |   |   | 11,482    |   |
| Interest on federal funds purchased                         |    | 1                          |   |                     | —   |         |   | 2         |   |   | 10        |   |
| Interest on securities sold under agreements to repurchase  |    | 70                         |   |                     | 127       |         |   | 146       |   |   | 251       |   |
| Interest on Federal Home Loan Bank borrowings               |    | 1,183                      |   |                     | 1,666     |         |   | 2,390     |   |   | 2,582     |   |
| Interest on notes payable                                   |    | 11                         |   |                     | 33        |         |   | 24        |   |   | 36        |   |
| Interest on long-term debt                                  |    | 152                        |   |                     | 161       |         |   | 300       |   |   | 347       |   |
| Total interest expense                                      |    | 5,966                      |   |                     | 7,782     |         |   | 12,027    |   |   | 14,708    |   |
| Net interest income                                         |    | 12,156                     |   |                     | 10,844    |         |   | 23,923    |   |   | 22,798    |   |
| Provision for loan losses                                   |    | 1,500                      |   |                     | 1,500     |         |   | 3,000     |   |   | 3,850     |   |
| Net interest income after provision for loan losses         |    | 10,656                     |   |                     | 9,344     |         |   | 20,923    |   |   | 18,948    |   |
|                                                        |         |                       |   |                     |      |         |   |      |
| Noninterest income:                                         |    |                       |   |                     |      |         |   |      |
| Trust and investment fees                                   |    | 1,214                      |   |                     | 964       |         |   | 2,448     |   |   | 2,071     |   |
| Service charges and fees on deposit accounts                |    | 1,034                      |   |                     | 990       |         |   | 1,898     |   |   | 1,901     |   |
| Mortgage origination and loan servicing fees                |    | 525                        |   |                     | 860       |         |   | 1,025     |   |   | 1,631     |   |
| Other service charges, commissions and fees                 |    | 576                        |   |                     | 510       |         |   | 1,160     |   |   | 1,035     |   |
| Bank-owned life insurance income                            |    | 147                        |   |                     | 198       |         |   | 314       |   |   | 422       |   |
| Investment securities losses, net:                          |    |                  |   |                     |      |    |   |      |
| Impairment losses on investment securities                  |    | —                    |   |                     | (614      | )            |   | (189      | )      |   | (614      | )      |
| Less noncredit-related losses                               |    | —                    |   |                     | —   |         |   | —   |   |   | —   |   |
| Net impairment losses                                       |    | —                    |   |                     | (614      | )            |   | (189      | )      |   | (614      | )      |
| Gain on sale of available for sale securities               |    | 233                        |   |                     | 1         |         |   | 470       |   |   | 1         |   |
| Gain (loss) on sale of premises and equipment               |    | (204                       | )      |                     | 5         |         |   | (281      | )      |   | 5         |   |
| Total noninterest income                                    |    | 3,525                      |   |                     | 2,914     |         |   | 6,845     |   |   | 6,452     |   |
|                                                        |         |                       |   |                     |      |         |   |      |
| Noninterest expense:                                        |    |                       |   |                     |      |         |   |      |
| Salaries and employee benefits                              |    | 5,691                      |   |                     | 5,847     |         |   | 11,481    |   |   | 11,600    |   |
| Net occupancy and equipment expense                         |    | 1,630                      |   |                     | 1,647     |         |   | 3,406     |   |   | 3,354     |   |
| Professional fees                                           |    | 659                        |   |                     | 842       |         |   | 1,408     |   |   | 1,924     |   |
| Data processing expense                                     |    | 414                        |   |                     | 491       |         |   | 871       |   |   | 1,007     |   |
| FDIC Insurance expense                                      |    | 705                        |   |                     | 1,055     |         |   | 1,397     |   |   | 1,953     |   |
| Other operating expense                                     |    | 1,563                      |   |                     | 1,443     |         |   | 3,147     |   |   | 3,410     |   |
| Total noninterest expense                                   |    | 10,662                     |   |                     | 11,325    |         |   | 21,710    |   |   | 23,248    |   |
| Income before income tax expense                            |    | 3,519                      |   |                     | 933       |         |   | 6,058     |   |   | 2,152     |   |
| Income tax expense                                          |    | 914                        |   |                     | 150       |         |   | 1,449     |   |   | 193       |   |
| Net income                                                  |    | $                          | 2,605  |                     |      | $            | 783    |      |   | $      | 4,609     |   |   | $ | 1,959  |   |
| Less: Preferred stock dividends and discount accretion      |    | $                          | 217    |                     |      | $            | 216    |      |   | $      | 434       |   |   | $ | 347    |   |
| Net income available to common shareholders                 |    | $                          | 2,388  |                     |      | $            | 567    |      |   | $      | 4,175     |   |   | $ | 1,612  |   |
| Share and Per share information:                            |    |                       |   |                     |      |         |   |      |
| Ending number of shares outstanding                         |    | 8,612,582                  |   |                     | 8,605,202 |         |   | 8,612,582 |   |   | 8,605,202 |   |
| Average number of shares outstanding                        |    | 8,612,582                  |   |                     | 8,605,202 |         |   | 8,610,231 |   |   | 8,604,134 |   |
| Diluted average number of shares                            |    | 8,643,233                  |   |                     | 8,621,752 |         |   | 8,628,756 |   |   | 8,620,684 |   |
| Earnings per common share - basic                           |    | $                          | 0.27   |                     |      | $            | 0.07   |      |   | $      | 0.48      |   |   | $ | 0.19   |   |
| Earnings per common share - diluted                         |    | 0.27                       |   |                     | 0.07      |         |   | 0.48      |   |   | 0.19      |   |
| Dividends paid per common share                             |    | 0.05                       |   |                     | 0.05      |         |   | 0.10      |   |   | 0.20      |   |

----

Table of Contents

|                                                                                                       |              |                |              |              |              |                          |              |               |              |                  |         |                                            |        |         |        |        |         |        |        |         |        |   |        |        |        |   |         |        |
|-------------------------------------------------------------------------------------------------------|--------------|----------------|--------------|--------------|--------------|--------------------------|--------------|---------------|--------------|------------------|---------|--------------------------------------------|--------|---------|--------|--------|---------|--------|--------|---------|--------|---|--------|--------|--------|---|---------|--------|
| (unaudited)(dollars in thousands, except per share amounts)                                           |    | PreferredStock |    | CommonStock  |    | AdditionalPaid-inCaptial |         | TreasuryStock |         | RetainedEarnings |    | AccumulatedOtherComprehensiveIncome (loss) |   | Total   |
| Balance at December 31, 2008                                                                     |    | $              | —      |         |    | $                        | 8,690        |          |    | $                | 80,757  |                                       |   | $       | (1,215 | )      |    | $      | 43,683 |    |   | $ | (1,573 | )      |   | $ | 130,342 |   |
| Cumulative effect of FAS ASC 320, net of tax                                                          |         | —        |         |         | —      |                     |         | —       |         |             | — |                                       |   | 3,266   |   |   | (3,266  | )      |   | — |   |
| Comprehensive income:                                                                                 |    |           |    |         |    |                     |         |          |         |             |    |                                       |   |    |
| Net income                                                                                            |    | —        |         |    | —      |                     |    | —       |         |             | — |                                       |   | 1,959   |   |   | — |   |   | 1,959   |   |
| Change in net unrealized gains arising during the period on securities available for sale, net of tax |    | —        |         |    | —      |                     |    | —       |         |             | — |                                       |   | — |   |   | 1,170   |   |   | 1,170   |   |
| Total comprehensive income                                                                            |    | —        |         |         | —      |                     |         | —       |         |             | — |                                       |   | 5,225   |   |   | (2,096  | )      |   | 3,129   |   |
| Dividends paid on common stock ($0.20 per share)                                                      |    | —        |         |         | —      |                     |         | —       |         |             | — |                                       |   | (1,742  | )      |   | — |   |   | (1,742  | )      |
| Dividends paid on preferred stock                                                                     |         | —        |         |         | —      |                     |         | —       |         |             | — |                                       |   | (220    | )      |   | — |   |   | (220    | )      |
| Release/lapse of restriction of 2,147 RSUs                                                            |         | —        |         |         | —      |                     |         | (30           | )            |             | 30      |                                       |   | — |   |   | — |   |   | — |   |
| Issuance of preferred shares (16,000 shares)                                                          |    | 15,642         |         |         | —      |                     |         | —       |         |             | — |                                       |   | — |   |   | — |   |   | 15,642  |   |
| Common warrants issued                                                                                |    | —        |         |         | —      |                     |         | 358           |         |             | — |                                       |   | — |   |   | — |   |   | 358     |   |
| Preferred stock discount accretion                                                                    |    | 25             |         |         | —      |                     |         | —       |         |             | — |                                       |   | (25     | )      |   | — |   |   | — |   |
| Stock compensation                                                                                    |    | —        |         |         | —      |                     |         | 39            |         |             | — |                                       |   | — |   |   | — |   |   | 39      |   |
| Balance at June 30, 2009                                                                              |    | $              | 15,667       |         |         | $                        | 8,690        |          |         | $                | 81,124  |                                       |   | $       | (1,185 | )      |    | $      | 46,921 |    |   | $ | (3,669 | )      |   | $ | 147,548 |   |
| Balance at December 31, 2009                                                                     |    | $              | 15,699       |         |    | $                        | 8,690        |          |    | $                | 81,179  |                                       |   | $       | (1,183 | )      |    | $      | 48,079 |    |   | $ | (256   | )      |   | $ | 152,208 |   |
| Comprehensive income:                                                                                 |    |           |    |         |    |                     |         |          |         |             |    |                                       |   |    |
| Net income                                                                                            |    | —        |         |    | —      |                     |    | —       |         |             | — |                                       |   | 4,609   |   |   | — |   |   | 4,609   |   |
| Change in net unrealized gains arising during the period on securities available for sale, net of tax |    | —        |         |    | —      |                     |    | —       |         |             | — |                                       |   | — |   |   | 1,717   |   |   | 1,717   |   |
| Total comprehensive income                                                                            |    | —        |         |    | —      |                     |    | —       |         |             | — |                                       |   | 4,609   |   |   | 1,717   |   |   | 6,326   |   |
| Dividends paid on common stock ($0.10 per share)                                                      |    | —        |         |    | —      |                     |    | —       |         |             | — |                                       |   | (861    | )      |   | — |   |   | (861    | )      |
| Dividends paid on preferred stock                                                                     |    | —        |         |    | —      |                     |    | —       |         |             | — |                                       |   | (400    | )      |   | — |   |   | (400    | )      |
| Stock options exercised (1,945 shares)                                                                |    | —        |         |    | —      |                     |    | (11           | )            |             | 27      |                                       |   | — |   |   | — |   |   | 16      |   |
| Release/lapse of restriction on 5,404 RSUs                                                            |    | —        |         |    | —      |                     |    | (74           | )            |             | 74      |                                       |   | — |   |   | — |   |   | — |   |
| Preferred stock discount accretion                                                                    |    | 34             |         |    | —      |                     |    | —       |         |             | — |                                       |   | (34     | )      |   | — |   |   | — |   |
| Stock compensation                                                                                    |    | —        |         |    | —      |                     |    | 98            |         |             | — |                                       |   | — |   |   | — |   |   | 98      |   |
| Balance at June 30, 2010                                                                              |    | $              | 15,733       |         |    | $                        | 8,690        |          |    | $                | 81,192  |                                       |   | $       | (1,082 | )      |    | $      | 51,393 |    |   | $ | 1,461  |   |   | $ | 157,387 |   |

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Table of Contents

|                                                                                   |                          |        |        |          |        |       |        |
|-----------------------------------------------------------------------------------|--------------------------|--------|--------|----------|--------|-------|--------|
| (unaudited)(dollars in thousands)                                                 | Six Months EndedJune 30, |
|                                                                              | 2010                     |   | 2009   |
| Cash flows from operating activities:                                             |                     |   |   |
| Net income                                                                        | $                        | 4,609  |   |     | $      | 1,959 |   |
| Adjustments to reconcile net income to net cash provided by operating activities: |                     |   |   |
| Provision for loan losses                                                         | 3,000                    |   |   | 3,850    |   |
| Depreciation, amortization and accretion                                          | 3,003                    |   |   | 1,263    |   |
| Loss on sale of premises and equipment                                            | 281                      |   |   | 1        |   |
| Deferred income taxes                                                             | (553                     | )      |   | 722      |   |
| Stock-based compensation                                                          | 98                       |   |   | 39       |   |
| Net gains on sale of available for sale securities                                | (470                     | )      |   | —  |   |
| Net gains on sale of other real estate owned                                      | (53                      | )      |   | (10      | )      |
| Writedown of other real estate owned                                              | 112                      |   |   | —  |   |
| Other-than-temporary impairment of investment securities                          | 189                      |   |   | 614      |   |
| (Increase) decrease in loans held for sale                                        | (9                       | )      |   | 1,546    |   |
| Net change in:                                                                    |                     |   |   |
| Decrease in accrued interest receivable                                           | 1,634                    |   |   | 1,493    |   |
| Decrease (increase) in other assets                                               | (571                     | )      |   | 3,173    |   |
| (Decrease) increase in deferred compensation liability                            | (46                      | )      |   | 2,265    |   |
| (Decrease) increase in accounts payable, accrued expenses, and other liabilities  | 2,515                    |   |   | (6,166   | )      |
| Net cash provided by operating activities                                         | 13,739                   |   |   | 10,749   |   |
|                                                                              |                     |   |   |
| Cash flows from investing activities:                                             |                     |   |   |
| Available for sale securities:                                                    |                     |   |   |
| Sales                                                                             | 14,458                   |   |   | —  |   |
| Maturities                                                                        | 49,369                   |   |   | 44,800   |   |
| Purchases                                                                         | (116,428                 | )      |   | (122,154 | )      |
| Held to maturity securities:                                                      |                     |   |   |
| Maturities                                                                        | 2,647                    |   |   | 700      |   |
| Purchases                                                                         | —                  |   |   | (950     | )      |
| Loans made to customers, net of collections                                       | 8,076                    |   |   | 22,440   |   |
| Loan pool participations, net                                                     | 6,163                    |   |   | 4,143    |   |
| Purchases of premises and equipment                                               | (2,182                   | )      |   | (2,461   | )      |
| Proceeds from sale of other real estate owned                                     | 1,543                    |   |   | 320      |   |
| Proceeds from sale of premises and equipment                                      | 1,610                    |   |   | 15       |   |
| Activity in bank-owned life insurance:                                            |                     |   |   |
| Purchases                                                                         | —                  |   |   | —  |   |
| Increase in cash value                                                            | (284                     | )      |   | (422     | )      |
| Net cash used in investing activities                                             | (35,028                  | )      |   | (53,569  | )      |

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|                                                                |                          |        |        |         |        |        |        |
|----------------------------------------------------------------|--------------------------|--------|--------|---------|--------|--------|--------|
| (unaudited)(dollars in thousands)                              | Six Months EndedJune 30, |
|                                                           | 2010                     |   | 2009   |
| Cash flows from financing activities:                          |                     |   |   |
| Net increase in deposits                                       | 15,719                   |   |   | 68,343  |   |
| Net increase (decrease) in federal funds purchased             | 7,967                    |   |   | (13,050 | )      |
| Net decrease in securities sold under agreements to repurchase | (4,545                   | )      |   | (7,748  | )      |
| Proceeds from Federal Home Loan Bank advances                  | 25,000                   |   |   | 10,000  |   |
| Repayment of Federal Home Loan Bank advances                   | (23,000                  | )      |   | (17,500 | )      |
| Stock options exercised                                        | 16                       |   |   | — |   |
| Payments on long-term debt                                     | (24                      | )      |   | (26     | )      |
| Dividends paid                                                 | (1,261                   | )      |   | (1,962  | )      |
| Issuance of preferred stock and warrants                       | —                  |   |   | 16,000  |   |
| Net cash provided by financing activities                      | 19,872                   |   |   | 54,057  |   |
|                                                           |                     |   |   |
| Net increase (decrease) in cash and cash equivalents           | (1,417                   | )      |   | 11,237  |   |
| Cash and cash equivalents at beginning of period               | 27,588                   |   |   | 32,926  |   |
| Cash and cash equivalents at end of period                     | $                        | 26,171 |   |    | $      | 44,163 |   |
|                                                           |                     |   |   |
| Supplemental disclosures of cash flow information:             |                     |   |   |
| Cash paid during the period for:                               |                     |   |   |
| Interest                                                       | $                        | 12,428 |   |    | $      | 17,502 |   |
| Income taxes                                                   | $                        | 1,683  |   |    | $      | (46    | )      |
|                                                           |                     |   |   |
| Supplemental schedule of non-cash investing activities:        |                     |   |   |
| Transfer of loans to other real estate owned                   | $                        | 601    |   |    | $      | 367    |   |

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|        |                                  |        |         |        |        |        |
|--------|----------------------------------|--------|---------|--------|--------|--------|
|   | Number of warrants granted       |   | 198,675 |   |   |
|   | Exercise price                   |   | $       | 12.08  |   |   |
|   | Grant date fair market value     |   | $       | 7.32   |   |   |
|   | Estimated forfeiture rate        |   | 0%      |   |
|   | Risk-free interest rate          |   | 2.93    | %      |   |
|   | Expected life, in years          |   | 10      |   |   |
|   | Expected volatility              |   | 40.7    | %      |   |
|   | Expected dividend yield          |   | 3.86    | %      |   |
|   | Estimated fair value per warrant |   | $       | 1.39   |   |   |

|        |                                                                                                         |              |                            |        |                          |           |        |        |           |        |              |           |              |              |        |        |        |        |
|--------|---------------------------------------------------------------------------------------------------------|--------------|----------------------------|--------|--------------------------|-----------|--------|--------|-----------|--------|--------------|-----------|--------------|--------------|--------|--------|--------|--------|
|   | Earnings per Share Information                                                                          |    | Three Months EndedJune 30, |   | Six Months EndedJune 30, |      |
|   | (dollars in thousands, except per share amounts)                                                        |    | 2010                       |   | 2009                     |      | 2010   |   | 2009      |   |
|   | Weighted average number of shares outstanding during the period                                         |    | 8,612,582                  |   |                     | 8,605,202 |   |   | 8,610,231 |   |    | 8,604,134 |         |         |
|   | Weighted average number of shares outstanding during the period including all dilutive potential shares |    | 8,643,233                  |   |                     | 8,621,752 |   |   | 8,628,756 |   |    | 8,620,684 |         |         |
|   | Net income                                                                                              |    | $                          | 2,605  |                     |      | $      | 783    |      |   | 4,609        |      |    | $            | 1,959  |   |   |
|   | Preferred stock dividend accrued and discount accretion                                                 |    | (217                       | )      |                     | (216      | )      |   | (434      | )      |    | (347      | )            |         |
|   | Net income available to common stockholders                                                             |    | $                          | 2,388  |                     |      | $      | 567    |      |   | $            | 4,175     |         |    | $      | 1,612  |   |   |
|   | Earnings per share - basic                                                                              |    | $                          | 0.27   |                     |      | $      | 0.07   |      |   | 0.48         |      |    | 0.19         |   |   |
|   | Earnings per share - diluted                                                                            |    | $                          | 0.27   |                     |      | $      | 0.07   |      |   | 0.48         |      |    | 0.19         |   |   |

|        |                                                                    |                     |              |                      |              |                       |              |                     |              |        |         |        |        |   |         |        |        |
|--------|--------------------------------------------------------------------|---------------------|--------------|----------------------|--------------|-----------------------|--------------|---------------------|--------------|--------|---------|--------|--------|---|---------|--------|--------|
|   |                                                               | As of June 30, 2010 |         |
|   |                                                               | AmortizedCost       |    | GrossUnrealizedGains |    | GrossUnrealizedLosses |         | EstimatedFair Value |         |
|   | (in thousands)                                                     |                |    |                 |    |                  |         |                |         |
|   | U.S. Government agencies and corporations                          | $                   | 99,358       |                 |    | $                     | 2,143        |                |    | $      | — |   |   | $ | 101,501 |   |   |
|   | State and political subdivisions                                   | 160,829             |         |            | 5,864        |                  |    | (79                 | )            |   | 166,614 |   |   |
|   | Mortgage-backed securities and collateralized mortgage obligations | 132,470             |         |            | 3,885        |                  |    | (658                | )            |   | 135,697 |   |   |
|   | Corporate debt securities                                          | 12,983              |         |            | 439          |                  |    | (1,186              | )            |   | 12,236  |   |   |
|   |                                                               | 405,640             |         |            | 12,331       |                  |    | (1,923              | )            |   | 416,048 |   |   |
|   | Common stocks                                                      | 1,476               |         |            | 187          |                  |    | (243                | )            |   | 1,420   |   |   |
|   | Total                                                              | $                   | 407,116      |                 |    | $                     | 12,518       |                |    | $      | (2,166  | )      |   | $ | 417,468 |   |   |

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|        |                                                                    |                              |              |                      |              |                       |              |                     |              |        |         |        |        |   |         |        |        |
|--------|--------------------------------------------------------------------|------------------------------|--------------|----------------------|--------------|-----------------------|--------------|---------------------|--------------|--------|---------|--------|--------|---|---------|--------|--------|
|   |                                                               | As of December 31, 2009 |         |
|   |                                                               | AmortizedCost                |    | GrossUnrealizedGains |    | GrossUnrealizedLosses |         | EstimatedFair Value |         |
|   | (in thousands)                                                     |                         |    |                 |    |                  |         |                |         |
|   | U.S. Government agencies and corporations                          | $                            | 79,503       |                 |    | $                     | 1,789        |                |    | $      | (101    | )      |   | $ | 81,191  |   |   |
|   | State and political subdivisions                                   | 151,628                      |         |            | 3,801        |                  |    | (205                | )            |   | 155,224 |   |   |
|   | Mortgage-backed securities and collateralized mortgage obligations | 105,865                      |         |            | 2,760        |                  |    | (49                 | )            |   | 108,576 |   |   |
|   | Corporate debt securities                                          | 16,778                       |         |            | 488          |                  |    | (1,104              | )            |   | 16,162  |   |   |
|   |                                                               | 353,774                      |         |            | 8,838        |                  |    | (1,459              | )            |   | 361,153 |   |   |
|   | Common stocks                                                      | 1,529                        |         |            | 298          |                  |    | (77                 | )            |   | 1,750   |   |   |
|   | Total                                                              | $                            | 355,303      |                 |    | $                     | 9,136        |                |    | $      | (1,536  | )      |   | $ | 362,903 |   |   |

|        |                                  |                     |              |                      |              |                       |              |                          |              |              |         |        |              |   |       |        |        |
|--------|----------------------------------|---------------------|--------------|----------------------|--------------|-----------------------|--------------|--------------------------|--------------|--------------|---------|--------|--------------|---|-------|--------|--------|
|   |                             | As of June 30, 2010 |         |
|   |                             | AmortizedCost       |    | GrossUnrealizedGains |    | GrossUnrealizedLosses |    | EstimatedFair Value |         |
|   | (in thousands)                   |                |    |                 |    |                  |    |                     |         |
|   | Mortgage-backed securities       | $                   | 61           |                 |    | $                     | 5            |                     |    | $            | — |   |    | $ | 66    |   |   |
|   | State and political subdivisions | 4,423               |         |            | 79           |                  |    | —                  |         |    | 4,502   |   |         |
|   | Corporate debt securities        | 866                 |         |            | —      |                  |    | —                  |         |    | 866     |   |         |
|   | Total                            | $                   | 5,350        |                 |    | $                     | 84           |                     |    | $            | — |   |    | $ | 5,434 |   |   |

|        |                                  |                              |              |                      |              |                       |              |                          |              |              |         |        |              |   |       |        |        |
|--------|----------------------------------|------------------------------|--------------|----------------------|--------------|-----------------------|--------------|--------------------------|--------------|--------------|---------|--------|--------------|---|-------|--------|--------|
|   |                             | As of December 31, 2009 |         |
|   |                             | AmortizedCost                |    | GrossUnrealizedGains |    | GrossUnrealizedLosses |    | EstimatedFair Value |         |
|   | (in thousands)                   |                         |    |                 |    |                  |    |                     |         |
|   | Mortgage-backed securities       | $                            | 71           |                 |    | $                     | 5            |                     |    | $            | — |   |    | $ | 76    |   |   |
|   | State and political subdivisions | 7,074                        |         |            | 104          |                  |    | —                  |         |    | 7,178   |   |         |
|   | Corporate debt securities        | 864                          |         |            | —      |                  |    | —                  |         |    | 864     |   |         |
|   | Total                            | $                            | 8,009        |                 |    | $                     | 109          |                     |    | $            | — |   |    | $ | 8,118 |   |   |

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|        |                                                                    |                    |                     |                              |                        |                   |              |              |                        |              |              |              |                        |         |        |              |        |         |              |              |        |         |        |              |   |         |        |        |
|--------|--------------------------------------------------------------------|--------------------|---------------------|------------------------------|------------------------|-------------------|--------------|--------------|------------------------|--------------|--------------|--------------|------------------------|---------|--------|--------------|--------|---------|--------------|--------------|--------|---------|--------|--------------|---|---------|--------|--------|
|   |                                                               |               |           | As of June 30, 2010          |                   |
|   | NumberofSecurities                                                 |          | Less than 12 Months |                    | 12 Months or More      |         | Total        |         |
|   |                                                               |          | FairValue           |                    | UnrealizedLosses  |         | FairValue    |    | UnrealizedLosses  |    | FairValue    |    | UnrealizedLosses  |    |
|   | (in thousands, except number of securities)                        |               |           |                         |              |              |    |         |              |         |    |         |              |    |   |
|   | U.S. Government agencies and corporations                          | —            |                |                    | $                      | —           |         |    | $                      | —      |         |    | $                      | — |   |    | $      | — |         |    | $      | — |   |    | $ | — |   |   |
|   | State and political subdivisions                                   | 32                 |                |                    | 7,570                  |              |    | 31           |                   |    | 3,932        |         |              | 48      |   |    | 11,502 |    |    | 79           |   |    |
|   | Mortgage-backed securities and collateralized mortgage obligations | 4                  |                |                    | 20,389                 |              |    | 658          |                   |    | —      |         |              | — |   |    | 20,389 |    |    | 658          |   |    |
|   | Corporate debt securities                                          | 4                  |                |                    | 586                    |              |    | 1,186        |                   |    | —      |         |              | — |   |    | 586    |    |    | 1,186        |   |    |
|   | Common stocks                                                      | 4                  |                |                    | 158                    |              |    | 243          |                   |    | —      |         |              | — |   |    | 158    |    |    | 243          |   |    |
|   | Total                                                              | 44                 |                |                    | $                      | 28,703            |         |    | $                      | 2,118        |         |    | $                      | 3,932   |   |    | $      | 48      |         |    | $      | 32,635  |   |    | $ | 2,166   |   |   |
|   |                                                               |               |                |                         |                   |              |         |         |                   |         |         |         |                   |    |   |
|   |                                                               |               |                |                         |                   |              |         |         |                   |         |         |         |                   |    |   |
|   |                                                               |               |           | As of December 31, 2009 |                   |
|   |                                                               | NumberofSecurities |           | Less than 12 Months          |              | 12 Months or More |    | Total        |                   |
|   |                                                               |          | FairValue           |                    | UnrealizedLosses  |         | FairValue    |    | UnrealizedLosses  |    | FairValue    |    | UnrealizedLosses  |    |
|   | (in thousands, except number of securities)                        |               |           |                         |              |              |    |         |              |         |    |         |              |    |   |
|   | U.S. Government agencies and corporations                          | 3                  |                |                    | $                      | 10,120            |         |    | $                      | 101          |         |    | $                      | — |   |    | $      | — |         |    | $      | 10,120  |   |    | $ | 101     |   |   |
|   | State and political subdivisions                                   | 65                 |                |                    | 11,709                 |              |    | 116          |                   |    | 4,616        |         |              | 89      |   |    | 16,325 |    |    | 205          |   |    |
|   | Mortgage-backed securities and collateralized mortgage obligations | 1                  |                |                    | 4,972                  |              |    | 49           |                   |    | —      |         |              | — |   |    | 4,972  |    |    | 49           |   |    |
|   | Corporate debt securities                                          | 4                  |                |                    | —                |              |    | —      |                   |    | 857          |         |              | 1,104   |   |    | 857    |    |    | 1,104        |   |    |
|   | Common stocks                                                      | 4                  |                |                    | 218                    |              |    | 77           |                   |    | —      |         |              | — |   |    | 218    |    |    | 77           |   |    |
|   | Total                                                              | 77                 |                |                    | $                      | 27,019            |         |    | $                      | 343          |         |    | $                      | 5,473   |   |    | $      | 1,193   |         |    | $      | 32,492  |   |    | $ | 1,536   |   |   |

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|        |                                                             |              |                                          |        |                                   |         |        |         |        |        |
|--------|-------------------------------------------------------------|--------------|------------------------------------------|--------|-----------------------------------|---------|--------|---------|--------|--------|
|   | (in thousands)                                              |    | Three MonthsEndedJune 30, 2010 |   | Six MonthsEndedJune 30, 2010 |    |
|   | Beginning balance                                           |    | $                                        | 189    |                              |    | $      | — |   |   |
|   | Additional credit losses:                                   |    |                                     |   |                              |    |
|   | Securities with no previous other than temporary impairment |    | —                                  |   |                              | — |   |    |
|   | Securities with previous other than temporary impairments   |    | —                                  |   |                              | 189     |   |    |
|   | Ending balance                                              |    | $                                        | 189    |                              |    | $      | 189     |   |   |

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|        |                                                                    |                    |              |                  |              |               |              |                 |              |              |         |        |              |   |       |        |        |
|--------|--------------------------------------------------------------------|--------------------|--------------|------------------|--------------|---------------|--------------|-----------------|--------------|--------------|---------|--------|--------------|---|-------|--------|--------|
|   |                                                               | Available For Sale |    | Held to Maturity |         |
|   |                                                               | AmortizedCost      |    | Fair Value  |    | AmortizedCost |    | Fair Value |         |
|   | (in thousands)                                                     |               |    |             |    |          |    |            |         |
|   | Due in one year or less                                            | $                  | 46,545       |             |    | $             | 47,046       |            |    | $            | 1,790   |   |    | $ | 1,808 |   |   |
|   | Due after one year through five years                              | 116,220            |         |        | 120,101      |          |    | 2,633           |         |    | 2,694   |   |         |
|   | Due after five years through ten years                             | 80,503             |         |        | 83,208       |          |    | —         |         |    | — |   |         |
|   | Due after ten years                                                | 29,902             |         |        | 29,996       |          |    | 866             |         |    | 866     |   |         |
|   | Mortgage-backed securities and collateralized mortgage obligations | 132,470            |         |        | 135,697      |          |    | 61              |         |    | 66      |   |         |
|   | Total                                                              | $                  | 405,640      |             |    | $             | 416,048      |            |    | $            | 5,350   |   |    | $ | 5,434 |   |   |

|        |                                               |                                      |        |                                    |         |        |        |        |        |        |         |        |        |   |      |        |        |
|--------|-----------------------------------------------|--------------------------------------|--------|------------------------------------|---------|--------|--------|--------|--------|--------|---------|--------|--------|---|------|--------|--------|
|   |                                          | Three Months EndedJune 30, |   | Six Months EndedJune 30, |    |
|   |                                          | 2010                                 |   | 2009                               |    | 2010   |   | 2009   |   |
|   | (in thousands)                                |                                 |   |                               |    |   |   |   |   |
|   | Available for sale fixed maturity securities: |                                 |   |                               |    |   |   |   |   |
|   | Gross realized gains                          | $                                    | 233    |                               |    | $      | 1      |   |   | $      | 430     |   |   | $ | 1    |   |   |
|   | Gross realized losses                         | —                              |   |                               | — |   |   | (189   | )      |   | — |   |   |
|   |                                          | 233                                  |   |                               | 1       |   |   | 241    |   |   | 1       |   |   |
|   | Equity securities:                            |                                 |   |                               |    |   |   |   |   |
|   | Gross realized gains                          | —                              |   |                               | — |   |   | 49     |   |   | — |   |   |
|   | Gross realized losses                         | —                              |   |                               | (614    | )      |   | (9     | )      |   | (614    | )      |   |
|   |                                          | —                              |   |                               | (614    | )      |   | 40     |   |   | (614    | )      |   |
|   |                                          | $                                    | 233    |                               |    | $      | (613   | )      |   | $      | 281     |   |   | $ | (613 | )      |   |

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|        |                                             |                                                        |         |                                                                                 |         |                                                       |         |                                        |        |        |         |        |        |   |         |        |
|--------|---------------------------------------------|--------------------------------------------------------|---------|---------------------------------------------------------------------------------|---------|-------------------------------------------------------|---------|----------------------------------------|--------|--------|---------|--------|--------|---|---------|--------|
|   |                                        | Fair Value Measurement at June 30, 2010 Using          |
|   | (in thousands)                              | Total                                                  |    | Quoted Prices inActive Markets forIdentical Assets(Level 1) |    | Significant  OtherObservableInputs(Level 2)      |    | SignificantUnobservableInputs(Level 3) |
|   | Assets:                                     |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   | Available for sale debt securities:         |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   | U.S. Government agencies and corporations   | $                                                      | 101,501 |                                                                            |    | $                                                     | — |                                   |   | $      | 101,501 |   |   | $ | — |   |
|   | State and policitical subdivisions          | 166,614                                                |    |                                                                            | — |                                                  |    | 166,614                                |   |   | — |   |
|   | Residential mortgage-backed securities      | 57,929                                                 |    |                                                                            | — |                                                  |    | 57,929                                 |   |   | — |   |
|   | Commercial mortgage-backed securities       | 77,768                                                 |    |                                                                            | — |                                                  |    | 77,768                                 |   |   | — |   |
|   | Corporate debt securities                   | 11,650                                                 |    |                                                                            | — |                                                  |    | 11,650                                 |   |   | — |   |
|   | Collateralized debt obligations             | 586                                                    |    |                                                                            | — |                                                  |    | —                                |   |   | 586     |   |
|   | Total available for sale debt securities    | 416,048                                                |    |                                                                            | — |                                                  |    | 415,462                                |   |   | 586     |   |
|   | Available for sale equity securities:       |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   | Financial services industry                 | 1,420                                                  |    |                                                                            | 1,420   |                                                  |    | —                                |   |   | — |   |
|   | Total available for sale equity securities: | 1,420                                                  |    |                                                                            | 1,420   |                                                  |    | —                                |   |   | — |   |
|   | Total securities available for sale         | $                                                      | 417,468 |                                                                            |    | $                                                     | 1,420   |                                   |   | $      | 415,462 |   |   | $ | 586     |   |
|   |                                        |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   |                                        |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   |                                        | Fair Value Measurement at December 31, 2009 Using |
|   | (in thousands)                              | Total                                                  |    | Quoted Prices inActive Markets forIdentical Assets(Level 1)           |    | Significant OtherObservable Inputs(Level 2) |    | SignificantUnobservableInputs(Level 3) |
|   | Assets:                                     |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   | Available for sale debt securities:         |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   | U.S. Government agencies and corporations   | $                                                      | 81,191  |                                                                            |    | $                                                     | — |                                   |   | $      | 81,191  |   |   | $ | — |   |
|   | State and policitical subdivisions          | 155,224                                                |    |                                                                            | — |                                                  |    | 155,224                                |   |   | — |   |
|   | Residential mortgage-backed securities      | 108,576                                                |    |                                                                            | — |                                                  |    | 108,576                                |   |   | — |   |
|   | Corporate debt securities                   | 15,305                                                 |    |                                                                            | — |                                                  |    | 15,305                                 |   |   | — |   |
|   | Collateralized debt obligations             | 857                                                    |    |                                                                            | — |                                                  |    | —                                |   |   | 857     |   |
|   | Total available for sale debt securities    | 361,153                                                |    |                                                                            | — |                                                  |    | 360,296                                |   |   | 857     |   |
|   | Available for sale equity securities:       |                                                   |    |                                                                            |    |                                                  |    |                                   |
|   | Financial services industry                 | 1,750                                                  |    |                                                                            | 1,750   |                                                  |    | —                                |   |   | — |   |
|   | Total available for sale equity securities: | 1,750                                                  |    |                                                                            | 1,750   |                                                  |    | —                                |   |   | — |   |
|   | Total securities available for sale         | $                                                      | 362,903 |                                                                            |    | $                                                     | 1,750   |                                   |   | $      | 360,296 |   |   | $ | 857     |   |

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|        |                                               |              |                               |        |        |        |
|--------|-----------------------------------------------|--------------|-------------------------------|--------|--------|--------|
|   |                                          |    | CollateralizedDebtObligations |   |
|   | (in thousands)                                |    |                          |   |
|   | Level 3 fair value at December 31, 2009  |    | $                             | 857    |   |   |
|   | Transfers into Level 3                        |    | —                       |   |   |
|   | Transfers out of Level 3                      |    | —                       |   |   |
|   | Total gains (losses):                         |    |                          |   |
|   | Included in earnings                          |    | (189                          | )      |   |
|   | Included in other comprehensive income        |    | (82                           | )      |   |
|   | Purchases, issuances, sales, and settlements: |    |                          |   |
|   | Purchases                                     |    | —                       |   |   |
|   | Issuances                                     |    | —                       |   |   |
|   | Sales                                         |    | —                       |   |   |
|   | Settlements                                   |    | —                       |   |   |
|   | Level 3 fair value at June 30, 2010           |    | $                             | 586    |   |   |

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|        |                                     |                                                         |              |                                                                                  |              |                                                  |              |                                        |              |              |         |        |              |   |       |        |
|--------|-------------------------------------|---------------------------------------------------------|--------------|----------------------------------------------------------------------------------|--------------|--------------------------------------------------|--------------|----------------------------------------|--------------|--------------|---------|--------|--------------|---|-------|--------|
|   |                                | Fair Value Measurements at June 30, 2010 Using          |
|   | (in thousands)                      | Total                                                   |    | Quoted Prices inActive Markets  forIdentical Assets(Level 1) |    | Significant  OtherObservableInputs(Level 2) |    | SignificantUnobservableInputs(Level 3) |
|   | Assets:                             |                                                    |    |                                                                             |    |                                             |    |                                   |
|   | Collateral dependent impaired loans | $                                                       | 998          |                                                                             |    | $                                                | —      |                                   |    | $            | — |   |    | $ | 998   |   |
|   | Loans held for sale                 | 1,217                                                   |         |                                                                        | —      |                                             |    | 1,217                                  |         |    | — |   |
|   | Federal Home Loan Bank stock        | 9,636                                                   |         |                                                                        | —      |                                             |    | —                                |         |    | 9,636   |   |
|   | Other real estate owned             | 2,634                                                   |         |                                                                        | —      |                                             |    | —                                |         |    | 2,634   |   |
|   |                                |                                                    |         |                                                                             |         |                                             |         |                                   |
|   |                                |                                                    |         |                                                                             |         |                                             |         |                                   |
|   |                                | Fair Value Measurements at December 31, 2009 Using |
|   | (in thousands)                      | Total                                                   |    | Quoted Prices inActive Markets forIdentical  Assets(Level 1)      |    | Significant  OtherObservableInputs(Level 2) |    | SignificantUnobservableInputs(Level 3) |
|   | Assets:                             |                                                    |    |                                                                             |    |                                             |    |                                   |
|   | Collateral dependent impaired loans | $                                                       | 2,818        |                                                                             |    | $                                                | —      |                                   |    | $            | — |   |    | $ | 2,818 |   |
|   | Loans held for sale                 | 1,208                                                   |         |                                                                        | —      |                                             |    | 1,208                                  |         |    | — |   |
|   | Federal Home Loan Bank stock        | 8,973                                                   |         |                                                                        | —      |                                             |    | —                                |         |    | 8,973   |   |
|   | Other real estate owned             | 3,635                                                   |         |                                                                        | —      |                                             |    | —                                |         |    | 3,635   |   |

|        |                                                                            |                |              |                          |              |                |              |                          |              |              |           |        |              |   |        |        |
|--------|----------------------------------------------------------------------------|----------------|--------------|--------------------------|--------------|----------------|--------------|--------------------------|--------------|--------------|-----------|--------|--------------|---|--------|--------|
|   |                                                                       | June 30, 2010  |    | December 31, 2009   |
|   |                                                                       | CarryingAmount |    | EstimatedFair Value |    | CarryingAmount |    | EstimatedFair Value |
|   | (in thousands)                                                             |           |    |                     |    |           |    |                     |
|   | Financial assets:                                                          |           |    |                     |    |           |    |                     |
|   | Cash and cash equivalents                                                  | $              | 26,171       |                     |    | $              | 26,171       |                     |    | $            | 27,588    |   |    | $ | 27,588 |   |
|   | Investment securities                                                      | 422,818        |         |                | 422,902      |           |    | 370,912                  |         |    | 371,021   |   |
|   | Loans held for sale                                                        | 1,217          |         |                | 1,217        |           |    | 1,208                    |         |    | 1,208     |   |
|   | Loans, net                                                                 | 941,364        |         |                | 940,768      |           |    | 953,041                  |         |    | 953,647   |   |
|   | Loan pool participations, net                                              | 76,889         |         |                | 76,889       |           |    | 83,052                   |         |    | 83,052    |   |
|   | Other real estate owned                                                    | 2,634          |         |                | 2,634        |           |    | 3,635                    |         |    | 3,635     |   |
|   | Accrued interest receivable                                                | 9,900          |         |                | 9,900        |           |    | 11,534                   |         |    | 11,534    |   |
|   | Federal Home Loan Bank stock                                               | 9,636          |         |                | 9,636        |           |    | 8,973                    |         |    | 8,973     |   |
|   | Financial liabilities:                                                     |           |    |                     |    |           |    |                     |
|   | Deposits                                                                   | 1,195,587      |         |                | 1,198,327    |           |    | 1,179,868                |         |    | 1,185,450 |   |
|   | Federal funds purchased and securities sold under agreements to repurchase | 48,395         |         |                | 55,781       |           |    | 44,973                   |         |    | 44,973    |   |
|   | Federal Home Loan Bank borrowings                                          | 132,200        |         |                | 136,089      |           |    | 130,200                  |         |    | 133,098   |   |
|   | Long-term debt                                                             | 15,564         |         |                | 10,237       |           |    | 15,588                   |         |    | 10,070    |   |
|   | Accrued interest payable                                                   | 1,847          |         |                | 1,847        |           |    | 2,248                    |         |    | 2,248     |   |

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|        |                                                                               |                                      |         |                                    |         |        |         |         |        |         |         |        |           |        |
|--------|-------------------------------------------------------------------------------|--------------------------------------|---------|------------------------------------|---------|--------|---------|---------|--------|---------|---------|--------|-----------|--------|
|   |                                                                          | Three Months EndedJune 30, |    | Six Months EndedJune 30, |
|   |                                                                          | 2010                                 |    | 2009                               |    | 2010   |    | 2009    |
|   | (dollars in thousands)                                                        |                                 |    |                               |    |   |    |    |
|   | Amount of loans outstanding at end of period (net of unearned interest) (1)   | $                                    | 956,187 |                               |    | $      | 990,653 |    |   | 956,187 |    |   | 990,653   |   |
|   | Average amount of loans outstanding for the period (net of unearned interest) | $                                    | 957,302 |                               |    | $      | 999,576 |    |   | 958,429 |    |   | 1,007,098 |   |
|   | Allowance for loan losses at beginning of period                              | $                                    | 14,553  |                               |    | $      | 12,941  |    |   | 13,957  |    |   | 10,977    |   |
|   |                                                                          |                                 |    |                               |    |   |    |    |
|   | Charge-offs:                                                                  |                                 |    |                               |    |   |    |    |
|   | Agricultural                                                                  | 500                                  |    |                               | 58      |   |    | 1,000   |   |    | 58      |   |
|   | Commercial and financial                                                      | 567                                  |    |                               | 562     |   |    | 1,105   |   |    | 809     |   |
|   | Real estate:                                                                  |                                 |    |                               |    |   |    |    |
|   | Construction, one- to four- family residential                                | —                              |    |                               | — |   |    | — |   |    | — |   |
|   | Construction, land development and commercial                                 | 25                                   |    |                               | 95      |   |    | 25      |   |    | 95      |   |
|   | Mortgage, farmland                                                            | —                              |    |                               | 120     |   |    | — |   |    | 120     |   |
|   | Mortgage, one- to four- family first liens                                    | 50                                   |    |                               | 125     |   |    | 51      |   |    | 242     |   |
|   | Mortgage, one- to four- family junior liens                                   | 15                                   |    |                               | — |   |    | 15      |   |    | 32      |   |
|   | Mortgage, multifamily                                                         | —                              |    |                               | 5       |   |    | — |   |    | 5       |   |
|   | Mortgage, commercial                                                          | 83                                   |    |                               | 52      |   |    | 83      |   |    | 52      |   |
|   | Loans to individuals                                                          | 25                                   |    |                               | — |   |    | 66      |   |    | 58      |   |
|   | Obligations of state and political subdivisions                               | —                              |    |                               | — |   |    | — |   |    | — |   |
|   | Total charge-offs                                                             | 1,265                                |    |                               | 1,017   |   |    | 2,345   |   |    | 1,471   |   |
|   |                                                                          |                                 |    |                               |    |   |    |    |
|   | Recoveries:                                                                   |                                 |    |                               |    |   |    |    |
|   | Agricultural                                                                  | —                              |    |                               | — |   |    | 5       |   |    | 19      |   |
|   | Commercial and financial                                                      | 12                                   |    |                               | 29      |   |    | 24      |   |    | 45      |   |
|   | Real estate:                                                                  |                                 |    |                               |    |   |    |    |
|   | Construction, one- to four- family residential                                | —                              |    |                               | — |   |    | — |   |    | — |   |
|   | Construction, land development and commercial                                 | —                              |    |                               | — |   |    | — |   |    | — |   |
|   | Mortgage, farmland                                                            | —                              |    |                               | — |   |    | — |   |    | — |   |
|   | Mortgage, one- to four- family first liens                                    | 1                                    |    |                               | 3       |   |    | 2       |   |    | 9       |   |
|   | Mortgage, one- to four- family junior liens                                   | 1                                    |    |                               | 5       |   |    | 55      |   |    | 11      |   |
|   | Mortgage, multifamily                                                         | —                              |    |                               | — |   |    | — |   |    | 15      |   |
|   | Mortgage, commercial                                                          | 14                                   |    |                               | — |   |    | 108     |   |    | — |   |
|   | Loans to individuals                                                          | 7                                    |    |                               | 4       |   |    | 17      |   |    | 10      |   |
|   | Obligations of state and political subdivisions                               | —                              |    |                               | — |   |    | — |   |    | — |   |
|   | Total recoveries                                                              | 35                                   |    |                               | 41      |   |    | 211     |   |    | 109     |   |
|   | Net loans charged off                                                         | 1,230                                |    |                               | 976     |   |    | 2,134   |   |    | 1,362   |   |
|   | Provision for loan losses                                                     | 1,500                                |    |                               | 1,500   |   |    | 3,000   |   |    | 3,850   |   |
|   | Allowance for loan losses at end of period                                    | $                                    | 14,823  |                               |    | $      | 13,465  |    |   | 14,823  |    |   | 13,465    |   |
|   |                                                                          |                                 |    |                               |    |   |    |    |
|   | Net loans charged off to average loans                                        | 0.52                                 | %       |                               | 0.39    | %      |    | 0.45    | %      |    | 0.27    | %      |
|   | Allowance for loan losses to total loans at end of period                     | 1.55                                 | %       |                               | 1.36    | %      |    | 1.55    | %      |    | 1.36    | %      |

|        |     |        |                                                                                                     |
|--------|-----|--------|-----------------------------------------------------------------------------------------------------|
|   | (1) |   | Loans do not include, and the allowance for loan losses does not include, loan pool participations. |

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|        |                                                                                               |                    |        |                                |         |             |        |                                |         |        |         |        |        |   |         |        |
|--------|-----------------------------------------------------------------------------------------------|--------------------|--------|--------------------------------|---------|-------------|--------|--------------------------------|---------|--------|---------|--------|--------|---|---------|--------|
|   |                                                                                          | June 30, 2010 |   | December 31, 2009         |
|   |                                                                                          | Non-Accrual        |   | Troubled DebtRestructures |    | Non-Accrual |   | Troubled DebtRestructures |
|   | (in thousands)                                                                                |               |   |                           |    |        |   |                           |
|   | Nonperforming loans:                                                                          |               |   |                           |    |        |   |                           |
|   | Agricultural                                                                                  | $                  | 3,329  |                           |    | $           | 3,323  |                           |    | $      | 3,498   |   |   | $ | — |   |
|   | Commercial and financial                                                                      | 1,791              |   |                           | 597     |        |   | 2,386                          |    |   | 676     |   |
|   | Real estate:                                                                                  |               |   |                           |    |        |   |                           |
|   | Construction, one- to four- family residential                                                | 192                |   |                           | — |        |   | 463                            |    |   | — |   |
|   | Construction, land development and commercial                                                 | 123                |   |                           | — |        |   | —                        |    |   | 434     |   |
|   | Mortgage, farmland                                                                            | 2,853              |   |                           | 348     |        |   | 43                             |    |   | — |   |
|   | Mortgage, one- to four- family first liens                                                    | 1,730              |   |                           | 49      |        |   | 2,073                          |    |   | 49      |   |
|   | Mortgage, one- to four- family junior liens                                                   | 104                |   |                           | 51      |        |   | 157                            |    |   | — |   |
|   | Mortgage, multifamily                                                                         | —            |   |                           | — |        |   | —                        |    |   | — |   |
|   | Mortgage, commercial                                                                          | 362                |   |                           | 2,041   |        |   | 1,168                          |    |   | 1,368   |   |
|   | Loans to individuals                                                                          | 41                 |   |                           | — |        |   | 97                             |    |   | 28      |   |
|   | Obligations of state and political subdivisions                                               | —            |   |                           | — |        |   | —                        |    |   | — |   |
|   |                                                                                          | $                  | 10,525 |                           |    | $           | 6,409  |                           |    | $      | 9,885   |   |   | $ | 2,555   |   |
|   | Total impaired loans                                                                          |               |   | $                              | 16,934  |        |   |                           |    | $      | 12,440  |   |
|   |                                                                                          |               |   |                           |    |        |   |                           |
|   | 90 days or more past due and still accruing:                                                  |               |   |                           |    |        |   |                           |
|   | Agricultural                                                                                  |               |   | 716                            |    |        |   |                           | — |   |
|   | Commercial and financial                                                                      |               |   | 822                            |    |        |   |                           | 256     |   |
|   | Real estate:                                                                                  |               |   |                           |    |        |   |                           |
|   | Construction, one- to four- family residential                                                |               |   | —                        |    |        |   |                           | 138     |   |
|   | Construction, land development and commercial                                                 |               |   | 16                             |    |        |   |                           | — |   |
|   | Mortgage, farmland                                                                            |               |   | 309                            |    |        |   |                           | — |   |
|   | Mortgage, one- to four- family first liens                                                    |               |   | 858                            |    |        |   |                           | 927     |   |
|   | Mortgage, one- to four- family junior liens                                                   |               |   | 140                            |    |        |   |                           | 85      |   |
|   | Mortgage, multifamily                                                                         |               |   | —                        |    |        |   |                           | — |   |
|   | Mortgage, commercial                                                                          |               |   | —                        |    |        |   |                           | — |   |
|   | Loans to individuals                                                                          |               |   | 93                             |    |        |   |                           | 33      |   |
|   | Obligations of state and political subdivisions                                               |               |   | —                        |    |        |   |                           | — |   |
|   | Total 90 days or more past due and still accruing                                             |               |   | $                              | 2,954   |        |   |                           |    | $      | 1,439   |   |
|   | Total nonperforming loans                                                                     |               |   | $                              | 19,888  |        |   |                           |    | $      | 13,879  |   |
|   |                                                                                          |               |   |                           |    |        |   |                           |
|   | Other real estate owned and repossessed assets                                                |               |   | 2,634                          |    |        |   |                           | 3,635   |   |
|   |                                                                                          |               |   |                           |    |        |   |                           |
|   | Total nonperforming loans and nonperforming other assets                                      |               |   | $                              | 22,522  |        |   |                           |    | $      | 17,514  |   |
|   |                                                                                          |               |   |                           |    |        |   |                           |
|   | Ratios:                                                                                       |               |   |                           |    |        |   |                           |
|   | Nonperforming loans to loans, before allowance for loan losses                                |               |   | 2.08                           | %       |        |   |                           | 1.44    | %      |
|   | Nonperforming loans and nonperforming other assets to loans, before allowance for loan losses |               |   | 2.36                           | %       |        |   |                           | 1.81    | %      |

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|                                                           |                                       |        |        |           |        |     |        |
|-----------------------------------------------------------|---------------------------------------|--------|--------|-----------|--------|-----|--------|
|                                                      | Three Months Ended June 30, |
| ($ amounts in thousands)                                  | 2010                                  |   | 2009   |
| Net Income                                                | $                                     | 2,605  |   |      | $      | 783 |   |
| Average Assets                                            | 1,561,819                             |   |   | 1,567,387 |   |
| Average Shareholders' Equity                              | 155,088                               |   |   | 146,974   |   |
| Return on Average Assets                                  | 0.67                                  | %      |   | 0.20      | %      |
| Return on Average Shareholders' Equity                    | 6.74                                  | %      |   | 2.14      | %      |
| Return on Average Tangible Common Equity                  | 7.52                                  | %      |   | 1.92      | %      |
| Total Equity to Assets (end of period)                    | 10.07                                 | %      |   | 9.38      | %      |
| Tangible Common Equity to Tangible Assets (end of period) | 8.37                                  | %      |   | 7.63      | %      |

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|                                              |                                                              |         |        |         |   |         |        |
|----------------------------------------------|--------------------------------------------------------------|---------|--------|---------|---|---------|--------|
|                                         | For the Three Months Ended June 30, |
| (in thousands)                               | 2010                                                         |    | 2009   |
| Tangible Common Equity:                      |                                                         |    |   |
| Average total shareholders' equity           | $                                                            | 155,088 |   |    | $ | 146,974 |   |
| Less:  Average preferred stock               | (15,724                                                      | )       |   | (15,656 | ) |
| Average goodwill and intangibles             | (11,965                                                      | )       |   | (13,032 | ) |
| Average tangible common equity               | $                                                            | 127,399 |   |    | $ | 118,286 |   |
|                                         |                                                         |    |   |
| Net income available to common shareholders  | $                                                            | 2,388   |   |    | $ | 567     |   |
|                                         |                                                         |    |   |
| Return on average tangible common equity (1) | 7.52                                                         | %       |   | 1.92    | % |
| (1)   Annualized                             |                                                         |    |   |

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|                                                   |                             |           |                        |        |                   |        |                |         |                        |           |                   |        |           |        |        |      |        |        |        |      |   |
|---------------------------------------------------|-----------------------------|-----------|------------------------|--------|-------------------|--------|----------------|---------|------------------------|-----------|-------------------|--------|-----------|--------|--------|------|--------|--------|--------|------|---|
|                                              | Three Months Ended June 30, |
|                                              | 2010                        |      | 2009                   |
|                                              | AverageBalance              |      | InterestIncome/Expense |   | AverageRate/Yield |   | AverageBalance |    | InterestIncome/Expense |      | AverageRate/Yield |
| (dollars in thousands)                            |                        |      |                   |   |              |   |           |    |                   |      |              |
| Average earning assets:                           |                        |      |                   |   |              |   |           |    |                   |      |              |
| Loans (tax equivalent) (1)(2)(3)                  | $                           | 957,302   |                   |   | $                 | 13,841 |           |    | 5.80                   | %         |              | $      | 999,576   |   |   | $    | 14,881 |   |   | 5.97 | % |
| Loan pool participations (4)                      | 81,499                      |      |                   | 909    |              |   | 4.47           |    |                   | 94,548    |              |   | 664       |   |   | 2.82 |   |
| Investment securities:                            |                        |      |                   |   |              |   |           |    |                   |      |              |
| Taxable investments                               | 295,687                     |      |                   | 2,445  |              |   | 3.32           |    |                   | 217,227   |              |   | 2,147     |   |   | 3.96 |   |
| Tax exempt investments (2)                        | 112,257                     |      |                   | 1,494  |              |   | 5.34           |    |                   | 112,704   |              |   | 1,537     |   |   | 5.47 |   |
| Total investment securities                       | 407,944                     |      |                   | 3,939  |              |   | 3.87           |    |                   | 329,931   |              |   | 3,684     |   |   | 4.64 |   |
| Federal funds sold and interest-bearing balances  | 23,294                      |      |                   | 21     |              |   | 0.36           |    |                   | 57,926    |              |   | 30        |   |   | 0.21 |   |
| Total earning assets                              | $                           | 1,470,039 |                   |   | $                 | 18,710 |           |    | 5.11                   | %         |              | $      | 1,481,981 |   |   | $    | 19,259 |   |   | 5.21 | % |
|                                              |                        |      |                   |   |              |   |           |    |                   |      |              |
| Cash and due from banks                           | 19,061                      |      |                   |   |              |   |           | 23,521  |                   |      |              |   |      |
| Premises and equipment                            | 28,423                      |      |                   |   |              |   |           | 29,932  |                   |      |              |   |      |
| Allowance for loan losses                         | (17,053                     | )         |                   |   |              |   |           | (15,261 | )                      |      |              |   |      |
| Other assets                                      | 61,349                      |      |                   |   |              |   |           | 47,214  |                   |      |              |   |      |
| Total assets                                      | $                           | 1,561,819 |                   |   |              |   |           |    | $                      | 1,567,387 |              |   |      |   |   |
|                                              |                        |      |                   |   |              |   |           |    |                   |      |              |
| Average interest-bearing liabilities:             |                        |      |                   |   |              |   |           |    |                   |      |              |
| Savings and interest-bearing demand deposits      | $                           | 493,198   |                   |   | $                 | 1,176  |           |    | 0.96                   | %         |              | $      | 467,095   |   |   | $    | 1,298  |   |   | 1.11 | % |
| Certificates of deposit                           | 571,702                     |      |                   | 3,373  |              |   | 2.37           |    |                   | 589,504   |              |   | 4,497     |   |   | 3.06 |   |
| Total deposits                                    | 1,064,900                   |      |                   | 4,549  |              |   | 1.71           |    |                   | 1,056,599 |              |   | 5,795     |   |   | 2.20 |   |
| Federal funds purchased and repurchase agreements | 39,268                      |      |                   | 71     |              |   | 0.73           |    |                   | 46,556    |              |   | 127       |   |   | 1.09 |   |
| Federal Home Loan Bank borrowings                 | 132,755                     |      |                   | 1,183  |              |   | 3.57           |    |                   | 156,543   |              |   | 1,666     |   |   | 4.27 |   |
| Long-term debt and other                          | 16,409                      |      |                   | 163    |              |   | 3.98           |    |                   | 16,548    |              |   | 194       |   |   | 4.70 |   |
| Total interest-bearing liabilities                | $                           | 1,253,332 |                   |   | $                 | 5,966  |           |    | 1.91                   | %         |              | $      | 1,276,246 |   |   | $    | 7,782  |   |   | 2.45 | % |
|                                              |                        |      |                   |   |              |   |           |    |                   |      |              |
| Net interest spread                               |                        |      |                   |   | 3.20              | %      |           |    |                   |      |              | 2.77   | %         |
|                                              |                        |      |                   |   |              |   |           |    |                   |      |              |
| Demand deposits                                   | 137,489                     |      |                   |   |              |   |           | 131,157 |                   |      |              |   |      |
| Other liabilities                                 | 15,910                      |      |                   |   |              |   |           | 13,010  |                   |      |              |   |      |
| Shareholders' equity                              | 155,088                     |      |                   |   |              |   |           | 146,974 |                   |      |              |   |      |
| Total liabilities and shareholders' equity        | $                           | 1,561,819 |                   |   |              |   |           |    | $                      | 1,567,387 |              |   |      |   |   |
|                                              |                        |      |                   |   |              |   |           |    |                   |      |              |
| Interest income/earning assets (2)                | $                           | 1,470,039 |                   |   | $                 | 18,710 |           |    | 5.11                   | %         |              | $      | 1,481,981 |   |   | $    | 19,259 |   |   | 5.21 | % |
| Interest expense/earning assets                   | $                           | 1,470,039 |                   |   | $                 | 5,966  |           |    | 1.63                   | %         |              | $      | 1,481,981 |   |   | $    | 7,782  |   |   | 2.10 | % |
| Net interest margin (2)(5)                        |                        |      | $                      | 12,744 |              |   | 3.48           | %       |                   |      |              | $      | 11,477    |   |   | 3.11 | %      |
|                                              |                        |      |                   |   |              |   |           |    |                   |      |              |
| Non-GAAP to GAAP Reconciliation:                  |                        |      |                   |   |              |   |           |    |                   |      |              |
| Tax Equivalent Adjustment:                        |                        |      |                   |   |              |   |           |    |                   |      |              |
| Loans                                             |                        |      | $                      | 80     |              |   |           |    |                   |      | $                 | 96     |      |   |   |
| Securities                                        |                        |      | 508                    |   |              |   |           |    |                   | 537       |              |   |      |
| Total tax equivalent adjustment                   |                        |      | 588                    |   |              |   |           |    |                   | 633       |              |   |      |
| Net Interest Income                               |                        |      | $                      | 12,156 |              |   |           |    |                   |      | $                 | 10,844 |      |   |   |

|        |     |                                                                                                      |
|--------|-----|------------------------------------------------------------------------------------------------------|
|   | (1) | Loan fees included in interest income are not material.                                              |
|   | (2) | Computed on a tax-equivalent basis, assuming a federal income tax rate of 34%.                       |
|   | (3) | Non-accrual loans have been included in average loans, net of unearned discount.                     |
|   | (4) | Includes interest income and discount realized on loan pool participations.                          |
|   | (5) | Net interest margin is tax-equivalent net interest income as a percentage of average earning assets. |

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Table of Contents

|                                                              |                                                                   |        |            |        |        |        |        |        |   |        |        |
|--------------------------------------------------------------|-------------------------------------------------------------------|--------|------------|--------|--------|--------|--------|--------|---|--------|--------|
|                                                         | Three Months Ended June 30,                                       |
|                                                         | 2010 Compared to 2009 Change due to |
|                                                         | Volume                                                            |   | Rate/Yield |   | Net    |
| (in thousands)                                               |                                                              |   |       |   |   |
| Increase (decrease) in interest income:                      |                                                              |   |       |   |   |
| Loans (tax equivalent)                                       | $                                                                 | (619   | )          |   | $      | (421   | )      |   | $ | (1,040 | )      |
| Loan pool participations                                     | (75                                                               | )      |       | 320    |   |   | 245    |   |
| Investment securities:                                       |                                                              |   |       |   |   |
| Taxable investments                                          | 544                                                               |   |       | (246   | )      |   | 298    |   |
| Tax exempt investments                                       | (6                                                                | )      |       | (37    | )      |   | (43    | )      |
|                                                         |                                                              |   |       |   |   |
| Total investment securities                                  | 538                                                               |   |       | (283   | )      |   | 255    |   |
|                                                         |                                                              |   |       |   |   |
| Federal funds sold and interest-bearing balances             | 38                                                                |   |       | (47    | )      |   | (9     | )      |
|                                                         |                                                              |   |       |   |   |
| Change in interest income                                    | (118                                                              | )      |       | (431   | )      |   | (549   | )      |
|                                                         |                                                              |   |       |   |   |
| Increase (decrease) in interest expense:                     |                                                              |   |       |   |   |
| Savings and interest-bearing demand deposits                 | 79                                                                |   |       | (201   | )      |   | (122   | )      |
| Certificates of deposit                                      | (132                                                              | )      |       | (992   | )      |   | (1,124 | )      |
|                                                         |                                                              |   |       |   |   |
| Total deposits                                               | (53                                                               | )      |       | (1,193 | )      |   | (1,246 | )      |
|                                                         |                                                              |   |       |   |   |
| Federal funds purchased and repurchase agreements            | (18                                                               | )      |       | (38    | )      |   | (56    | )      |
| Federal Home Loan Bank borrowings                            | (233                                                              | )      |       | (250   | )      |   | (483   | )      |
| Other long-term debt                                         | (2                                                                | )      |       | (29    | )      |   | (31    | )      |
|                                                         |                                                              |   |       |   |   |
| Change in interest expense                                   | (306                                                              | )      |       | (1,510 | )      |   | (1,816 | )      |
|                                                         |                                                              |   |       |   |   |
| Increase in net interest income                              | $                                                                 | 188    |       |   | $      | 1,079  |   |   | $ | 1,267  |   |
|                                                         |                                                              |   |       |   |   |
| Percentage increase in net interest income over prior period |                                                              |   |       |   | 11.04  | %      |

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Table of Contents

|                                                   |                             |        |        |              |               |              |                                        |              |      |   |
|---------------------------------------------------|-----------------------------|--------|--------|--------------|---------------|--------------|----------------------------------------|--------------|------|---|
|                                              | Three Months Ended June 30, |
|                                              | 2010                        |   | 2009   |    | % Change |
| (dollars in thousands)                            |                        |   |   |    |          |
| Trust and investment fees                         | $                           | 1,214  |   |         | $             | 964          |                                   |    | 25.9 | % |
| Service charges and fees on deposit accounts      | 1,034                       |   |   | 990          |          |    | 4.4                                    |         |
| Mortgage origination and loan servicing fees      | 525                         |   |   | 860          |          |    | (39.0                                  | )            |
| Other service charges, commissions and fees       | 576                         |   |   | 510          |          |    | 12.9                                   |         |
| Bank owned life insurance income                  | 147                         |   |   | 198          |          |    | (25.8                                  | )            |
| Impairment losses on investment securities, net   | —                     |   |   | (614         | )             |    | (100.0                                 | )            |
| Gain on sale of available for sale securities     | 233                         |   |   | 1            |          |    | NM       |
| Loss on sale of premises and equipment            | (204                        | )      |   | 5            |          |    | NM       |
| Total noninterest income                          | $                           | 3,525  |   |         | $             | 2,914        |                                   |    | 21.0 | % |
|                                              |                        |   |   |         |          |
| NM - Percentage change not considered meaningful. |                        |   |   |         |          |

|                                     |                             |              |              |              |               |              |        |              |      |    |
|-------------------------------------|-----------------------------|--------------|--------------|--------------|---------------|--------------|--------|--------------|------|----|
|                                | Three Months Ended June 30, |
|                                | 2010                        |    | 2009         |    | % Change |
| (dollars in thousands)              |                        |    |         |    |          |
| Salaries and employee benefits      | $                           | 5,691        |         |    | $             | 5,847        |   |    | (2.7 | )% |
| Net occupancy and equipment expense | 1,630                       |         |    | 1,647        |          |    | (1.0   | )            |
| Professional fees                   | 659                         |         |    | 842          |          |    | (21.7  | )            |
| Data processing expense             | 414                         |         |    | 491          |          |    | (15.7  | )            |
| FDIC insurance expense              | 705                         |         |    | 1,055        |          |    | (33.2  | )            |
| Other operating expense             | 1,563                       |         |    | 1,443        |          |    | 8.3    |         |
| Total noninterest expense           | $                           | 10,662       |         |    | $             | 11,325       |   |    | (5.9 | )% |

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Table of Contents

|                                                           |                                |              |              |              |        |       |        |
|-----------------------------------------------------------|--------------------------------|--------------|--------------|--------------|--------|-------|--------|
|                                                 | Six Months Ended June 30, |
| ($ amounts in thousands)                                  | 2010                           |    | 2009         |
| Net Income                                                | $                              | 4,609        |         |    | $      | 1,959 |   |
| Average Assets                                            | 1,544,560                      |         |    | 1,536,153    |   |
| Average Shareholders' Equity                              | 153,950                        |         |    | 144,080      |   |
| Return on Average Assets                                  | 0.60                           | %            |    | 0.26         | %      |
| Return on Average Shareholders' Equity                    | 6.04                           | %            |    | 2.74         | %      |
| Return on Average Tangible Common Equity                  | 6.67                           | %            |    | 2.74         | %      |
| Total Equity to Assets (end of period)                    | 10.07                          | %            |    | 9.38         | %      |
| Tangible Common Equity to Tangible Assets (end of period) | 8.37                           | %            |    | 7.63         | %      |

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Table of Contents

|                                              |                                                            |         |        |         |   |         |        |
|----------------------------------------------|------------------------------------------------------------|---------|--------|---------|---|---------|--------|
|                                         | For the Six Months Ended June 30, |
| (in thousands)                               | 2010                                                       |    | 2009   |
| Tangible Common Equity:                      |                                                       |    |   |
| Average total shareholders' equity           | $                                                          | 153,950 |   |    | $ | 144,079 |   |
| Less:  Average preferred stock               | (15,716                                                    | )       |   | (12,635 | ) |
| Average goodwill and intangibles             | (12,071                                                    | )       |   | (13,169 | ) |
| Average tangible common equity               | $                                                          | 126,163 |   |    | $ | 118,275 |   |
|                                         |                                                       |    |   |
| Net income available to common shareholders  | $                                                          | 4,175   |   |    | $ | 1,612   |   |
|                                         |                                                       |    |   |
| Return on average tangible common equity (1) | 6.67                                                       | %       |   | 2.74    | % |
| (1)   Annualized                             |                                                       |    |   |

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Table of Contents

|                                                   |                           |           |                        |        |                   |        |                |         |                        |           |                   |        |           |        |        |      |        |        |        |      |   |
|---------------------------------------------------|---------------------------|-----------|------------------------|--------|-------------------|--------|----------------|---------|------------------------|-----------|-------------------|--------|-----------|--------|--------|------|--------|--------|--------|------|---|
|                                              | Six Months Ended June 30, |
|                                              | 2010                      |      | 2009                   |
|                                              | AverageBalance            |      | InterestIncome/Expense |   | AverageRate/Yield |   | AverageBalance |    | InterestIncome/Expense |      | AverageRate/Yield |
| (dollars in thousands)                            |                      |      |                   |   |              |   |           |    |                   |      |              |
| Average earning assets:                           |                      |      |                   |   |              |   |           |    |                   |      |              |
| Loans (tax equivalent) (1)(2)(3)                  | $                         | 958,429   |                   |   | $                 | 27,630 |           |    | 5.81                   | %         |              | $      | 1,007,098 |   |   | $    | 29,889 |   |   | 5.98 | % |
| Loan pool participations (4)                      | 82,876                    |      |                   | 1,808  |              |   | 4.40           |    |                   | 95,634    |              |   | 1,679     |   |   | 3.54 |   |
| Investment securities:                            |                      |      |                   |   |              |   |           |    |                   |      |              |
| Taxable investments                               | 278,119                   |      |                   | 4,670  |              |   | 3.39           |    |                   | 199,070   |              |   | 4,122     |   |   | 4.18 |   |
| Tax exempt investments (2)                        | 115,257                   |      |                   | 3,017  |              |   | 5.28           |    |                   | 111,517   |              |   | 3,030     |   |   | 5.48 |   |
| Total investment securities                       | 393,376                   |      |                   | 7,687  |              |   | 3.94           |    |                   | 310,587   |              |   | 7,152     |   |   | 4.64 |   |
| Federal funds sold and interest-bearing balances  | 17,412                    |      |                   | 31     |              |   | 0.36           |    |                   | 37,689    |              |   | 39        |   |   | 0.21 |   |
| Total earning assets                              | $                         | 1,452,093 |                   |   | $                 | 37,156 |           |    | 5.16                   | %         |              | $      | 1,451,008 |   |   | $    | 38,759 |   |   | 5.39 | % |
|                                              |                      |      |                   |   |              |   |           |    |                   |      |              |
| Cash and due from banks                           | 19,507                    |      |                   |   |              |   |           | 24,196  |                   |      |              |   |      |
| Premises and equipment                            | 28,682                    |      |                   |   |              |   |           | 29,561  |                   |      |              |   |      |
| Allowance for loan losses                         | (16,804                   | )         |                   |   |              |   |           | (14,681 | )                      |      |              |   |      |
| Other assets                                      | 61,082                    |      |                   |   |              |   |           | 46,069  |                   |      |              |   |      |
| Total assets                                      | $                         | 1,544,560 |                   |   |              |   |           |    | $                      | 1,536,153 |              |   |      |   |   |
|                                              |                      |      |                   |   |              |   |           |    |                   |      |              |
| Average interest-bearing liabilities:             |                      |      |                   |   |              |   |           |    |                   |      |              |
| Savings and interest-bearing demand deposits      | $                         | 480,835   |                   |   | $                 | 2,282  |           |    | 0.96                   | %         |              | $      | 451,076   |   |   | $    | 2,497  |   |   | 1.12 | % |
| Certificates of deposit                           | 570,376                   |      |                   | 6,883  |              |   | 2.43           |    |                   | 576,156   |              |   | 8,985     |   |   | 3.14 |   |
| Total deposits                                    | 1,051,211                 |      |                   | 9,165  |              |   | 1.76           |    |                   | 1,027,232 |              |   | 11,482    |   |   | 2.25 |   |
| Federal funds purchased and repurchase agreements | 39,961                    |      |                   | 148    |              |   | 0.75           |    |                   | 48,755    |              |   | 261       |   |   | 1.08 |   |
| Federal Home Loan Bank borrowings                 | 130,733                   |      |                   | 2,390  |              |   | 3.69           |    |                   | 157,924   |              |   | 2,582     |   |   | 3.30 |   |
| Long-term debt and other                          | 16,427                    |      |                   | 324    |              |   | 3.98           |    |                   | 16,569    |              |   | 383       |   |   | 4.66 |   |
| Total interest-bearing liabilities                | $                         | 1,238,332 |                   |   | $                 | 12,027 |           |    | 1.96                   | %         |              | $      | 1,250,480 |   |   | $    | 14,708 |   |   | 2.37 | % |
|                                              |                      |      |                   |   |              |   |           |    |                   |      |              |
| Net interest spread (2)                           |                      |      |                   |   | 3.20              | %      |           |    |                   |      |              | 3.01   | %         |
|                                              |                      |      |                   |   |              |   |           |    |                   |      |              |
| Demand deposits                                   | 136,820                   |      |                   |   |              |   |           | 130,993 |                   |      |              |   |      |
| Other liabilities                                 | 15,458                    |      |                   |   |              |   |           | 10,601  |                   |      |              |   |      |
| Shareholders' equity                              | 153,950                   |      |                   |   |              |   |           | 144,079 |                   |      |              |   |      |
| Total liabilities and shareholders' equity        | $                         | 1,544,560 |                   |   |              |   |           |    | $                      | 1,536,153 |              |   |      |   |   |
|                                              |                      |      |                   |   |              |   |           |    |                   |      |              |
| Interest income/earning assets (2)                | $                         | 1,452,093 |                   |   | $                 | 37,156 |           |    | 5.16                   | %         |              | $      | 1,451,008 |   |   | $    | 38,759 |   |   | 5.39 | % |
| Interest expense/earning assets                   | $                         | 1,452,093 |                   |   | $                 | 12,027 |           |    | 1.67                   | %         |              | $      | 1,451,008 |   |   | $    | 14,708 |   |   | 2.04 | % |
| Net interest margin (2)(5)                        |                      |      | $                      | 25,129 |              |   | 3.49           | %       |                   |      |              | $      | 24,051    |   |   | 3.34 | %      |
|                                              |                      |      |                   |   |              |   |           |    |                   |      |              |
| Non-GAAP to GAAP Reconciliation:                  |                      |      |                   |   |              |   |           |    |                   |      |              |
| Tax Equivalent Adjustment:                        |                      |      |                   |   |              |   |           |    |                   |      |              |
| Loans                                             |                      |      | $                      | 165    |              |   |           |    |                   |      | $                 | 193    |      |   |   |
| Securities                                        |                      |      | 1,041                  |   |              |   |           |    |                   | 1,060     |              |   |      |
| Total tax equivalent adjustment                   |                      |      | 1,206                  |   |              |   |           |    |                   | 1,253     |              |   |      |
| Net Interest Income                               |                      |      | $                      | 23,923 |              |   |           |    |                   |      | $                 | 22,798 |      |   |   |

|        |     |                                                                                                      |
|--------|-----|------------------------------------------------------------------------------------------------------|
|   | (1) | Loan fees included in interest income are not material.                                              |
|   | (2) | Computed on a tax-equivalent basis, assuming a federal income tax rate of 34%.                       |
|   | (3) | Non-accrual loans have been included in average loans, net of unearned discount.                     |
|   | (4) | Includes interest income and discount realized on loan pool participations.                          |
|   | (5) | Net interest margin is tax-equivalent net interest income as a percentage of average earning assets. |

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Table of Contents

|                                                              |                                                                   |        |            |        |        |        |        |        |   |        |        |
|--------------------------------------------------------------|-------------------------------------------------------------------|--------|------------|--------|--------|--------|--------|--------|---|--------|--------|
|                                                         | Six Months Ended June 30,                                         |
|                                                         | 2010 Compared to 2009 Change due to |
|                                                         | Volume                                                            |   | Rate/Yield |   | Net    |
| (in thousands)                                               |                                                              |
| Increase (decrease) in interest income:                      |                                                              |   |       |   |   |
| Loans (tax equivalent)                                       | $                                                                 | (1,418 | )          |   | $      | (841   | )      |   | $ | (2,259 | )      |
| Loan pool participations                                     | (158                                                              | )      |       | 287    |   |   | 129    |   |
| Investment securities:                                       |                                                              |   |       |   |   |
| Taxable investments                                          | 1,046                                                             |   |       | (498   | )      |   | 548    |   |
| Tax exempt investments                                       | 142                                                               |   |       | (155   | )      |   | (13    | )      |
|                                                         |                                                              |   |       |   |   |
| Total investment securities                                  | 1,188                                                             |   |       | (653   | )      |   | 535    |   |
|                                                         |                                                              |   |       |   |   |
| Federal funds sold and interest-bearing balances             | 24                                                                |   |       | (32    | )      |   | (8     | )      |
|                                                         |                                                              |   |       |   |   |
| Change in interest income                                    | (364                                                              | )      |       | (1,239 | )      |   | (1,603 | )      |
|                                                         |                                                              |   |       |   |   |
| Increase (decrease) in interest expense:                     |                                                              |   |       |   |   |
| Savings and interest-bearing demand deposits                 | 185                                                               |   |       | (400   | )      |   | (215   | )      |
| Certificates of deposit                                      | (89                                                               | )      |       | (2,013 | )      |   | (2,102 | )      |
|                                                         |                                                              |   |       |   |   |
| Total deposits                                               | 96                                                                |   |       | (2,413 | )      |   | (2,317 | )      |
|                                                         |                                                              |   |       |   |   |
| Federal funds purchased and repurchase agreements            | (42                                                               | )      |       | (71    | )      |   | (113   | )      |
| Federal Home Loan Bank borrowings                            | (612                                                              | )      |       | 420    |   |   | (192   | )      |
| Other long-term debt                                         | (3                                                                | )      |       | (56    | )      |   | (59    | )      |
|                                                         |                                                              |   |       |   |   |
| Change in interest expense                                   | (561                                                              | )      |       | (2,120 | )      |   | (2,681 | )      |
|                                                         |                                                              |   |       |   |   |
| Increase in net interest income                              | $                                                                 | 197    |       |   | $      | 881    |   |   | $ | 1,078  |   |
|                                                         |                                                              |   |       |   |   |
| Percentage increase in net interest income over prior period |                                                              |   |       |   | 4.48   | %      |

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Table of Contents

|                                                   |                           |        |        |              |               |              |                                        |              |      |   |
|---------------------------------------------------|---------------------------|--------|--------|--------------|---------------|--------------|----------------------------------------|--------------|------|---|
|                                              | Six Months Ended June 30, |
|                                              | 2010                      |   | 2009   |    | % Change |
| (dollars in thousands)                            |                      |   |   |    |          |
| Trust and investment fees                         | $                         | 2,448  |   |         | $             | 2,071        |                                   |    | 18.2 | % |
| Service charges and fees on deposit accounts      | 1,898                     |   |   | 1,901        |          |    | (0.2                                   | )            |
| Mortgage origination and loan servicing fees      | 1,025                     |   |   | 1,631        |          |    | (37.2                                  | )            |
| Other service charges, commissions and fees       | 1,160                     |   |   | 1,035        |          |    | 12.1                                   |         |
| Bank owned life insurance income                  | 314                       |   |   | 422          |          |    | (25.6                                  | )            |
| Impairment losses on investment securities, net   | (189                      | )      |   | (614         | )             |    | (69.2                                  | )            |
| Gain on sale of available for sale securities     | 470                       |   |   | 1            |          |    | NM       |
| Loss on sale of premises and equipment            | (281                      | )      |   | 5            |          |    | NM       |
| Total noninterest income                          | $                         | 6,845  |   |         | $             | 6,452        |                                   |    | 6.1  | % |
|                                              |                      |   |   |         |          |
| NM - Percentage change not considered meaningful. |                      |   |   |         |          |

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Table of Contents

|                                     |                           |              |              |              |               |              |        |              |      |    |
|-------------------------------------|---------------------------|--------------|--------------|--------------|---------------|--------------|--------|--------------|------|----|
|                                | Six Months Ended June 30, |
|                                | 2010                      |    | 2009         |    | % Change |
| (dollars in thousands)              |                      |    |         |    |          |
| Salaries and employee benefits      | $                         | 11,481       |         |    | $             | 11,600       |   |    | (1.0 | )% |
| Net occupancy and equipment expense | 3,406                     |         |    | 3,354        |          |    | 1.6    |         |
| Professional fees                   | 1,408                     |         |    | 1,924        |          |    | (26.8  | )            |
| Data processing expense             | 871                       |         |    | 1,007        |          |    | (13.5  | )            |
| FDIC insurance expense              | 1,397                     |         |    | 1,953        |          |    | (28.5  | )            |
| Other operating expense             | 3,147                     |         |    | 3,410        |          |    | (7.7   | )            |
| Total noninterest expense           | $                         | 21,710       |         |    | $             | 23,248       |   |    | (6.6 | )% |

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Table of Contents

|                                                 |               |              |                        |              |         |              |                      |        |              |        |              |       |   |
|-------------------------------------------------|---------------|--------------|------------------------|--------------|---------|--------------|----------------------|--------|--------------|--------|--------------|-------|---|
|                                            | June 30, 2010 |         | December 31, 2009 |
|                                            | Balance       |    | % of Total   |         | Balance |    | % of Total |
| (in thousands)                                  |          |    |                   |         |    |    |                 |
| Agricultural                                    | $             | 89,748       |                   |    | 9.4     | %            |                 | $      | 92,727       |   |    | 9.6   | % |
| Commercial and financial                        | 201,407       |         |              | 21.1         |    |         | 203,539              |   |    | 21.0   |         |
| Real estate:                                    |          |    |                   |         |    |    |                 |
| Construction, one- to four- family residential  | 20,891        |         |              | 2.2          |    |         | 20,785               |   |    | 2.1    |         |
| Construction, land development and commercial   | 53,226        |         |              | 5.6          |    |         | 58,652               |   |    | 6.1    |         |
| Mortgage, farmland                              | 85,933        |         |              | 9.0          |    |         | 88,747               |   |    | 9.2    |         |
| Mortgage, one- to four- family first liens      | 161,368       |         |              | 16.9         |    |         | 161,065              |   |    | 16.7   |         |
| Mortgage, one- to four- family junior liens     | 71,526        |         |              | 7.5          |    |         | 73,665               |   |    | 7.6    |         |
| Mortgage, multifamily                           | 31,394        |         |              | 3.3          |    |         | 32,455               |   |    | 3.4    |         |
| Mortgage, commercial                            | 202,177       |         |              | 21.1         |    |         | 196,025              |   |    | 20.3   |         |
| Loans to individuals                            | 23,735        |         |              | 2.5          |    |         | 23,262               |   |    | 2.4    |         |
| Obligations of state and political subdivisions | 14,782        |         |              | 1.5          |    |         | 16,076               |   |    | 1.7    |         |
| Total loans                                     | $             | 956,187      |                   |    | 100.0   | %            |                 | $      | 966,998      |   |    | 100.0 | % |

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Table of Contents

|                             |                     |              |                         |              |                             |              |        |              |   |        |        |
|-----------------------------|---------------------|--------------|-------------------------|--------------|-----------------------------|--------------|--------|--------------|---|--------|--------|
|                        | GrossCarryingAmount |    | AccumulatedAmortization |    | UnamortizedIntangibleAssets |
| (in thousands)              |                |    |                    |    |                        |
| June 30, 2010               |                |    |                    |    |                        |
| Other intangible assets:    |                |    |                    |    |                        |
| Insurance agency intangible | $                   | 1,320        |                    |    | $                           | 337          |   |    | $ | 983    |   |
| Core deposit premium        | 5,433               |         |               | 2,062        |                        |    | 3,371  |         |
| Trade name intangible       | 7,040               |         |               | —      |                        |    | 7,040  |         |
| Customer list intangible    | 330                 |         |               | 63           |                        |    | 267    |         |
|                        |                |         |                    |         |                        |
| Total                       | $                   | 14,123       |                    |    | $                           | 2,462        |   |    | $ | 11,661 |   |

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|                                                             |                  |           |                           |         |        |           |        |
|-------------------------------------------------------------|------------------|-----------|---------------------------|---------|--------|-----------|--------|
|                                                        | At June 30, |      | At December 31, |
| (in thousands)                                              | 2010             |      | 2009                      |
|                                                        |             |      |                      |
| Tangible Common Equity:                                     |             |      |                      |
| Total shareholders' equity                                  | $                | 157,387   |                      |    | $      | 152,208   |   |
| Less: Preferred stock                                       | (15,733          | )         |                      | (15,699 | )      |
| Goodwill and intangibles                                    | (11,761          | )         |                      | (12,272 | )      |
|                                                        |             |      |                      |
| Tangible common equity                                      | $                | 129,893   |                      |    | $      | 124,237   |   |
|                                                        |             |      |                      |
| Tangible Assets:                                            |             |      |                      |
| Total assets                                                | $                | 1,563,548 |                      |    | $      | 1,534,783 |   |
| Less: Goodwill and intangibles                              | (11,761          | )         |                      | (12,272 | )      |
|                                                        |             |      |                      |
| Tangible assets                                             | $                | 1,551,787 |                      |    | $      | 1,522,511 |   |
|                                                        |             |      |                      |
| Tangible common equity to tangible assets                   | 8.37             | %         |                      | 8.16    | %      |
|                                                        |             |      |                      |
|                                                        |             |      |                      |
|                                                        | At June 30, |      | At December 31, |
| (in thousands)                                              | 2010             |      | 2009                      |
|                                                        |             |      |                      |
| Tier 1 capital                                              |             |      |                      |
| Total shareholders' equity                                  | $                | 157,387   |                      |    | $      | 152,208   |   |
| Plus: Long term debt (qualifying restricted core capital)   | 15,464           |      |                      | 15,464  |   |
|                                                        |             |      |                      |
| Less: Net unrealized gains on securities available for sale | (3,259           | )         |                      | (1,505  | )      |
| Disallowed goodwill and intangibles                         | (11,795          | )         |                      | (12,286 | )      |
|                                                        |             |      |                      |
| Tier 1 capital                                              | $                | 157,797   |                      |    | $      | 153,881   |   |
|                                                        |             |      |                      |
| Risk-weighted assets                                        | $                | 1,204,596 |                      |    | $      | 1,215,240 |   |
|                                                        |             |      |                      |
| Tier 1 capital to risk-weighted assets                      | 13.10            | %         |                      | 12.66   | %      |

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|                                                                                               |         |              |                                                  |              |                                                       |              |        |        |              |              |              |        |                 |              |                                   |              |                                   |   |  |  |
|-----------------------------------------------------------------------------------------------|---------|--------------|--------------------------------------------------|--------------|-------------------------------------------------------|--------------|--------|--------|--------------|--------------|--------------|--------|-----------------|--------------|-----------------------------------|--------------|-----------------------------------|---|--|--|
|                                                                                          | Actual  |         | Minimum Requiredfor CapitalAdequacyPurposes |         | Minimum Requiredto be Well Capitalized |
|                                                                                          | Amount  |    | Ratio                                            |         | Amount                                                |    | Ratio  |   | Amount       |    | Ratio        |
| (dollars in thousands)                                                                        |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| June 30, 2010:                                                                                |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Total risk-based capital to risk-weighted assets:                                             |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Consolidated                                                                                  | $       | 172,620      |                                             |    | 14.33                                                 | %            |   | $      | 96,368       |         |    | 8.00   | %               |         | N/A                     |    | N/A      |
| MidWestOne Bank                                                                               | 162,439 |         |                                        | 13.58        | %                                                     |         | 95,675 |   |    | 8.00         | %            |   | $               | 119,594      |                              |    | 10.00                             | % |
| Tier 1 capital to risk-weighted assets:                                                       |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Consolidated                                                                                  | 157,797 |         |                                        | 13.10        | %                                                     |         | 48,184 |   |    | 4.00         | %            |   | N/A   |    | N/A      |
| MidWestOne Bank                                                                               | 147,465 |         |                                        | 12.33        | %                                                     |         | 47,838 |   |    | 4.00         | %            |   | 71,757          |         |                         | 6.00         | %                                 |
| Tier 1 capital to average assets:                                                             |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Consolidated                                                                                  | 157,797 |         |                                        | 10.18        | %                                                     |         | 62,001 |   |    | 4.00         | %            |   | N/A   |    | N/A      |
| MidWestOne Bank                                                                               | 147,465 |         |                                        | 9.55         | %                                                     |         | 61,739 |   |    | 4.00         | %            |   | 77,174          |         |                         | 5.00         | %                                 |
|                                                                                          |    |         |                                             |         |                                                  |         |   |   |         |         |         |
| December 31, 2009:                                                                       |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Total risk-based capital to risk-weighted assets:                                             |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Consolidated                                                                                  | $       | 169,149      |                                             |    | 13.92                                                 | %            |   | $      | 97,219       |         |    | 8.00   | %               |         | N/A                     |    | N/A      |
| MidWestOne Bank                                                                               | 156,413 |         |                                        | 12.94        | %                                                     |         | 96,727 |   |    | 8.00         | %            |   | $               | 120,909      |                              |    | 10.00                             | % |
| Tier 1 capital to risk-weighted assets:                                                       |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Consolidated                                                                                  | 153,881 |         |                                        | 12.66        | %                                                     |         | 48,610 |   |    | 4.00         | %            |   | N/A   |    | N/A      |
| MidWestOne Bank                                                                               | 141,287 |         |                                        | 11.69        | %                                                     |         | 48,363 |   |    | 4.00         | %            |   | 72,545          |         |                         | 6.00         | %                                 |
| Tier 1 capital to average assets:                                                             |    |    |                                             |         |                                                  |    |   |   |         |    |         |
| Consolidated                                                                                  | 153,881 |         |                                        | 10.01        | %                                                     |         | 61,505 |   |    | 4.00         | %            |   | N/A   |    | N/A      |
| MidWestOne Bank                                                                               | 141,287 |         |                                        | 9.23         | %                                                     |         | 61,215 |   |    | 4.00         | %            |   | 76,518          |         |                         | 5.00         | %                                 |
|                                                                                          |    |         |                                             |         |                                                  |         |   |   |         |         |         |
| N/A - Minimum to be considered well capitalized is not applicable to the consolidated entity. |    |         |

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|        |                        |                           |        |        |        |        |        |        |        |        |        |    |        |   |        |   |        |
|--------|------------------------|---------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|----|--------|---|--------|---|--------|
|   |                   | Immediate Change in Rates |   |
|   |                   | -200                      |   | -100   |   | +100   |   | +200   |   |
|   | (dollars in thousands) |                      |   |   |   |   |   |   |   |
|   | June 30, 2010     |                      |   |   |   |   |   |   |   |
|   | Dollar change          | $                         | 1,424  |   |   | $      | 1,222  |   |   | $      | (1,476 | )  |   | $ | (2,175 | ) |   |
|   | Percent change         | 2.9                       | %      |   | 2.5    | %      |   | (3.0   | )%     |   | (4.4   | )% |   |
|   |                   |                      |   |   |   |   |   |   |   |
|   | December 31, 2009 |                      |   |   |   |   |   |   |   |
|   | Dollar change          | $                         | 885    |   |   | $      | 1,373  |   |   | $      | (1,995 | )  |   | $ | (3,310 | ) |   |
|   | Percent change         | 1.8                       | %      |   | 2.8    | %      |   | (4.1   | )%     |   | (6.8   | )% |   |

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|               |              |              |                                                                                                                                                                  |                               |                |
|---------------|--------------|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------------|----------------|
| ExhibitNumber |    | Description  |                                                                                                                                                        | Incorporated by Reference to: |
|          |         |         |
| 31.1          |         |    | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)                                                                 |                     | Filed herewith |
|          |         |         |
| 31.2          |         |    | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)                                                                 |                     | Filed herewith |
|          |         |         |
| 32.1          |         |    | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |                     | Filed herewith |
|          |         |         |
| 32.2          |         |    | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |                     | Filed herewith |

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|        |                     |        |                                            |        |                                                      |        |        |
|--------|---------------------|--------|--------------------------------------------|--------|------------------------------------------------------|--------|--------|
|   |                |   | MIDWESTONE FINANCIAL GROUP, INC. |   |                                                 |
|   |                |   |                                       |   |                                                 |   |
| Dated: | August 4, 2010 |   | By:                                        |   | /s/ CHARLES N. FUNK                             |   |   |
|   |                |   |                                       |   | Charles N. Funk                                      |   |   |
|   |                |   |                                       |   | President and Chief Executive Officer                |   |
|   |                |   |                                       |   |                                                 |   |
|   |                |   | By:                                        |   | /s/ GARY J. ORTALE                              |   |   |
|   |                |   |                                       |   | Gary J. Ortale                                       |   |   |
|   |                |   |                                       |   | Executive Vice President and Chief Financial Officer |   |