----

----

| Indiana                                  |   | 35-1782688          |
|------------------------------------------|--------|---------------------|
| (State or Other Jurisdiction of          |   | (I.R.S. Employer    |
| Incorporation or Organization)           |   | Identification No.) |
|                                     |   |                |
| 2118 Bundy Avenue, New Castle, Indiana   |   | 47362-1048          |
| (Address of Principal Executive Offices) |   | (Zip Code)          |

| Not Applicable                                                                     |
|------------------------------------------------------------------------------------|
| (Former name, former address and former fiscal year, if changed since last report) |

| Large accelerated filer |  ̈ |   | Accelerated filer         |  ̈ |
|-------------------------|--------|--------|---------------------------|--------|
|                    |   |   |                      |   |
| Non-accelerated filer   |  ̈ |   | Smaller reporting company | x      |

----

|                                     |      |                                                                                                     | Page No. |
|------------------------------------------|-----------|----------------------------------------------------------------------------------------------------------|---------------|
|                                     |      |                                                                                                     |          |
| Part I.  Financial Information |      |
|                                     |      |                                                                                                     |          |
|                                     | Item 1.   | Financial Statements (Unaudited)                                                                         |   3      |
|                                     |      |                                                                                                     |          |
|                                     |      | Consolidated Condensed Balance Sheets at March 31, 2011 and December 31, 2010                            |   3      |
|                                     |      |                                                                                                     |          |
|                                     |      | Consolidated Condensed Statements of Income for the Three Months Ended March 31, 2011 and 2010           |   4      |
|                                     |      |                                                                                                     |          |
|                                     |      | Consolidated Condensed Statement of Shareholders’ Equity for the Three Months Ended March 31, 2011 |   6      |
|                                     |      |                                                                                                     |          |
|                                     |      | Consolidated Condensed Statements of Cash Flows for the Three Months Ended March 31, 2011 and 2010       |   7      |
|                                     |      |                                                                                                     |          |
|                                     |      | Notes to Consolidated Condensed Financial Statements                                                     |   8      |
|                                     |      |                                                                                                     |          |
|                                     | Item 2.   | Management’s Discussion and Analysis of Financial Condition and Results of Operations              |   23     |
|                                     |      |                                                                                                     |          |
|                                     | Item 3.   | Quantitative and Qualitative Disclosure about Market Risk                                                |   34     |
|                                     |      |                                                                                                     |          |
|                                     | Item 4.   | Controls and Procedures                                                                                  |   34     |
|                                     |      |                                                                                                     |          |
| Part II.  Other Information    |      |
|                                     |      |                                                                                                     |          |
|                                     | Item 1.   | Legal Proceedings                                                                                        |   34     |
|                                     |      |                                                                                                     |          |
|                                     | Item 1A.  | Risk Factors                                                                                             |   34     |
|                                     |      |                                                                                                     |          |
|                                     | Item 2.   | Unregistered Sales of Equity Securities and Use of Proceeds                                              |   35     |
|                                     |      |                                                                                                     |          |
|                                     | Item 3.   | Defaults upon Senior Securities                                                                          |   35     |
|                                     |      |                                                                                                     |          |
|                                     | Item 4.   | (Removed and Reserved)                                                                                   |   35     |
|                                     |      |                                                                                                     |          |
|                                     | Item 5.   | Other Information                                                                                        |   35     |
|                                     |      |                                                                                                     |          |
|                                     | Item 6.   | Exhibits                                                                                                 |   35     |
|                                     |      |                                                                                                     |          |
| Signatures                               |   36 |

----

|                                                                                                           |   | March 31, |    |   | December 31, |   |
|----------------------------------------------------------------------------------------------------------------|--------|----------------|---------|--------|-------------------|--------|
|                                                                                                           |   | 2011           |    |   | 2010              |   |
|                                                                                                           |   | (Unaudited)    |    |   |              |   |
| Assets                                                                                                         |   |           |    |   |              |   |
| Cash on hand and in other institutions                                                                         |   | $              | 4,309   |   |              | $      | 3,673 |   |
| Interest-bearing demand deposits                                                                               |   |           | 26,953  |   |              |   | 8,074 |   |
| Cash and cash equivalents                                                                                      |   |           | 31,262  |   |              |   | 11,747 |   |
| Investment securities available for sale                                                                       |   |           | 32,769  |   |              |   | 38,608 |   |
| Loans held for sale                                                                                            |   |           | 532     |   |              |   | 91 |   |
| Loans, net of allowance for loan losses of $4,416 and $4,212                                                   |   |           | 309,035 |   |              |   | 312,715 |   |
| Premises and equipment                                                                                         |   |           | 14,513  |   |              |   | 14,736 |   |
| Stock in Federal Home Loan Bank                                                                                |   |           | 5,101   |   |              |   | 5,101 |   |
| Goodwill                                                                                                       |   |           | 649     |   |              |   | 649 |   |
| Cash value of life insurance                                                                                   |   |           | 25,623  |   |              |   | 25,413 |   |
| Other real estate owned                                                                                        |   |           | 9,027   |   |              |   | 9,067 |   |
| Other assets                                                                                                   |   |           | 12,673  |   |              |   | 11,530 |   |
| Total assets                                                                                                   |   | $              | 441,184 |   |              | $      | 429,657 |   |
|                                                                                                           |   |           |    |   |              |   |   |   |
| Liabilities and Shareholders’ Equity                                                                     |   |           |    |   |              |   |   |   |
| Liabilities                                                                                                    |   |           |    |   |              |   |   |   |
| Deposits                                                                                                       |   |           |    |   |              |   |   |   |
| Noninterest-bearing                                                                                            |   | $              | 38,093  |   |              | $      | 34,769 |   |
| Interest-bearing                                                                                               |   |           | 316,872 |   |              |   | 303,209 |   |
| Total deposits                                                                                                 |   |           | 354,965 |   |              |   | 337,978 |   |
| Borrowings                                                                                                     |   |           | 45,810  |   |              |   | 51,810 |   |
| Drafts payable                                                                                                 |   |           | 1,018   |   |              |   | 1,594 |   |
| Other liabilities                                                                                              |   |           | 6,201   |   |              |   | 5,024 |   |
| Total liabilities                                                                                              |   |           | 407,994 |   |              |   | 396,406 |   |
| Commitments and contingencies                                                                                  |   |           |    |   |              |   |   |   |
| Shareholders’ equity                                                                                     |   |           |    |   |              |   |   |   |
| Preferred stock - 5,000,000 shares authorized and unissued                                                     |   |           | — |   |              |   | — |   |
| Common stock, $1.00 par valueAuthorized 15,000,000 sharesIssued  –  3,213,952 shares |   |           | 3,214   |   |              |   | 3,214 |   |
| Outstanding – 2,988,952 shares                                                                           |   |           |    |   |              |   |   |   |
| Additional paid-in capital                                                                                     |   |           | 1,050   |   |              |   | 1,048 |   |
| Retained earnings                                                                                              |   |           | 31,940  |   |              |   | 31,849 |   |
| Accumulated other comprehensive (loss) income                                                                  |   |           | (16     | )      |              |   | 138 |   |
| Treasury stock at cost – 225,000 shares                                                                  |   |           | (2,998  | )      |              |   | (2,998 | ) |
| Total shareholders’ equity                                                                               |   |           | 33,190  |   |              |   | 33,251 |   |
| Total liabilities and shareholders’ equity                                                               |   | $              | 441,184 |   |              | $      | 429,657 |   |

----

|                                                                          |   | Three Months EndedMarch 31, |   |
|-------------------------------------------------------------------------------|--------|--------------------------------------------|--------|
|                                                                          |   | 2011                                       |   |   | 2010 |   |
| Interest Income                                                               |   |                                       |   |   |   |   |
| Interest and fees on loans                                                    |   | $                                          | 4,394  |   |   | $ | 4,676 |   |
| Interest on mortgage-backed securities                                        |   |                                       | 288    |   |   |   | 318 |   |
| Interest on investment securities                                             |   |                                       | 38     |   |   |   | 52 |   |
| Other interest and dividend income                                            |   |                                       | 46     |   |   |   | 37 |   |
| Total interest income                                                         |   |                                       | 4,766  |   |   |   | 5,083 |   |
| Interest Expense                                                              |   |                                       |   |   |   |   |   |   |
| Interest on deposits                                                          |   |                                       | 862    |   |   |   | 1,169 |   |
| Interest on borrowings                                                        |   |                                       | 475    |   |   |   | 631 |   |
| Total interest expense                                                        |   |                                       | 1,337  |   |   |   | 1,800 |   |
| Net Interest Income                                                           |   |                                       | 3,429  |   |   |   | 3,283 |   |
| Provision for loan losses                                                     |   |                                       | 360    |   |   |   | 360 |   |
| Net Interest Income After Provision for Loan Losses                           |   |                                       | 3,069  |   |   |   | 2,923 |   |
| Other Income                                                                  |   |                                       |   |   |   |   |   |   |
| Other fees and service charges                                                |   |                                       | 461    |   |   |   | 469 |   |
| Brokerage and insurance commissions                                           |   |                                       | 386    |   |   |   | 364 |   |
| Net realized and recognized gains on available-for-sale investment securities |   |                                       | 52     |   |   |   | 104 |   |
| Gains on sales of loans and servicing rights                                  |   |                                       | 32     |   |   |   | 66 |   |
| Net loss from sales and write-downs of other real estate owned                |   |                                       | (11    | ) |   |   | (35 | ) |
| Other real estate owned rental income                                         |   |                                       | 212    |   |   |   | 100 |   |
| Increase in cash value of life insurance                                      |   |                                       | 210    |   |   |   | 218 |   |
| Other                                                                         |   |                                       | 47     |   |   |   | 66 |   |
| Total other income                                                            |   |                                       | 1,389  |   |   |   | 1,352 |   |
| Other Expense                                                                 |   |                                       |   |   |   |   |   |   |
| Salaries and employee benefits                                                |   |                                       | 2,403  |   |   |   | 2,274 |   |
| Net occupancy expense                                                         |   |                                       | 447    |   |   |   | 408 |   |
| Furniture and equipment expense                                               |   |                                       | 219    |   |   |   | 215 |   |
| Legal and professional fees                                                   |   |                                       | 163    |   |   |   | 221 |   |
| FDIC insurance premiums and assessments                                       |   |                                       | 208    |   |   |   | 196 |   |
| Data processing expense                                                       |   |                                       | 202    |   |   |   | 176 |   |
| Printing and office supplies                                                  |   |                                       | 68     |   |   |   | 54 |   |
| Marketing expense                                                             |   |                                       | 88     |   |   |   | 101 |   |
| Other real estate owned expense                                               |   |                                       | 183    |   |   |   | 208 |   |
| Other                                                                         |   |                                       | 420    |   |   |   | 433 |   |
| Total other expense                                                           |   |                                       | 4,401  |   |   |   | 4,286 |   |
| Income (Loss) Before Income Taxes                                             |   |                                       | 57     |   |   |   | (11 | ) |
| Income tax benefit                                                            |   |                                       | 64     |   |   |   | 91 |   |
| Net Income                                                                    |   | $                                          | 121    |   |   | $ | 80 |   |

----

|                         |   | Three Months Ended March 31, |   |
|------------------------------|--------|--------------------------------------------------|--------|
|                         |   | 2011                                             |   |   | 2010 |   |
|                         |   |                                             |   |   |   |   |
| Basic Earnings Per Share     |   | $                                                | 0.04   |   |   | $ | 0.03 |   |
| Diluted Earnings Per Share   |   | $                                                | 0.04   |   |   | $ | 0.03 |   |
| Dividends Declared Per Share |   | $                                                | 0.01   |   |   | $ | 0.01 |   |

----

|                                                                                                                      |   | CommonStock |    |   | AdditionalPaid-inCapital |   |    | RetainedEarnings |   |   | AccumulatedOtherComprehensiveIncome (Loss) |   |   | TreasuryStock |    |   | Total  |   |
|---------------------------------------------------------------------------------------------------------------------------|--------|-------------|---------|--------|--------------------------|--------|---------|------------------|--------|--------|-------------------------------------------------|--------|--------|---------------|---------|--------|--------|--------|
| Balance at December 31, 2010                                                                                              |   | $           | 3,214   |   |                     | $      | 1,048   |             |   | $      | 31,849                                          |   |   | $             | 138     |   |   | $      | (2,998 | ) |   | $ | 33,251 |   |
| Net Income                                                                                                                |   |        | — |   |                     |   | — |             |   |   | 121                                             |   |   |          | — |   |   |   | — |   |   |   | 121 |   |
| Change of $234 from unrealized gain to unrealized loss on available-for-sale securities, net of income tax benefit of $80 |   |        | — |   |                     |   | — |             |   |   | —                                         |   |   |          | (154    | )      |   |   | — |   |   |   | (154 | ) |
| Comprehensive loss                                                                                                        |   |        |    |   |                     |   |    |             |   |   |                                            |   |   |          |    |   |   |   |   |   |   |   | (33 | ) |
| Share-based compensation                                                                                                  |   |        | — |   |                     |   | 2       |             |   |   | —                                         |   |   |          | — |   |   |   | — |   |   |   | 2 |   |
| Dividends declared ($0.01 per share)                                                                                      |   |        | — |   |                     |   | — |             |   |   | (30                                             | )      |   |          | — |   |   |   | — |   |   |   | (30 | ) |
| Balance at March 31, 2011                                                                                                 |   | $           | 3,214   |   |                     | $      | 1,050   |             |   | $      | 31,940                                          |   |   | $             | (16     | )      |   | $      | (2,998 | ) |   | $ | 33,190 |   |

----

|                                                        |   | Three Months Ended March 31, |    |
|-------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                        |   | 2011                                             |    |   | 2010 |   |
| Operating Activities                                        |   |                                             |    |   |   |   |
| Net income                                                  |   | $                                                | 121     |   |   | $ | 80 |   |
| Items not requiring (providing) cash                        |   |                                             |    |   |   |   |   |   |
| Provision for losses on loans                               |   |                                             | 360     |   |   |   | 360 |   |
| Depreciation and amortization                               |   |                                             | 352     |   |   |   | 285 |   |
| Increase in cash value of life insurance                    |   |                                             | (210    | ) |   |   | (218 | ) |
| Gain from sale of available-for-sale securities             |   |                                             | (52     | ) |   |   | (104 | ) |
| Loss on sale or write-down of other real estate owned       |   |                                             | 11      |   |   |   | 35 |   |
| Mortgage loans originated for sale                          |   |                                             | (1,793  | ) |   |   | (3,489 | ) |
| Proceeds from sales of mortgage loans originated for sale   |   |                                             | 1,365   |   |   |   | 3,131 |   |
| Gains on sales of mortgage loans and servicing rights       |   |                                             | (32     | ) |   |   | (66 | ) |
| Increase in accrued interest payable                        |   |                                             | 554     |   |   |   | 621 |   |
| Other adjustments                                           |   |                                             | 1,023   |   |   |   | (354 | ) |
| Net cash provided by operating activities                   |   |                                             | 1,699   |   |   |   | 281 |   |
| Investing Activities                                        |   |                                             |    |   |   |   |   |   |
| Purchase of securities                                      |   |                                             | (13     | ) |   |   | (10 | ) |
| Proceeds/principal from the sale of securities              |   |                                             | 2,369   |   |   |   | 553 |   |
| Principal collected on mortgage-backed securities           |   |                                             | 1,457   |   |   |   | 1,094 |   |
| Net change in loans                                         |   |                                             | 3,152   |   |   |   | 194 |   |
| Proceeds from sales of other real estate owned              |   |                                             | 197     |   |   |   | 389 |   |
| Net purchases and construction of premises and equipment    |   |                                             | (31     | ) |   |   | (30 | ) |
| Construction cost for other real estate owned               |   |                                             | — |   |   |   | (32 | ) |
| Other investing activities                                  |   |                                             | 2       |   |   |   | 8 |   |
| Net cash provided by investing activities                   |   |                                             | 7,133   |   |   |   | 2,166 |   |
| Financing Activities                                        |   |                                             |    |   |   |   |   |   |
| Net change in demand and savings deposits                   |   |                                             | 11,691  |   |   |   | 1,490 |   |
| Net change in brokered certificates of deposit              |   |                                             | 6,178   |   |   |   | — |   |
| Net change in other certificates of deposit                 |   |                                             | (882    | ) |   |   | (3,175 | ) |
| (Decrease) increase in drafts payable                       |   |                                             | (576    | ) |   |   | 28 |   |
| Proceeds from long-term borrowings                          |   |                                             | — |   |   |   | 3,000 |   |
| Repayment of long-term borrowings                           |   |                                             | (6,000  | ) |   |   | (3,375 | ) |
| Net change in advances by borrowers for taxes and insurance |   |                                             | 302     |   |   |   | 175 |   |
| Cash dividends paid                                         |   |                                             | (30     | ) |   |   | (30 | ) |
| Net cash provided by (used) in financing activities         |   |                                             | 10,683  |   |   |   | (1,887 | ) |
| Change in Cash and Cash Equivalents                         |   |                                             | 19,515  |   |   |   | 560 |   |
| Cash and Cash Equivalents at Beginning of Year              |   |                                             | 11,747  |   |   |   | 19,588 |   |
| Cash and Cash Equivalents at End of Quarter                 |   | $                                                | 31,262  |   |   | $ | 20,148 |   |
|                                                        |   |                                             |    |   |   |   |   |   |
| Supplemental information:                                   |   |                                             |    |   |   |   |   |   |
|                                                        |   |                                             |    |   |   |   |   |   |
| Interest paid on deposits                                   |   | $                                                | 288     |   |   | $ | 544 |   |
|                                                        |   |                                             |    |   |   |   |   |   |
| Interest paid on borrowings                                 |   | $                                                | 495     |   |   | $ | 635 |   |
|                                                        |   |                                             |    |   |   |   |   |   |
| Non-cash supplemental information:                          |   |                                             |    |   |   |   |   |   |
|                                                        |   |                                             |    |   |   |   |   |   |
| Transfers from loans to other real estate owned             |   | $                                                | 168     |   |   | $ | 1,470 |   |

----

|                                                                         |   | (In thousands, except share data) |   |
|------------------------------------------------------------------------------|--------|-------------------------------------------------------|--------|
|                                                                         |   | Three Months Ended March 31,      |   |
|                                                                         |   | 2011                                                  |   |   | 2010 |   |
|                                                                         |   | NetIncome                                             |   |   | WeightedAverageShares |   |   | Per ShareAmount |   |   | NetIncome |   |   | WeightedAverageShares |   |   | Per ShareAmount |   |
| Basic Earnings Per Share:  Income available to common shareholders |   | $                                                     | 121    |   |   |   | 2,988,952 |   |   | $ | 0.04 |   |   | $ | 80 |   |   |   | 2,988,952 |   |   | $ | 0.03 |   |
| Effect of dilutive stock options                                             |   |                                                  | -      |   |   |   | - |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   |   |   |
| Diluted Earnings Per Share: Income available to common shareholders          |   | $                                                     | 121    |   |   |   | 2,988,952 |   |   | $ | 0.04 |   |   | $ | 80 |   |   |   | 2,988,952 |   |   | $ | 0.03 |   |

----

|                                                       |   | AmortizedCost |   |   | GrossUnrealizedGains |   |    | GrossUnrealizedLosses |   |   | FairValue |   |
|------------------------------------------------------------|--------|---------------|--------|--------|----------------------|--------|---------|-----------------------|--------|--------|-----------|--------|
| Available for sale at March 31, 2011                       |   |          |   |   |                 |   |    |                  |   |   |      |   |
| Ginnie Mae and GSE mortgage-backed pass-through securities |   | $             | 23,852 |   |                 | $      | 176     |                  |   | $      | 145       |   |   | $ | 23,883 |   |
| Ginnie Mae collateralized mortgage obligations             |   |          | 5,075  |   |                 |   | — |                  |   |   | 75        |   |   |   | 5,000 |   |
| Municipal securities                                       |   |          | 2,228  |   |                 |   | 17      |                  |   |   | 33        |   |   |   | 2,212 |   |
| Mutual fund                                                |   |          | 1,639  |   |                 |   | 35      |                  |   |   | —   |   |   |   | 1,674 |   |
|                                                       |   | $             | 32,794 |   |                 | $      | 228     |                  |   | $      | 253       |   |   | $ | 32,769 |   |

|                                                       |   | AmortizedCost |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | FairValue |   |
|------------------------------------------------------------|--------|---------------|--------|--------|----------------------|--------|--------|-----------------------|--------|--------|-----------|--------|
| Available for sale at December 31, 2010                    |   |          |   |   |                 |   |   |                  |   |   |      |   |
| Ginnie Mae and GSE mortgage-backed pass-through securities |   | $             | 29,210 |   |                 | $      | 336    |                  |   | $      | 110       |   |   | $ | 29,436 |   |
| Ginnie Mae collateralized mortgage obligations             |   |          | 5,335  |   |                 |   | 8      |                  |   |   | 2         |   |   |   | 5,341 |   |
| Municipal securities                                       |   |          | 2,228  |   |                 |   | 12     |                  |   |   | 76        |   |   |   | 2,164 |   |
| Mutual fund                                                |   |          | 1,626  |   |                 |   | 41     |                  |   |   | —   |   |   |   | 1,667 |   |
|                                                       |   | $             | 38,399 |   |                 | $      | 397    |                  |   | $      | 188       |   |   | $ | 38,608 |   |

|                                                       |   | Available for Sale |    |
|------------------------------------------------------------|--------|------------------------------|---------|
|                                                       |   | AmortizedCost                |    |   | FairValue |   |
| Within one year                                            |   | $                            | — |   |   | $ | — |   |
| One to five years                                          |   |                         | 1,465   |   |   |   | 1,482 |   |
| Five to ten years                                          |   |                         | — |   |   |   | — |   |
| After ten years                                            |   |                         | 763     |   |   |   | 730 |   |
|                                                       |   |                         | 2,228   |   |   |   | 2,212 |   |
| Ginnie Mae and GSE mortgage-backed pass-through securities |   |                         | 23,852  |   |   |   | 23,883 |   |
| Ginnie Mae collateralized mortgage obligations             |   |                         | 5,075   |   |   |   | 5,000 |   |
| Mutual fund                                                |   |                         | 1,639   |   |   |   | 1,674 |   |
|                                                       |   | $                            | 32,794  |   |   | $ | 32,769 |   |

----

| At March 31, 2011                           |   | Less Than 12 Months |   |   | 12 Months or Longer |   |   | Total           |   |
|------------------------------------------------------------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|-----------------|--------|
|                                                       |   | Fair Value                    |   |   | UnrealizedLosses                   |   |   | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
| Ginnie Mae and GSE mortgage-backed pass-through securities |   | $                                  | 8,267  |   |                               | $      | 145    |            |   | $ | — |   |   | $ | — |   |   | $ | 8,267 |   |   | $ | 145 |   |
| Ginnie Mae collateralized mortgage obligations             |   |                               | 5,000  |   |                               |   | 75     |            |   |   | — |   |   |   | — |   |   |   | 5,000 |   |   |   | 75 |   |
| Municipal securities                                       |   |                               | 731    |   |                               |   | 33     |            |   |   | — |   |   |   | — |   |   |   | 731 |   |   |   | 33 |   |
|                                                       |   | $                                  | 13,998 |   |                               | $      | 253    |            |   | $ | — |   |   | $ | — |   |   | $ | 13,998 |   |   | $ | 253 |   |

| At December 31, 2010                        |   | Less Than 12 Months |   |   | 12 Months or Longer |   |   | Total           |   |
|------------------------------------------------------------|--------|------------------------------------|--------|--------|------------------------------------|--------|--------|-----------------|--------|
|                                                       |   | Fair Value                    |   |   | UnrealizedLosses                   |   |   | Fair Value |   |   | UnrealizedLosses |   |   | Fair Value |   |   | UnrealizedLosses |   |
| Ginnie Mae and GSE mortgage-backed pass-through securities |   | $                                  | 5,055  |   |                               | $      | 109    |            |   | $ | 51 |   |   | $ | 1 |   |   | $ | 5,106 |   |   | $ | 110 |   |
| Ginnie Mae collateralized mortgage obligations             |   |                               | 2,225  |   |                               |   | 2      |            |   |   | — |   |   |   | — |   |   |   | 2,225 |   |   |   | 2 |   |
| Municipal securities                                       |   |                               | 1,828  |   |                               |   | 76     |            |   |   | — |   |   |   | — |   |   |   | 1,828 |   |   |   | 76 |   |
|                                                       |   | $                                  | 9,108  |   |                               | $      | 187    |            |   | $ | 51 |   |   | $ | 1 |   |   | $ | 9,159 |   |   | $ | 188 |   |

----

|                               |   | At March 31, |    |   | At December 31, |   |
|------------------------------------|--------|------------------------|---------|--------|---------------------------|--------|
|                               |   | 2011                   |    |   | 2010                      |   |
| Real estate loans:                 |   |                   |    |   |                      |   |
| Commercial                         |   | $                      | 96,816  |   |                      | $      | 94,595 |   |
| Residential                        |   |                   | 161,943 |   |                      |   | 167,162 |   |
| Construction                       |   |                   | 26,706  |   |                      |   | 26,817 |   |
| Commercial loans and leases        |   |                   | 24,536  |   |                      |   | 22,360 |   |
| Municipal loans                    |   |                   | 3,075   |   |                      |   | 2,718 |   |
| Consumer loans                     |   |                   | 3,613   |   |                      |   | 3,943 |   |
| Total loans                        |   |                   | 316,689 |   |                      |   | 317,595 |   |
|                               |   |                   |    |   |                      |   |   |   |
| Less:                              |   |                   |    |   |                      |   |   |   |
| Undisbursed loan proceeds          |   |                   | 2,985   |   |                      |   | 443 |   |
| Deferred loan fees (expenses), net |   |                   | 253     |   |                      |   | 225 |   |
| Allowance for loan losses          |   |                   | 4,416   |   |                      |   | 4,212 |   |
|                               |   |                   | 7,654   |   |                      |   | 4,880 |   |
|                               |   |                   |    |   |                      |   |   |   |
| Total loans - net                  |   | $                      | 309,035 |   |                      | $      | 312,715 |   |

|   | 1) | Loans will be segmented by type of loan. |
|--------|----|------------------------------------------|

|   | 2) | Loans will be further segmented by risk grades. |
|--------|----|-------------------------------------------------|

|   | 3) | The required ALLL for types of performing homogeneous loans which do not have a specific reserve will be determined by applying a factor based on historical losses averaged over the past 12 quarters.  In those instances, where  the Bank’s historical experience is not available, the CCO will develop factors based on industry experience and best practices. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4) | All criticized and classified loans will be tested for impairment by applying one of three methodologies: |
|--------|----|-----------------------------------------------------------------------------------------------------------|

|   | 5) | Loans tested for impairment will be removed from other pools to prevent layering (double-counting). |
|--------|----|-----------------------------------------------------------------------------------------------------|

|   | 6) | The required ALLL for each group of loans will be added together to determine the total required ALLL for the Bank.  The required ALLL will be compared to the current ALLL to determine the required provision to increase the ALLL or credit to decrease the ALLL. |
|--------|----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                             |   | CommercialReal EstateLoans |    |   | ResidentialReal EstateLoans |   |    | ConstructionReal EstateLoans |   |   | CommercialLoans andLeases |   |   | MunicipalLoans |    |   | ConsumerLoans |   |    | Total  |   |
|---------------------------------------|--------|---------------------------------|---------|--------|----------------------------------|--------|---------|-----------------------------------|--------|--------|--------------------------------|--------|--------|----------------|---------|--------|---------------|--------|---------|--------|--------|
| Balance at beginning of quarter       |   | $                               | 639     |   |                             | $      | 1,584   |                              |   | $      | 1,254                          |   |   | $              | 657     |   |          | $      | — |   |   | $ | 78 |   |   | $ | 4,212 |   |
| Provision for losses                  |   |                            | 194     |   |                             |   | 295     |                              |   |   | (211                           | )      |   |           | 66      |   |          |   | — |   |   |   | 16 |   |   |   | 360 |   |
| Charge-offs  (1)            |   |                            | — |   |                             |   | (153    | )                                 |   |   | (2                             | )      |   |           | — |   |          |   | — |   |   |   | (20 | ) |   |   | (175 | ) |
| Recoveries                            |   |                            | — |   |                             |   | 15      |                              |   |   | —                        |   |   |           | — |   |          |   | — |   |   |   | 4 |   |   |   | 19 |   |
| Balance at end of quarter             |   | $                               | 833     |   |                             | $      | 1,741   |                              |   | $      | 1,041                          |   |   | $              | 723     |   |          |   | — |   |   | $ | 78 |   |   | $ | 4,416 |   |
|                                  |   |                            |    |   |                             |   |    |                              |   |   |                           |   |   |           |    |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Ending allowance balance:             |   |                            |    |   |                             |   |    |                              |   |   |                           |   |   |           |    |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Individually evaluated for impairment |   | $                               | 556     |   |                             | $      | 845     |                              |   | $      | 595                            |   |   | $              | 97      |   |          | $      | — |   |   | $ | 8 |   |   | $ | 2,101 |   |
| Collectively evaluated for impairment |   |                            | 277     |   |                             |   | 896     |                              |   |   | 446                            |   |   |           | 626     |   |          |   | — |   |   |   | 70 |   |   |   | 2,315 |   |
| Total                                 |   | $                               | 833     |   |                             | $      | 1,741   |                              |   | $      | 1,041                          |   |   | $              | 723     |   |          |   | — |   |   | $ | 78 |   |   | $ | 4,416 |   |
|                                  |   |                            |    |   |                             |   |    |                              |   |   |                           |   |   |           |    |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Ending loan balance:                  |   |                            |    |   |                             |   |    |                              |   |   |                           |   |   |           |    |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Individually evaluated for impairment |   | $                               | 6,081   |   |                             | $      | 5,817   |                              |   | $      | 4,474                          |   |   | $              | 1,014   |   |          | $      | — |   |   | $ | 60 |   |   | $ | 17,446 |   |
| Collectively evaluated for impairment |   |                            | 90,735  |   |                             |   | 156,126 |                              |   |   | 22,232                         |   |   |           | 23,522  |   |          |   | 3,075   |   |   |   | 3,553 |   |   |   | 299,243 |   |
| Total                                 |   | $                               | 96,816  |   |                             | $      | 161,943 |                              |   | $      | 26,706                         |   |   | $              | 24,536  |   |          | $      | 3,075   |   |   | $ | 3,613 |   |   | $ | 316,689 |   |

----

|                             |   | CommercialReal EstateLoans |   |   | ResidentialReal EstateLoans |   |    | ConstructionReal EstateLoans |   |   | CommercialLoans andLeases |   |   | MunicipalLoans |   |   | ConsumerLoans |   |    | Total  |   |
|---------------------------------------|--------|---------------------------------|--------|--------|----------------------------------|--------|---------|-----------------------------------|--------|--------|--------------------------------|--------|--------|----------------|--------|--------|---------------|--------|---------|--------|--------|
| Balance at beginning of year          |   | $                               | 661    |   |                             | $      | 1,262   |                              |   | $      | 1,269                          |   |   | $              | 686    |   |          | $      | — |   |   | $ | 127 |   |   | $ | 4,005 |   |
| Provision for losses                  |   |                            | 200    |   |                             |   | 1,059   |                              |   |   | 304                            |   |   |           | 365    |   |          |   | — |   |   |   | 5 |   |   |   | 1,933 |   |
| Charge-offs  (1)            |   |                            | (238   | )      |                             |   | (737    | )                                 |   |   | (525                           | )      |   |           | (398   | )      |          |   | — |   |   |   | (72 | ) |   |   | (1,970 | ) |
| Recoveries                            |   |                            | 16     |   |                             |   | — |                              |   |   | 206                            |   |   |           | 4      |   |          |   | — |   |   |   | 18 |   |   |   | 244 |   |
| Balance at end of year                |   | $                               | 639    |   |                             | $      | 1,584   |                              |   | $      | 1,254                          |   |   | $              | 657    |   |          |   | — |   |   | $ | 78 |   |   | $ | 4,212 |   |
|                                  |   |                            |   |   |                             |   |    |                              |   |   |                           |   |   |           |   |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Ending allowance balance:             |   |                            |   |   |                             |   |    |                              |   |   |                           |   |   |           |   |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Individually evaluated for impairment |   | $                               | 406    |   |                             | $      | 876     |                              |   | $      | 797                            |   |   | $              | 97     |   |          | $      | — |   |   | $ | 8 |   |   | $ | 2,184 |   |
| Collectively evaluated for impairment |   |                            | 233    |   |                             |   | 708     |                              |   |   | 457                            |   |   |           | 560    |   |          |   | — |   |   |   | 70 |   |   |   | 2,028 |   |
| Total                                 |   | $                               | 639    |   |                             | $      | 1,584   |                              |   | $      | 1,254                          |   |   | $              | 657    |   |          | $      | — |   |   | $ | 78 |   |   | $ | 4,212 |   |
|                                  |   |                            |   |   |                             |   |    |                              |   |   |                           |   |   |           |   |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Ending loan balance:                  |   |                            |   |   |                             |   |    |                              |   |   |                           |   |   |           |   |   |          |   |    |   |   |   |   |   |   |   |   |   |
| Individually evaluated for impairment |   | $                               | 6,288  |   |                             | $      | 7,604   |                              |   | $      | 5,694                          |   |   | $              | 1,055  |   |          | $      | — |   |   | $ | 42 |   |   | $ | 20,683 |   |
| Collectively evaluated for impairment |   |                            | 88,307 |   |                             |   | 159,558 |                              |   |   | 21,123                         |   |   |           | 21,305 |   |          |   | 2,718   |   |   |   | 3,901 |   |   |   | 296,912 |   |
| Total                                 |   | $                               | 94,595 |   |                             | $      | 167,162 |                              |   | $      | 26,817                         |   |   | $              | 22,360 |   |          | $      | 2,718   |   |   | $ | 3,943 |   |   | $ | 317,595 |   |

| (1) | Loan Charge-Offs: A loan should be charged off at any point in time when it no longer can be considered a bankable asset, meaning collectable within the parameters of policy. The Bank shall not renew any loan, or put a loan on a demand basis, only to defer a problem, nor is it appropriate to attempt long-term recoveries while reporting loans as assets.  An unsecured loan generally should be charged off no later than when it is 120 days past due as to principal or interest. For loans in the legal process of foreclosure against collateral of real and/or liquid value, the 120-day rule does not apply. Such charge-offs can be deferred until the foreclosure process progresses to the point where the Bank can adequately determine whether or not any ultimate loss will result. In similar instances where other legal actions will cause extraordinary delays, such as the settlement of an estate, yet collateral of value is realizable, the 120-day period could be extended. When a loan is unsecured or not fully collateralized, the loan should be charged off or written down to the documented collateral value rather than merely being placed on non-accrual status. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                            |   | Three Months Ended March 31, |   |
|---------------------------------|--------|--------------------------------------------------|--------|
|                            |   | 2011                                             |   |   | 2010 |   |
| Balance at beginning of quarter |   | $                                                | 4,212  |   |   | $ | 4,005 |   |
| Provision for losses            |   |                                             | 360    |   |   |   | 360 |   |
| Charge-offs                     |   |                                             | (175   | ) |   |   | (540 | ) |
| Recoveries                      |   |                                             | 19     |   |   |   | 138 |   |
| Net charge-offs                 |   |                                             | (156   | ) |   |   | (402 | ) |
| Balance at end of Quarter       |   | $                                                | 4,416  |   |   | $ | 3,963 |   |

----

----

|                 |   | CommercialReal EstateLoans |    |   | ResidentialReal EstateLoans |   |    | ConstructionReal EstateLoans |   |   | CommercialLoans andLeases |   |   | MunicipalLoans |    |   | ConsumerLoans |   |    | Total  |   |
|---------------------------|--------|---------------------------------|---------|--------|----------------------------------|--------|---------|-----------------------------------|--------|--------|--------------------------------|--------|--------|----------------|---------|--------|---------------|--------|---------|--------|--------|
| Rating:                   |   |                            |    |   |                             |   |    |                              |   |   |                           |   |   |           |    |   |          |   |    |   |   |
| Pass (Grades 1-5)         |   | $                               | 78,402  |   |                             | $      | 155,009 |                              |   | $      | 18,332                         |   |   | $              | 22,161  |   |          | $      | 3,075   |   |   | $ | 3,613 |   |   | $ | 280,592 |   |
| Watch (Grade 6)           |   |                            | 6,752   |   |                             |   | 970     |                              |   |   | 3,880                          |   |   |           | 1,300   |   |          |   | — |   |   |   | — |   |   |   | 12,902 |   |
| Special Mention (Grade 7) |   |                            | 5,378   |   |                             |   | 499     |                              |   |   | 55                             |   |   |           | 36      |   |          |   | — |   |   |   | — |   |   |   | 5,968 |   |
| Substandard (Grade 8)     |   |                            | 4,740   |   |                             |   | 1,235   |                              |   |   | 240                            |   |   |           | 487     |   |          |   | — |   |   |   | — |   |   |   | 6,702 |   |
| Doubtful (Grade 9)        |   |                            | 1,544   |   |                             |   | 4,230   |                              |   |   | 4,199                          |   |   |           | 552     |   |          |   | — |   |   |   | — |   |   |   | 10,525 |   |
| Loss (Grade 10)           |   |                            | — |   |                             |   | — |                              |   |   | —                        |   |   |           | — |   |          |   | — |   |   |   | — |   |   |   | — |   |
| Total                     |   | $                               | 96,816  |   |                             | $      | 161,943 |                              |   | $      | 26,706                         |   |   | $              | 24,536  |   |          | $      | 3,075   |   |   | $ | 3,613 |   |   | $ | 316,689 |   |

|                 |   | CommercialReal EstateLoans |    |   | ResidentialReal EstateLoans |   |    | ConstructionReal EstateLoans |   |   | CommercialLoans andLeases |   |   | MunicipalLoans |    |   | ConsumerLoans |   |    | Total  |   |
|---------------------------|--------|---------------------------------|---------|--------|----------------------------------|--------|---------|-----------------------------------|--------|--------|--------------------------------|--------|--------|----------------|---------|--------|---------------|--------|---------|--------|--------|
| Rating:                   |   |                            |    |   |                             |   |    |                              |   |   |                           |   |   |           |    |   |          |   |    |   |   |
| Pass (Grades 1-5)         |   | $                               | 76,303  |   |                             | $      | 157,801 |                              |   | $      | 18,383                         |   |   | $              | 21,277  |   |          | $      | 2,718   |   |   | $ | 3,929 |   |   | $ | 280,411 |   |
| Watch (Grade 6)           |   |                            | 6,501   |   |                             |   | 1,257   |                              |   |   | 2,685                          |   |   |           | 513     |   |          |   | — |   |   |   | — |   |   |   | 10,956 |   |
| Special Mention (Grade 7) |   |                            | 5,420   |   |                             |   | 216     |                              |   |   | 55                             |   |   |           | 43      |   |          |   | — |   |   |   | — |   |   |   | 5,734 |   |
| Substandard (Grade 8)     |   |                            | 6,168   |   |                             |   | 1,630   |                              |   |   | 1,510                          |   |   |           | — |   |          |   | — |   |   |   | — |   |   |   | 9,308 |   |
| Doubtful (Grade 9)        |   |                            | 203     |   |                             |   | 6,258   |                              |   |   | 4,184                          |   |   |           | 527     |   |          |   | — |   |   |   | 14 |   |   |   | 11,186 |   |
| Loss (Grade 10)           |   |                            | — |   |                             |   | — |                              |   |   | —                        |   |   |           | — |   |          |   | — |   |   |   | — |   |   |   | — |   |
| Total                     |   | $                               | 94,595  |   |                             | $      | 167,162 |                              |   | $      | 26,817                         |   |   | $              | 22,360  |   |          | $      | 2,718   |   |   | $ | 3,943 |   |   | $ | 317,595 |   |

----

|                   |   | 30-59 DaysPast Due (A) |    |   | 60-89 DaysPast Due |   |    | Greater than90 Days |   |   | Total PastDue |   |   | Current |    |   | Total LoansReceivable |   |    | Total Loans> 90 days & Accruing |   |
|-----------------------------|--------|---------------------------------------|---------|--------|------------------------------|--------|---------|-------------------------------|--------|--------|--------------------|--------|--------|---------|---------|--------|----------------------------|--------|---------|-----------------------------------------------------------------|--------|
| Real estate loans:          |   |                                  |    |   |                         |   |    |                          |   |   |               |   |   |    |    |   |                       |   |    |                                                            |   |
| Commercial                  |   | $                                     | — |   |                         | $      | — |                          |   | $      | 1,341              |   |   | $       | 1,341   |   |                       | $      | 95,475  |                                                            |   | $ | 96,816 |   |   | $ | — |   |
| Residential                 |   |                                  | 685     |   |                         |   | 422     |                          |   |   | 4,784              |   |   |    | 5,891   |   |                       |   | 156,052 |                                                            |   |   | 161,943 |   |   |   | 465 |   |
| Construction                |   |                                  | 1,647   |   |                         |   | — |                          |   |   | 2,552              |   |   |    | 4,199   |   |                       |   | 22,507  |                                                            |   |   | 26,706 |   |   |   | — |   |
| Commercial loans and leases |   |                                  | 124     |   |                         |   | 25      |                          |   |   | 527                |   |   |    | 676     |   |                       |   | 23,860  |                                                            |   |   | 24,536 |   |   |   | — |   |
| Municipal loans             |   |                                  | — |   |                         |   | — |                          |   |   | —            |   |   |    | — |   |                       |   | 3,075   |                                                            |   |   | 3,075 |   |   |   | — |   |
| Consumer loans              |   |                                  | 52      |   |                         |   | — |                          |   |   | —            |   |   |    | 52      |   |                       |   | 3,561   |                                                            |   |   | 3,613 |   |   |   | — |   |
| Total                       |   | $                                     | 2,508   |   |                         | $      | 447     |                          |   | $      | 9,204              |   |   | $       | 12,159  |   |                       | $      | 304,530 |                                                            |   | $ | 316,689 |   |   | $ | 465 |   |

|                   |   | 30-59 DaysPast Due (A) |    |   | 60-89 DaysPast Due |   |    | Greater than90 Days |   |   | Total PastDue |   |   | Current |    |   | Total LoansReceivable |   |    | Total Loans> 90 days &Accruing |   |
|-----------------------------|--------|---------------------------------------|---------|--------|------------------------------|--------|---------|-------------------------------|--------|--------|--------------------|--------|--------|---------|---------|--------|----------------------------|--------|---------|-----------------------------------------------------------|--------|
| Real estate loans:          |   |                                  |    |   |                         |   |    |                          |   |   |               |   |   |    |    |   |                       |   |    |                                                      |   |
| Commercial                  |   | $                                     | — |   |                         | $      | — |                          |   | $      | —            |   |   | $       | — |   |                       | $      | 94,595  |                                                      |   | $ | 94,595 |   |   | $ | — |   |
| Residential                 |   |                                  | 2,069   |   |                         |   | 538     |                          |   |   | 5,221              |   |   |    | 7,828   |   |                       |   | 159,334 |                                                      |   |   | 167,162 |   |   |   | 60 |   |
| Construction                |   |                                  | 4,909   |   |                         |   | — |                          |   |   | —            |   |   |    | 4,909   |   |                       |   | 21,908  |                                                      |   |   | 26,817 |   |   |   | — |   |
| Commercial loans and leases |   |                                  | — |   |                         |   | 203     |                          |   |   | 527                |   |   |    | 730     |   |                       |   | 21,630  |                                                      |   |   | 22,360 |   |   |   | — |   |
| Municipal loans             |   |                                  | — |   |                         |   | — |                          |   |   | —            |   |   |    | — |   |                       |   | 2,718   |                                                      |   |   | 2,718 |   |   |   | — |   |
| Consumer loans              |   |                                  | 191     |   |                         |   | 11      |                          |   |   | 14                 |   |   |    | 216     |   |                       |   | 3,727   |                                                      |   |   | 3,943 |   |   |   | — |   |
| Total                       |   | $                                     | 7,169   |   |                         | $      | 752     |                          |   | $      | 5,762              |   |   | $       | 13,683  |   |                       | $      | 303,912 |                                                      |   | $ | 317,595 |   |   | $ | 60 |   |

----

|                                          |   | RecordedBalance |    |   | Unpaid PrincipalBalance |   |    | SpecificAllowance |   |   | Average Investmentin Impaired Loans(1) |   |   | Interest IncomeRecognized(2) |    |
|-----------------------------------------------|--------|-----------------|---------|--------|------------------------------|--------|---------|-------------------|--------|--------|-------------------------------------------------------|--------|--------|-----------------------------------|---------|
| Loans without a specific valuation allowance: |   |            |    |   |                         |   |    |              |   |   |                                                  |   |   |                              |    |
| Real estate loans:                            |   |            |    |   |                         |   |    |              |   |   |                                                  |   |   |                              |    |
| Commercial                                    |   | $               | — |   |                         | $      | — |              |   | $      | N/A                                                   |   |   | $                                 | — |   |   | $ | — |   |
| Residential                                   |   |            | — |   |                         |   | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Construction                                  |   |            | — |   |                         |   | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Commercial loans and leases                   |   |            | — |   |                         |   | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Municipal loans                               |   |            | — |   |                         |   | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Consumer loans                                |   |            | — |   |                         |   | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Total                                         |   |            | — |   |                         |   | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
|                                          |   |            |    |   |                         |   |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| Loans with a specific valuation allowance:    |   |            |    |   |                         |   |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| Real estate loans:                            |   |            |    |   |                         |   |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| Commercial                                    |   | $               | 6,081   |   |                         | $      | 6,081   |              |   | $      | 556                                                   |   |   | $                                 | 6,184   |   |   | $ | 2 |   |
| Residential                                   |   |            | 5,817   |   |                         |   | 5,820   |              |   |   | 845                                                   |   |   |                              | 6,596   |   |   |   | 42 |   |
| Construction                                  |   |            | 4,474   |   |                         |   | 4,534   |              |   |   | 595                                                   |   |   |                              | 5,109   |   |   |   | 14 |   |
| Commercial loans and leases                   |   |            | 1,014   |   |                         |   | 1,014   |              |   |   | 97                                                    |   |   |                              | 1,035   |   |   |   | — |   |
| Municipal loans                               |   |            | — |   |                         |   | — |              |   |   | —                                               |   |   |                              | — |   |   |   | — |   |
| Consumer loans                                |   |            | 60      |   |                         |   | 60      |              |   |   | 8                                                     |   |   |                              | 51      |   |   |   | — |   |
| Total                                         |   | $               | 17,446  |   |                         | $      | 17,509  |              |   | $      | 2,101                                                 |   |   | $                                 | 18,975  |   |   | $ | 58 |   |
|                                          |   |            |    |   |                         |   |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| All Impaired Loans                            |   | $               | 17,446  |   |                         | $      | 17,509  |              |   | $      | 2,101                                                 |   |   | $                                 | 18,975  |   |   | $ | 58 |   |

| (1)  | Includes all loans that were classified as impaired at any time during the quarter, not just impaired loans at March 31, 2011, and their average balance for only the time in the quarter during which they were classified as impaired. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2)  | Interest recorded in income only during the time in the quarter the loans were classified as impaired, for all loans that were classified as impaired at any time during the quarter ended March 31, 2011. |
|-----------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                          |   | RecordedBalance |    |   | Unpaid PrincipalBalance |    |    | SpecificAllowance |   |   | Average Investmentin Impaired Loans(1) |   |   | Interest IncomeRecognized(2) |    |
|-----------------------------------------------|--------|-----------------|---------|--------|------------------------------|---------|---------|-------------------|--------|--------|-------------------------------------------------------|--------|--------|-----------------------------------|---------|
| Loans without a specific valuation allowance: |   |            |    |   |                         |    |    |              |   |   |                                                  |   |   |                              |    |
| Real estate loans:                            |   |            |    |   |                         |    |    |              |   |   |                                                  |   |   |                              |    |
| Commercial                                    |   | $          | — |   |                         | $  | — |              |   | $      | N/A                                                   |   |   | $                            | — |   |   | $ | — |   |
| Residential                                   |   |            | 60      |   |                         |    | 60      |              |   |   | N/A                                                   |   |   |                              | 78      |   |   |   | — |   |
| Construction                                  |   |            | — |   |                         |    | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Commercial loans and leases                   |   |            | — |   |                         |    | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Municipal loans                               |   |            | — |   |                         |    | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Consumer loans                                |   |            | — |   |                         |    | — |              |   |   | N/A                                                   |   |   |                              | — |   |   |   | — |   |
| Total                                         |   | $               | 60      |   |                         | $       | 60      |              |   |   | N/A                                                   |   |   | $                                 | 78      |   |   |   | — |   |
|                                          |   |            |    |   |                         |    |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| Loans with a specific valuation allowance:    |   |            |    |   |                         |    |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| Real estate loans:                            |   |            |    |   |                         |    |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| Commercial                                    |   | $               | 6,288   |   |                         | $       | 6,288   |              |   | $      | 406                                                   |   |   | $                                 | 4,835   |   |   | $ | 333 |   |
| Residential                                   |   |            | 7,544   |   |                         |    | 7,544   |              |   |   | 876                                                   |   |   |                              | 6,911   |   |   |   | 190 |   |
| Construction                                  |   |            | 5,694   |   |                         |    | 5,694   |              |   |   | 797                                                   |   |   |                              | 7,739   |   |   |   | 285 |   |
| Commercial loans and leases                   |   |            | 1,055   |   |                         |    | 1,055   |              |   |   | 97                                                    |   |   |                              | 783     |   |   |   | 30 |   |
| Municipal loans                               |   |            | — |   |                         |    | — |              |   |   | —                                               |   |   |                              | — |   |   |   | — |   |
| Consumer loans                                |   |            | 42      |   |                         |    | 42      |              |   |   | 8                                                     |   |   |                              | 49      |   |   |   | — |   |
| Total                                         |   | $               | 20,623  |   |                         | $       | 20,623  |              |   | $      | 2,184                                                 |   |   | $                                 | 20,317  |   |   | $ | 838 |   |
|                                          |   |            |    |   |                         |    |    |              |   |   |                                                  |   |   |                              |    |   |   |   |   |   |
| All Impaired Loans                            |   | $               | 20,683  |   |                         | $       | 20,683  |              |   | $      | 2,184                                                 |   |   | $                                 | 20,395  |   |   | $ | 838 |   |

----

| Loans Accounted for on a Non-Accrual Basis |   |
|--------------------------------------------------------------------------|--------|
|                                                                     |   |   |   |   |   |   |
|                                                                     |   | At March 31, |   |   | At December 31, |   |
|                                                                     |   | 2011 |   |   | 2010 |   |
| Real estate loans:                                                       |   |   |   |   |   |   |
| Commercial                                                               |   | $ | 1,341 |   |   | $ | — |   |
| Residential                                                              |   |   | 4,328 |   |   |   | 6,258 |   |
| Construction                                                             |   |   | 4,200 |   |   |   | 4,184 |   |
| Commercial loans and leases                                              |   |   | 552 |   |   |   | 731 |   |
| Municipal loans                                                          |   |   | — |   |   |   | — |   |
| Consumer loans                                                           |   |   | — |   |   |   | 14 |   |
| Total                                                                    |   | $ | 10,421 |   |   | $ | 11,187 |   |

| § | Financial Accounting Standards Board (FASB) |
|--------|---------------------------------------------|

|   | o | ASU No. 2010-20, Receivables (Topic 310):  Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. In July 2010, the Financial Accounting Standards board (“FASB”) issued ASU No. 2010-20, Receivables (Topic 310):  Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses. ASU 2010-20 requires that more information be disclosed about the credit quality of a company’s loans and the allowance for loan losses held against those loans. A company is required to disaggregate new and existing disclosure based on how it develops its allowance for loan losses and how it manages credit exposures. Existing disclosures to be presented on a disaggregated basis include a roll-forward of the allowance for loan losses, the related recorded investment in such loans, the nonaccrual status of loans, and impaired loans. Additional disclosure is also required about the credit quality indicators of loans by class at the end of the reporting period, the aging of past due loans, information about troubled debt restructurings, and significant purchases and sales of loans during the reporting period by class. For public companies, ASU 2010-20 requires certain disclosures as of the end of a reporting period effective for periods ending on or after December 15, 2010. Other required disclosures about activity that occurs during a reporting period are effective for periods beginning on or after December 15, 2010. The Company adopted the applicable required additional disclosures effective December 31, 2010, and adoption of these additional disclosures did not have a material effect on its financial position or results of operations. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | o | ASU No. 211-02; In April 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-02 “Receivables (Topic 310) – A Creditor’s Determination of Whether a Restructuring is a Troubled Debt Restructuring.”   ASU 2011-02 clarifies whether loan modifications constitute troubled debt restructuring.  In evaluating whether a restructuring constitutes a troubled debt restructuring, a creditor must separately conclude that both of the following exist: (a) the restructuring constitutes a concession; and (b) the debtor is experiencing financial difficulties.  ASU 2011-02 is effective for the first interim and annual period beginning on or after June 15, 2011, and should be applied retrospectively to the beginning of the annual period of adoption.  We are assessing the impact of ASU 2011-02 on our financial condition, results of operations, and disclosures. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                       |   |            |   |   | Fair Value Measurements Using                                              |   |
|------------------------------------------------------------|--------|-----------------|--------|--------|-------------------------------------------------------------------------------------------|--------|
| Available-for-sale securities:                        |   | Fair Value |   |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
|                                                       |   |            |   |   |                                                                                      |   |   |   |   |   |   |   |
| At March 31, 2011:                                         |   |            |   |   |                                                                                      |   |   |   |   |   |   |   |
| Ginnie Mae and GSE mortgage-backed pass-through securities |   | $               | 23,883 |   |                                                                                      | $      | — |   |   | $ | 23,883 |   |   | $ | — |   |
| Ginnie Mae collateralized mortgage obligations             |   |            | 5,000  |   |                                                                                      |   | — |   |   |   | 5,000 |   |   |   | — |   |
| Municipal securities                                       |   |            | 2,212  |   |                                                                                      |   | — |   |   |   | 2,212 |   |   |   | — |   |
| Mutual fund                                                |   |            | 1,674  |   |                                                                                      |   | 1,674 |   |   |   | — |   |   |   | — |   |
|                                                       |   | $               | 32,769 |   |                                                                                      | $      | 1,674 |   |   | $ | 31,095 |   |   | $ | — |   |
|                                                       |   |            |   |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| At December 31, 2010:                                      |   |            |   |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Ginnie Mae and GSE mortgage-backed pass-through securities |   | $               | 29,436 |   |                                                                                      | $      | — |   |   | $ | 29,436 |   |   | $ | — |   |
| Ginnie Mae collateralized mortgage obligations             |   |            | 5,341  |   |                                                                                      |   | — |   |   |   | 5,341 |   |   |   |   |   |
| Municipal securities                                       |   |            | 2,164  |   |                                                                                      |   | — |   |   |   | 2,164 |   |   |   | — |   |
| Mutual fund                                                |   |            | 1,667  |   |                                                                                      |   | 1,667 |   |   |   | — |   |   |   | — |   |
|                                                       |   | $               | 38,608 |   |                                                                                      | $      | 1,667 |   |   | $ | 36,941 |   |   | $ | — |   |

----

|                             |   |            |   |   | Fair Value Measurements Using                                              |   |
|----------------------------------|--------|-----------------|--------|--------|-------------------------------------------------------------------------------------------|--------|
|                             |   | Fair Value |   |   | Quoted Prices inActive Markets forIdentical Assets(Level 1) |   |   | Significant OtherObservable Inputs(Level 2) |   |   | SignificantUnobservableInputs(Level 3) |   |
| At March 31, 2011:               |   |            |   |   |                                                                                      |   |   |   |   |   |   |   |
| Impaired loans                   |   | $               | 5,482  |   |                                                                                      | $      | — |   |   | $ | — |   |   | $ | 5,482 |   |
| Other real estate owned          |   |            | 167    |   |                                                                                      |   | — |   |   |   | — |   |   |   | 167 |   |
|                             |   |            |   |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| At December  31, 2010: |   |            |   |   |                                                                                      |   |   |   |   |   |   |   |   |   |   |   |
| Impaired loans                   |   | $               | 17,388 |   |                                                                                      | $      | — |   |   | $ | — |   |   | $ | 17,388 |   |
| Other real estate owned          |   |            | 4,028  |   |                                                                                      |   | — |   |   |   | — |   |   |   | 4,028 |   |

|                                     |   | March 31, 2011 |    |   | December 31, 2010 |   |
|------------------------------------------|--------|--------------------------|---------|--------|-----------------------------|--------|
|                                     |   | CarryingValue            |    |   | FairValue                   |   |   | Carrying Value |   |   | Fair Value |   |
| Assets                                   |   |                     |    |   |                        |   |   |   |   |   |   |   |
| Cash and cash equivalents                |   | $                        | 31,262  |   |                        | $      | 31,262 |   |   | $ | 11,747 |   |   | $ | 11,747 |   |
| Investment securities available for sale |   |                     | 32,769  |   |                        |   | 32,769 |   |   |   | 38,608 |   |   |   | 38,608 |   |
| Loans held for sale                      |   |                     | 532     |   |                        |   | 532 |   |   |   | 91 |   |   |   | 91 |   |
| Loans                                    |   |                     | 309,035 |   |                        |   | 314,928 |   |   |   | 312,715 |   |   |   | 318,753 |   |
| Stock in FHLB                            |   |                     | 5,101   |   |                        |   | 5,101 |   |   |   | 5,101 |   |   |   | 5,101 |   |
| Mortgage servicing rights                |   |                     | 656     |   |                        |   | 656 |   |   |   | 689 |   |   |   | 689 |   |
| Interest and dividends receivable        |   |                     | 1,021   |   |                        |   | 1,021 |   |   |   | 1,065 |   |   |   | 1,065 |   |
|                                     |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                              |   |                     |    |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                                 |   |                     | 354,965 |   |                        |   | 357,122 |   |   |   | 337,978 |   |   |   | 340,430 |   |
| Borrowings                               |   |                     | 45,810  |   |                        |   | 44,203 |   |   |   | 51,810 |   |   |   | 50,061 |   |
| Drafts payable                           |   |                     | 1,018   |   |                        |   | 1,018 |   |   |   | 1,594 |   |   |   | 1,594 |   |
| Interest and dividends payable           |   |                     | 696     |   |                        |   | 696 |   |   |   | 143 |   |   |   | 143 |   |

----

|   | · | Ameriana Insurance Agency, a wholly-owned subsidiary of Ameriana Bank, entered into an agreement in April 2011 to purchase a book of business of another insurance agency located in its market area that had 2010 commission income totaling about $135,000.  The transaction is expected to close near mid-year 2011. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Ameriana Bank added an employee stock ownership plan component (KSOP) to its 401(k) Plan (“Plan”) effective April 1, 2011.  Employees of Ameriana Bank and any affiliated companies are eligible to participate in the Plan.  The matching contributions made to the “Plan” by Ameriana Bank and affiliated companies will be used to purchase shares of Ameriana Bancorp stock. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Consistent with its capital contingency plan, the Company paid only a de minimis quarterly dividend of $0.01 per share. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | All three of the Bank’s capital ratios at March 31, 2011 were considerably above the levels required under regulatory guidelines to be considered “well capitalized,” and exceeded the higher standards as established in the Board resolution addressed below. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net interest income for the first quarter of 2011 was $146,000, or 4.4%, higher than the same quarter in 2010,   despite a $10.4 million decrease in average interest-earning assets, that resulted from balance sheet management strategies that were designed to increase the Bank’s regulatory capital ratios. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net interest margin of 3.76% on a fully tax-equivalent basis for the first quarter of 2011 represented a two basis points decrease from the fourth quarter of 2010, but was 25 basis points higher than the same period of 2010.  The improvement over the same quarter a year earlier resulted primarily from a significant reduction in the Bank’s average cost of deposits. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Due to a continuing elevated level of non-performing loans, the Bank recorded a $360,000 provision for loan losses in the first quarter of 2011, compared to $555,000 in the fourth quarter of 2010, and $360,000 in the year earlier quarter. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | Other income of $1.4 million for the first quarter of 2011 represented a $37,000, or 2.7%, increase from the total for the same quarter of 2010, and resulted primarily from a $112,000 increase in other real estate owned income, reduced by a decrease of $52,000 in gains on sales of available-for-sale investment securities, and a $34,000 drop in gains from mortgage banking sales. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other expense for the first quarter of 2011 of $4.4 million was $115,000, or 2.7%, higher than the same quarter in 2010, with the most significant change being a $129,000 increase in salaries and employee benefits. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The Company had income before income taxes of $57,000 for the first quarter of 2011, but recorded an income tax benefit of $64,000 that resulted primarily from a significant amount of tax-exempt income from bank-owned life insurance. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Interest-bearing demand deposits increased $18.9 million from $8.1 million at December 31, 2010 to $27.0 million at March 31, 2011, of which $26.9 million was invested at the Federal Reserve Bank of Chicago. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A $5.8 million decrease in the investment portfolio during the first quarter of 2011 to $32.8 million resulted primarily from $4.1 million in sales of mortgage-backed securities and $1.5 million in principal payments on mortgage-backed securities. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net loans receivable of $309.0 million at March 31, 2011 represented a decrease of $3.7 million, or 1.2%, for the first quarter of 2011, due primarily to a $5.2 million reduction in the residential mortgage loan portfolio that was reflective of both a weak housing market and the Bank’s mortgage-banking strategy. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Total non-performing loans of $10.9 million, or 3.5% of total net loans at March 31, 2011, represented a decrease of $361,000 from December 31, 2010. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The allowance for loan losses of $4.4 million at March 31, 2011 was 1.41% of total loans and 40.6% of non-performing loans, compared to ratios of 1.33% and 37.5%, respectively, at December 31, 2010. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other real estate owned of $9.0 million at March 31, 2011 represented a decrease of $40,000 from December 31, 2010, with one property added and four sales during the quarter. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | As of March 31, 2011, the Company did not own Fannie Mae or Freddie Mac preferred stock or private-label mortgage-backed securities.  As a matter of policy, the Company has not originated or purchased sub-prime loans. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | During the first quarter of 2011, total deposits increased by $17.0 million, or 5.0%, to $355.0 million, as the Bank maintained its strong focus on nurturing existing and attracting new core deposit relationships, while allowing the more rate-sensitive accounts to run off.  The deposit growth included $6.2 million in callable brokered certificates of deposit, of which $6.0 million was used to repay a maturing note payable to the Federal Home Loan Bank (“FHLB”). |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The repayment of the $6.0 million FHLB note reduced total borrowings to $45.8 million, or 11.2% of the Company’s total liabilities as of March 31, 2011. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Adopt a capital plan to increase its Tier 1 Leverage Ratio to 8.50% by June 30, 2010 and to maintain a Total Risk-Based Capital Ratio of 12.00%; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Adopt a written plan to lower classified assets; |
|--------|--------|--------------------------------------------------|

|   | · | Formulate and implement a written profit plan; |
|--------|--------|------------------------------------------------|

|   | · | Receive prior written consent from the FDIC and the Indiana Department of Financial Institutions before declaring or paying any dividends; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Strive to reduce total holdings of bank-owned life insurance; and |
|--------|--------|-------------------------------------------------------------------|

|   | · | Furnish quarterly progress reports regarding the Bank’s compliance with all provisions of the resolution. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | being our customers’ first choice for financial advice and solutions; |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | informing and educating customers on the basics of money management; and |
|--------|--------|--------------------------------------------------------------------------|

|   | · | understanding and meeting customers’ financial needs throughout their life cycle. |
|--------|--------|-----------------------------------------------------------------------------------------|

----

----

----

----

|                              |   | (Dollars in thousands)                 |   |
|-----------------------------------|--------|--------------------------------------------------|--------|
|                              |   | Three Months Ended March 31, |   |
|                              |   | 2011                                             |   |   | 2010 |   |
| Balance at beginning of quarter   |   | $                                                | 4,212  |   |   | $ | 4,005 |   |
| Provision for loan losses         |   |                                             | 360    |   |   |   | 360 |   |
| Charge-offs                       |   |                                             | (175   | ) |   |   | (540 | ) |
| Recoveries                        |   |                                             | 19     |   |   |   | 138 |   |
| Net charge-offs                   |   |                                             | (156   | ) |   |   | (402 | ) |
| Balance at end of period          |   | $                                                | 4,416  |   |   | $ | 3,963 |   |
| Allowance to total loans          |   |                                             | 1.41   | % |   |   | 1.23 | % |
| Allowance to non-performing loans |   |                                             | 40.57  | % |   |   | 42.22 | % |

|                                                  |   | (Dollars in thousands) |   |
|-------------------------------------------------------|--------|----------------------------------|--------|
|                                                  |   | March 31,                   |   |
|                                                  |   | 2011                             |   |   | 2010 |   |
|                                                  |   |                             |   |   |   |   |
| Loans accounted for on a non-accrual basis            |   | $                                | 10,421 |   |   | $ | 8,935 |   |
|                                                  |   |                             |   |   |   |   |   |   |
| Accruing loans contractually past due 90 days or more |   |                             | 465    |   |   |   | 451 |   |
|                                                  |   |                             |   |   |   |   |   |   |
| Total of non-accrual and 90 days past due loans (1)   |   | $                                | 10,886 |   |   | $ | 9,386 |   |
| Percentage of total net loans                         |   |                             | 3.52   | % |   |   | 2.94 | % |
|                                                  |   |                             |   |   |   |   |   |   |
| Other non-performing assets (2)                       |   | $                                | 9,027  |   |   | $ | 6,622 |   |
| Total of non-performing assets                        |   | $                                | 19,913 |   |   | $ | 16,008 |   |
| Percentage of total assets                            |   |                             | 4.51   | % |   |   | 3.63 | % |
|                                                  |   |                             |   |   |   |   |   |   |
| Troubled debt restructurings in nonaccrual total (1)  |   | $                                | 1,124  |   |   | $ | — |   |
| Total troubled debt restructurings                    |   | $                                | 8,825  |   |   | $ | 714 |   |

----

| (1) | Total nonaccrual loans at March 31, 2011 included $1.1 million of  troubled debt restructurings. |
|-----|------------------------------------------------------------------------------------------------------------|

| (2) | Other non-performing assets represent property acquired through foreclosure or repossession. This property is carried at the lower of its fair market value or its carrying value. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | A $112,000 increase in other real estate owned rental income from $100,000 for the first quarter of 2010 to $212,000 that was primarily related to the mid-2010 acquisition of a strip commercial center; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net gains on sales of available-for-sale securities decreased $52,000 from $104,000 for the first quarter of 2010 from four sales totaling $3.6 million to $52,000 for the first quarter of 2011 from two sales totaling $4.1 million; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A $34,000 decrease in gains on sales of loans and servicing rights to $32,000 for the first quarter of 2011 from $66,000 for the same quarter a year earlier, that related primarily to weak market conditions with minimal refinancing activity in the most recently completed quarter. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The $2.4 million total cost for salaries and employee benefits for the first quarter of 2011 was $129,000, or 5.7%, higher than the year earlier quarter, due primarily to annual salary increases, the added cost of filling vacant positions, an increase in retail incentive awards related to deposit goals, higher unemployment tax, and a $39,000 increase in funding costs for the frozen multi-employer defined benefit retirement plan, partly offset by a $20,000 decrease in employee health insurance expense.  In light of the impact of poor economic conditions on the earnings of the Company, senior management agreed to forego salary increases for 2010 and 2011. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | The $39,000, or 9.6% increase in net occupancy expense to $447,000 that was related primarily to a $35,000 refund of prior years’ real estate taxes that was received in the first quarter of 2010 as a result of successfully contesting the tax assessment on one of the Bank’s offices. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | A decrease of $58,000 in legal and professional fees was due primarily to a lower expense recorded for legal fees in the first quarter of 2011, and a $25,000 recruiting fee that was incurred in the first quarter of 2010, while no recruiting fees were incurred in the first quarter of 2011. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| March 31, 2011                                                          |   |                |
|-----------------------------------------------------------------------------------|--------|---------------------|
|                                                                              |   | Actual Capital |   |   | Required ForAdequate Capital |   |   | To BeWell Capitalized |
|                                                                              |   | Amount              |   |   | Ratio |   |   | Amount |   |   | Ratio |   |   | Amount |   |   | Ratio |
| Total risk-based capital ratio(risk based capital to risk-weighted assets)        |   | $                   | 41,349 |   |   |   | 13.08 | % |   | $ | 25,294 |   |   |   | 8.00 | % |   | $ | 31,626 |   |   |   | 10.00 | % |
| Tier 1 risk-based capital ratio(tier 1 capital to risk-weighted assets)           |   | $                   | 37,375 |   |   |   | 11.82 | % |   | $ | 12,647 |   |   |   | 4.00 | % |   | $ | 18,975 |   |   |   | 6.00 | % |
| Tier 1 leverage ratio(tier 1 capital  to adjusted average total assets) |   | $                   | 37,375 |   |   |   | 8.74 | % |   | $ | 12,835 |   |   |   | 3.00 | % |   | $ | 21,003 |   |   |   | 5.00 | % |

| December 31, 2010                                                       |   |                |
|-----------------------------------------------------------------------------------|--------|---------------------|
|                                                                              |   | Actual Capital |   |   | Required ForAdequate Capital |   |   | To BeWell Capitalized |
|                                                                              |   | Amount              |   |   | Ratio |   |   | Amount |   |   | Ratio |   |   | Amount |   |   | Ratio |
| Total risk-based capital ratio(risk based capital to risk-weighted assets)        |   | $                   | 41,468 |   |   |   | 13.11 | % |   | $ | 25,300 |   |   |   | 8.00 | % |   | $ | 31,626 |   |   |   | 10.00 | % |
| Tier 1 risk-based capital ratio(tier 1 capital to risk-weighted assets)           |   | $                   | 37,493 |   |   |   | 11.86 | % |   | $ | 12,650 |   |   |   | 4.00 | % |   | $ | 18,975 |   |   |   | 6.00 | % |
| Tier 1 leverage ratio(tier 1 capital  to adjusted average total assets) |   | $                   | 37,493 |   |   |   | 8.93 | % |   | $ | 12,602 |   |   |   | 3.00 | % |   | $ | 21,003 |   |   |   | 5.00 | % |

| March 31, 2011                                                          |   |                |
|-----------------------------------------------------------------------------------|--------|---------------------|
|                                                                              |   | Actual Capital |   |   | Required ForAdequate Capital |   |   | To BeWell Capitalized |
|                                                                              |   | Amount              |   |   | Ratio |   |   | Amount |   |   | Ratio |   |   | Amount |   |   | Ratio |
| Total risk-based capital ratio(risk based capital to risk-weighted assets)        |   | $                   | 41,724 |   |   |   | 13.08 | % |   | $ | 25,516 |   |   |   | 8.00 | % |   | $ | 31,895 |   |   |   | 10.00 | % |
| Tier 1 risk-based capital ratio(tier 1 capital to risk-weighted assets)           |   | $                   | 37,750 |   |   |   | 11.84 | % |   | $ | 12,758 |   |   |   | 4.00 | % |   | $ | 19,137 |   |   |   | 6.00 | % |
| Tier 1 leverage ratio(tier 1 capital  to adjusted average total assets) |   | $                   | 37,750 |   |   |   | 8.82 | % |   | $ | 12,843 |   |   |   | 3.00 | % |   | $ | 21,407 |   |   |   | 5.00 | % |

----

| December 31, 2010                                                       |   |                |
|-----------------------------------------------------------------------------------|--------|---------------------|
|                                                                              |   | Actual Capital |   |   | Required ForAdequate Capital |   |   | To BeWell Capitalized |
|                                                                              |   | Amount              |   |   | Ratio |   |   | Amount |   |   | Ratio |   |   | Amount |   |   | Ratio |
| Total risk-based capital ratio(risk based capital to risk-weighted assets)        |   | $                   | 41,762 |   |   |   | 13.10 | % |   | $ | 25,513 |   |   |   | 8.00 | % |   | $ | 31,891 |   |   |   | 10.00 | % |
| Tier 1 risk-based capital ratio(tier 1 capital to risk-weighted assets)           |   | $                   | 37,787 |   |   |   | 11.85 | % |   | $ | 12,756 |   |   |   | 4.00 | % |   | $ | 19,135 |   |   |   | 6.00 | % |
| Tier 1 leverage ratio(tier 1 capital  to adjusted average total assets) |   | $                   | 37,787 |   |   |   | 8.99 | % |   | $ | 12,611 |   |   |   | 3.00 | % |   | $ | 21,019 |   |   |   | 5.00 | % |

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| No.    |   | Description                             |
|--------|--------|-----------------------------------------|
|   |   |                                    |
| 31     |   | Rule 13a-14(a)/15d-14(a) Certifications |
|   |   |                                    |
| 32     |   | Section 1350 Certifications             |

----

|                                     | AMERIANA BANCORP                      |
|------------------------------------------|---------------------------------------|
|                                     |                                  |
| DATE:  May  13, 2011 | /s/ Jerome J. Gassen                  |
|                                     | Jerome J. Gassen                      |
|                                     | President and Chief Executive Officer |
|                                     | (Duly Authorized Representative)      |
|                                     |                                  |
| DATE:  May  13, 2011 | /s/ John J. Letter                    |
|                                     | John J. Letter                        |
|                                     | Senior Vice President-Treasurer and   |
|                                     | Chief Financial Officer               |
|                                     | (Principal Financial Officer          |
|                                     | and Accounting Officer)               |

----