----

**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-QSB**

**QUARTERLY      REPORT PURSUANT TO SECTION 13 OR 15(**
**d**
**)**

**OF      THE SECURITIES EXCHANGE ACT OF 1934**

**For      the quarterly period ended September 30, 2007**

**T      BANCSHARES, INC.**

| **Texas**                                      |   | **71-0919962**                     |
|------------------------------------------------|--------|------------------------------------|
| (State                or other jurisdiction of |   | (I.R.S.                Employer    |
| incorporation                or organization)  |   | Identification                No.) |

----

**T      BANCSHARES , INC.**

|                    |                                                                           | PAGE |
|-------------------------|--------------------------------------------------------------------------------|------|
| PART                I.  | FINANCIAL                INFORMATION                                           | 3    |
| ITEM                1.  | Financial                Statements                                            | 3    |
| ITEM                2.  | Management’s                Discussion and Analysis or Plan of Operation | 16   |
| ITEM                3.  | Controls                and Procedures                                         | 29   |
| PART                II. | OTHER                INFORMATION                                               | 30   |
| ITEM                1.  | Legal                Proceedings                                               | 30   |
| ITEM                2.  | Unregistered                Sales of Equity Securities and Use of Proceeds     | 30   |
| ITEM                3.  | Defaults                Upon Senior Securities                                 | 30   |
| ITEM                4.  | Submission                of Matters to a Vote of Security Holders             | 30   |
| ITEM                5.  | Other                Information                                               | 30   |
| ITEM                6.  | Exhibits                and Reports on Form 8-K                                | 30   |

----

**PART      I.**
**FINANCIAL      INFORMATION**

**ITEM      1.**
**Financial      Statements**

**FIRST      METROPLEX CAPITAL, INC.**

**CONSOLIDATED      STATEMENTS OF FINANCIAL CONDITION**

| **(000's)**                                                                                                                                                    |   | **September 30, 2007** |    | **December 31,****2006** |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------|---------|-------------------------------|--------|
|                                                                                                                                                           |   | **(unaudited)**                  |    |                          |   |
|                                                                                                                                                           |   |                             |    |                          |   |
| **ASSETS**                                                                                                                                                     |   |                             |    |                          |   |
|                                                                                                                                                           |   |                             |    |                          |   |
| Cash                and due from banks                                                                                                                         |   | $                                | 1,801   |                          | $      | 1,716 |   |
| Federal                funds sold                                                                                                                              |   |                             | 14,170  |                          |   | 36,050 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Total                cash and cash equivalents                                                                                                                 |   |                             | 15,971  |                          |   | 37,766 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Investments                restricted, at cost                                                                                                                 |   |                             | 499     |                          |   | 468 |   |
| Held                to maturity, restricted                                                                                                                    |   |                             | 991     |                          |   | 988 |   |
| Loans,                net of allowance for loan losses of $1,450 and $1,000,                respectively                                                       |   |                             | 111,920 |                          |   | 88,083 |   |
| Bank                premises and equipment, net                                                                                                                |   |                             | 1,763   |                          |   | 1,754 |   |
| Other                Assets                                                                                                                                    |   |                             | 950     |                          |   | 1,332 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Total                Assets                                                                                                                                    |   | $                                | 132,094 |                          | $      | 130,391 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| **LIABILITIES**                                                                                                                                                |   |                             |    |                          |   |   |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Demand                Deposits:                                                                                                                                |   |                             |    |                          |   |   |   |
| Noninterest-bearing                                                                                                                                            |   | $                                | 11,940  |                          | $      | 25,127 |   |
| Interest-bearing                                                                                                                                               |   |                             | 63,814  |                          |   | 56,373 |   |
| Time                deposits $100,000 and over                                                                                                                 |   |                             | 27,043  |                          |   | 21,073 |   |
| Other                time deposits                                                                                                                             |   |                             | 14,822  |                          |   | 14,561 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Total                Deposits                                                                                                                                  |   |                             | 117,619 |                          |   | 117,134 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Other                liabilities                                                                                                                               |   |                             | 680     |                          |   | 179 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Total                liabilities                                                                                                                               |   |                             | 118,299 |                          |   | 117,313 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| **Shareholders'                Equity**                                                                                                                        |   |                             |    |                          |   |   |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Common                Stock, $ .01 par value; 10,000,000 shares authorized; 1,699,001 and                1,690,150 shares issued and outstanding, respectively |   |                             | 17      |                          |   | 17 |   |
| Additional                paid-in capital                                                                                                                      |   |                             | 16,735  |                          |   | 16,572 |   |
| Retained                deficit                                                                                                                                |   |                             | (2,957  | )                             |   | (3,511 | ) |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Total                shareholders' equity                                                                                                                      |   |                             | 13,795  |                          |   | 13,078 |   |
|                                                                                                                                                           |   |                             |    |                          |   |   |   |
| Total                Liabilities and Shareholders' Equity                                                                                                      |   | $                                | 132,094 |                          | $      | 130,391 |   |

----

**T      BANCSHARES, INC.**

**CONSOLIDATED      STATEMENTS OF INCOME**

**(Unaudited)**

|                                                               |   | **Three Months Ended September 30,** |      | **Nine Months Ended September 30,** |   |
|--------------------------------------------------------------------|--------|----------------------------------------------------------|-----------|---------------------------------------------------------|--------|
| **(000's)**                                                        |   | **2007**                                                 |      | **2006**                                                |   | **2007** |   | **2006** |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |
| **Interest                Income**                                 |   |                                                     |      |                                                    |   |   |   |   |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |
| Loan,                including fees                                |   | $                                                        | 2,402     |                                                    | $      | 1,342 |   | $ | 6,671 |   | $ | 2,810 |   |
| Securities,                restricted                              |   |                                                     | 19        |                                                    |   | 6 |   |   | 59 |   |   | 19 |   |
| Federal                funds sold                                  |   |                                                     | 174       |                                                    |   | 108 |   |   | 894 |   |   | 553 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Total                interest income                               |   |                                                     | 2,595     |                                                    |   | 1,456 |   |   | 7,624 |   |   | 3,382 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| **Interest                Expense**                                |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Deposits                                                           |   |                                                     | 1,207     |                                                    |   | 489 |   |   | 3,654 |   |   | 1,055 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Net                interest income                                 |   |                                                     | 1,388     |                                                    |   | 967 |   |   | 3,970 |   |   | 2,327 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Provision                for loan losses                           |   |                                                     | 150       |                                                    |   | 150 |   |   | 450 |   |   | 475 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Net                interest income after provision for loan losses |   |                                                     | 1,238     |                                                    |   | 817 |   |   | 3,520 |   |   | 1,852 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| **Noninterest                Income**                              |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Trust                income                                        |   |                                                     | 2,475     |                                                    |   | - |   |   | 6,890 |   |   | - |   |
| Service                fees                                        |   |                                                     | 155       |                                                    |   | 307 |   |   | 1,330 |   |   | 493 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Total                noninterest income                            |   |                                                     | 2,630     |                                                    |   | 307 |   |   | 8,220 |   |   | 493 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| **Noninterest                Expense**                             |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Salaries                and employee benefits                      |   |                                                     | 733       |                                                    |   | 574 |   |   | 2,077 |   |   | 1,672 |   |
| Occupancy                and equipment                             |   |                                                     | 287       |                                                    |   | 185 |   |   | 791 |   |   | 461 |   |
| Trust                expenses                                      |   |                                                     | 2,203     |                                                    |   |   |   |   | 6,469 |   |   |   |   |
| Professional                fees                                   |   |                                                     | 192       |                                                    |   | 45 |   |   | 492 |   |   | 125 |   |
| Other                                                              |   |                                                     | 475       |                                                    |   | 237 |   |   | 1,357 |   |   | 629 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Total                noninterest expense                           |   |                                                     | 3,890     |                                                    |   | 1,041 |   |   | 11,186 |   |   | 2,887 |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| **Net                Income (Loss)**                               |   | $                                                        | (22       | )                                                       | $      | 83 |   | $ | 554 |   | $ | (542 | ) |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| **Earning                (loss) per common share:**                |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Basic                                                              |   |                                                     | (0.01     | )                                                       |   | 0.05 |   |   | 0.33 |   |   | (0.32 | ) |
| Diluted                                                            |   |                                                     |      |                                                    |   | 0.05 |   |   | 0.32 |   |   |   |   |
|                                                               |   |                                                     |      |                                                    |   |   |   |   |   |   |   |   |   |
| Weighted                average common shares outstanding          |   |                                                     | 1,695,848 |                                                    |   | 1,680,150 |   |   | 1,695,750 |   |   | 1,680,150 |   |
| Weighted                average diluted shares outstanding         |   |                                                     |      |                                                    |   | 1,713,974 |   |   | 1,738,980 |   |   | - |   |

----

**T      BANCSHARES, INC.**

**CONSOLIDATED      STATEMENTS OF INCOME**

**(Unaudited)**

|                                              |   |                  |   |                          |   |                      |   |                                          |               |      |   |
|---------------------------------------------------|--------|-----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------|--------|-----------------------------------------------|--------------------|-----------|--------|
| **(000's)**                                       |   | **Common Stock** |   | **Additional                Paid-inCapital**                                                                                                     |   | **Retained Deficit** |   | **Accumulated OtherComprehensiveIncome** |               | **Total** |   |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |
| **BALANCE,                December 31, 2005**     |   | $                     | 17     |                                                                                                                                             | $      | 16,382                    |   | $                                             | (3,523             | )         | $      | - |   | $ | 12,876 |   |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| Comprehensive                income:              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| Net                income (loss) — YTD |   |                  |   |                                                                                                                                             |   |                      |   |                                          | (542               | )         |   |   |   |   | (542 | ) |
| Total                comprehensive income (loss)  |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   | (542 | ) |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| Stock                based compensation           |   |                  |   |                                                                                                                                             |   | 57                        |   |                                          |     |      |   |   |   |   | 57 |   |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| **BALANCE,                September 30, 2006**    |   | $                     | 17     |                                                                                                                                             | $      | 16,439                    |   | $                                             | (4,065             | )         | $      | - |   | $ | 12,391 |   |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| **BALANCE,                December 31, 2006**     |   | $                     | 17     |                                                                                                                                             | $      | 16,572                    |   | $                                             | (3,511             | )         | $      | - |   | $ | 13,078 |   |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| Comprehensive                income:              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| Net                income — YTD             |   |                  |   |                                                                                                                                             |   |                      |   |                                          | 554                |      |   |   |   |   | 554 |   |
| Total                comprehensive income         |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   | 554 |   |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| Exercise                of warrants               |   |                  |   |                                                                                                                                             |   | 98                        |   |                                          |               |      |   |   |   |   | 98 |   |
| Exercise                of stock options          |   |                  |   |                                                                                                                                             |   | 10                        |   |                                          |               |      |   |   |   |   | 10 |   |
| Stock                based compensation           |   |                  |   |                                                                                                                                             |   | 55                        |   |                                          |               |      |   |   |   |   | 55 |   |
|                                              |   |                  |   |                                                                                                                                             |   |                      |   |                                          |               |      |   |   |   |   |   |   |
| **BALANCE,                September 30, 2007**    |   | $                     | 17     |                                                                                                                                             | $      | 16,735                    |   | $                                             | (2,957             | )         | $      | - |   | $ | 13,795 |   |

----

**T      BANCSHARES, INC.**

**CONSOLIDATED      STATEMENT OF CASH FLOWS**

**(Unaudited)**

|                                                                                                                              |   | **Nine Months Ended September 30,** |    |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|---------|
| **(000's)**                                                                                                                       |   | **2007**                                                |    | **2006** |   |
|                                                                                                                              |   |                                                    |    |   |   |
| **Cash                Flows from Operating Activities**                                                                           |   |                                                    |    |   |   |   |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Net                Income                                                                                                         |   | $                                                       | 554     |   | $ | (542 | ) |
| Adjustments                  to reconcile net income (loss) to net                  cash provided (used) by operating activities: |   |                                                    |    |   |   |   |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Provision                for loan losses                                                                                          |   |                                                    | 450     |   |   | 475 |   |
| Depreciation                and amortization                                                                                      |   |                                                    | 399     |   |   | 214 |   |
| Accretion                of discount                                                                                              |   |                                                    | (12     | ) |   | - |   |
| Stock                based compensation                                                                                           |   |                                                    | 55      |   |   | 57 |   |
| Net                change in other assets                                                                                         |   |                                                    | 381     |   |   | (622 | ) |
| Net                change in other liabilities                                                                                    |   |                                                    | 501     |   |   | 67 |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Net                cash provided (used) by operating activities                                                                   |   |                                                    | 2,328   |   |   | (351 | ) |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| **Cash                Flows from Investing Activities**                                                                           |   |                                                    |    |   |   |   |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Purchase                of securities held to maturity                                                                            |   |                                                    | (991    | ) |   |   |   |
| Proceeds                from maturity of securities                                                                               |   |                                                    | 1,000   |   |   | - |   |
| Purchase                of Federal Home Loan Bank stock                                                                           |   |                                                    | (31     | ) |   | (48 | ) |
| Net                change in loans                                                                                                |   |                                                    | (24,287 | ) |   | (40,288 | ) |
| Purchases                of premises and equipment                                                                                |   |                                                    | (408    | ) |   | (901 | ) |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Net                cash used in investing activities                                                                              |   |                                                    | (24,717 | ) |   | (41,237 | ) |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| **Cash                Flows from Financing Activities**                                                                           |   |                                                    |    |   |   |   |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Net                change in demand deposits                                                                                      |   |                                                    | (13,187 | ) |   | 7,997 |   |
| Net                change in time deposits                                                                                        |   |                                                    | 13,673  |   |   | 27,978 |   |
| Exercise                of stock options                                                                                          |   |                                                    | 10      |   |   | - |   |
| Exercise                of warrants                                                                                               |   |                                                    | 98      |   |   | - |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Net                cash provided by financing activities                                                                          |   |                                                    | 594     |   |   | 35,975 |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Net                change in cash and cash equivalents                                                                            |   |                                                    | (21,795 | ) |   | (5,613 | ) |
| Cash                and cash equivalents at beginning of period                                                                   |   |                                                    | 37,766  |   |   | 20,418 |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Cash                and cash equivalents at end of period                                                                         |   | $                                                       | 15,971  |   | $ | 14,805 |   |
|                                                                                                                              |   |                                                    |    |   |   |   |   |
| Supplemental                disclosures of cash flow information                                                                  |   |                                                    |    |   |   |   |   |
| Cash                paid during the period for                                                                                    |   |                                                    |    |   |   |   |   |
| Interest                                                                                                                          |   | $                                                       | 3,615   |   | $ | 1,022 |   |
| Income                taxes                                                                                                       |   | $                                                       | -       |   | $ | - |   |

----

**T      BANCSHARES, INC.**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**NOTE      1.**
**BASIS      OF PRESENTATION**

**Organization      and Nature of Operations**

**NOTE      2. ADOPTION      OF NEW ACCOUNTING POLICIES**

*,      Share-Based Payment, *
*Stock-Based      Compensation*

*Accounting      for Stock Issued to Employees*

*Stock      Options*

*Accounting      for Uncertainty in Income Taxes - An interpretation of FASB Statement      109*
*Accounting      for Income Taxes*

----

**Note      3.**
**      LOANS**

| **(000's)**                                          |   | **September 30,****2007** |    | **December 31,****2006** |   |
|------------------------------------------------------|--------|--------------------------------|---------|-------------------------------|--------|
|                                                 |   |                           |    |                          |   |
| Commercial                and industrial             |   | $                              | 78,437  |                          | $      | 54,835 |   |
| Consumer                installment                  |   |                           | 3,447   |                          |   | 3,992 |   |
| Real                estate — mortgage     |   |                           | 19,733  |                          |   | 21,073 |   |
| Real                estate — construction |   |                           | 11,494  |                          |   | 9,297 |   |
| Other                                                |   |                           | 476     |                          |   | 126 |   |
|                                                 |   |                           |    |                          |   |   |   |
|                                                 |   |                           | 113,587 |                          |   | 89,323 |   |
|                                                 |   |                           |    |                          |   |   |   |
| Less                allowance for loan losses        |   |                           | 1,450   |                          |   | 1,000 |   |
| Less                deferred loan fees               |   |                           | 217     |                          |   | 240 |   |
|                                                 |   |                           |    |                          |   |   |   |
| Net                loans                             |   | $                              | 111,920 |                          | $      | 88,083 |   |

| **(000's)**                                               |   | **September 30,****2007** |   | **December 31,****2006** |   |
|-----------------------------------------------------------|--------|--------------------------------|--------|-------------------------------|--------|
|                                                      |   |                           |   |                          |   |
| Balance                at beginning of period             |   | $                              | 1,000  |                          | $      | 400 |   |
| Provision                charged to operations            |   |                           | 450    |                          |   | 600 |   |
| Loans                charged off                          |   |                           | -      |                          |   | - |   |
| Recoveries                of loans previously charged off |   |                           | -      |                          |   | - |   |
|                                                      |   |                           |   |                          |   |   |   |
| Balance                at end of period                   |   | $                              | 1,450  |                          | $      | 1,000 |   |

----

**Note      4.**
**SECURITIES**

|                               |   | **September                30, 2007** |   |
|------------------------------------|--------|---------------------------------------|--------|
| **(000's)**                        |   | **Amortized****Cost**                 |   | **Unrealized****Gains** |   | **Unrealized****Losses** |   | **Estimated****Fair Value** |   |
|                               |   |                                  |   |   |   |   |   |   |   |
| U.S.                Treasury Notes |   | $                                     | 991    |   | $ | - |   | $ | - |   | $ | 991 |   |

|                               |   | **December                31, 2006** |   |
|------------------------------------|--------|--------------------------------------|--------|
| **(000's)**                        |   | **Amortized****Cost**                |   | **Unrealized****Gains** |   | **Unrealized****Losses** |   | **Estimated****Fair Value** |   |
|                               |   |                                 |   |   |   |   |   |   |   |
| U.S.                Treasury Notes |   | $                                    | 988    |   | $ | - |   | $ | - |   | $ | 988 |   |

**NOTE      5.**
**RELATED      PARTIES**

**NOTE      6.**
**BANK      PREMISES AND EQUIPMENT**

| **(000's)**                                   |   | **September 30,****2007** |   | **December 31,****2006** |   |
|-----------------------------------------------|--------|--------------------------------|--------|-------------------------------|--------|
| Leasehold                improvements         |   | $                              | 929    |                          | $      | 767 |   |
| Furniture                and equipment        |   |                           | 1,783  |                          |   | 1,537 |   |
|                                          |   |                           | 2,712  |                          |   | 2,304 |   |
| Less:                accumulated depreciation |   |                           | 949    |                          |   | 550 |   |
| Balance                at end of period       |   | $                              | 1,763  |                          | $      | 1,754 |   |

----

**NOTE        7. OTHER        ASSETS**

| **(000's)**                                    |   | **September 30,****2007** |   | **December 31,****2006** |   |
|------------------------------------------------|--------|--------------------------------|--------|-------------------------------|--------|
|                                           |   |                           |   |                          |   |
| Accrued                interest receivable     |   | $                              | 532    |                          | $      | 421 |   |
| Indentifiable                intangible assets |   |                           | 305    |                          |   | 133 |   |
| Accounts                receivable             |   |                           | 95     |                          |   | 778 |   |
| Other                                          |   |                           | 18     |                          |   | - |   |
|                                           |   |                           |   |                          |   |   |   |
|                                           |   | $                              | 950    |                          | $      | 1,332 |   |

**NOTE      8.**
**DEPOSITS**

| **(000's)**                                                   |   | **As                of September 30, 2007** |    | **As                of December 31, 2006** |   |
|---------------------------------------------------------------|--------|---------------------------------------------|---------|--------------------------------------------|--------|
|                                                          |   |                                        |    |                                       |   |   |   |   |   |
| Noninterest                bearing demand                     |   | $                                           | 11,940  |                                       |   | 10 | % | $ | 25,127 |   |   | 21.5 | % |
| Interest                bearing demand (NOW)                  |   |                                        | 1,530   |                                       |   | 1 | % |   | 1,853 |   |   | 1.6 | % |
| Money                market accounts                          |   |                                        | 62,019  |                                       |   | 53 | % |   | 54,520 |   |   | 46.5 | % |
| Savings                accounts                               |   |                                        | 265     |                                       |   | 0 | % |   | 305 |   |   | 0.2 | % |
| Certificates                of deposit, less than $100,000    |   |                                        | 14,822  |                                       |   | 13 | % |   | 14,256 |   |   | 12.2 | % |
| Certificates                of deposit, greater than $100,000 |   |                                        | 27,043  |                                       |   | 23 | % |   | 21,073 |   |   | 18.0 | % |
|                                                          |   | $                                           | 117,619 |                                       |   | 100 | % | $ | 117,134 |   |   | 100.0 | % |

| 2007   |   | $      | 11,078 |   |
|--------|--------|--------|--------|--------|
| 2008   |   |   | 10,892 |   |
| 2009   |   |   | 2,310  |   |
| 2010   |   |   | 2,121  |   |
| 2011   |   |   | 11,986 |   |
| 2012   |   |   | 3,478  |   |
|   |   |   |   |   |
| Total  |   | $      | 41,865 |   |

----

**Note        9. **
**Other        liabilities**

| **(000's)**                                     |   | **September                  30, 2007** |   | **December                  31,****2006** |   |
|-------------------------------------------------|--------|-----------------------------------------|--------|-------------------------------------------|--------|
|                                            |   |                                    |   |                                      |   |
| Interest                  Payable               |   | $                                       | 115    |                                      | $      | 76 |   |
| Audit                  Fees                     |   |                                    | 131    |                                      |   | 94 |   |
| Incentive                  Compensation         |   |                                    | 159    |                                      |   | - |   |
| Legal                                           |   |                                    | 222    |                                      |   | - |   |
| Franchise                  & Property Taxes |   |                                    | 15     |                                      |   | 7 |   |
| Other                  Accruals                 |   |                                    | 38     |                                      |   | 2 |   |
|                                            |   | $                                       | 680    |                                      | $      | 179 |   |

**NOTE        10.**
**INCOME        TAXES**

**NOTE        11.**
**STOCK        OPTIONS**

----

|                                                  |   | **Number                  of****Shares****Underlying****Options** |    | **Weighted****Average****Exercise****Prices** |   |
|-------------------------------------------------------|--------|-------------------------------------------------------------------|---------|-----------------------------------------------|--------|
|                                                  |   |                                                              |    |                                          |   |
| Outstanding                  at beginning of the year |   |                                                              | 176,000 |                                          | $      | 10.05 |   |
| Granted                                               |   |                                                              | 25,000  |                                          |   | 13.00 |   |
| Exercised                                             |   |                                                              | 1,000   |                                          |   | 10.00 |   |
| Expired                  / forfeited                  |   |                                                              | 6,500   |                                          |   | 10.00 |   |
|                                                  |   |                                                              |    |                                          |   |   |   |
| Outstanding                  at end of period         |   |                                                              | 193,500 |                                          | $      | 10.44 |   |
| Exercisable                  at end of period         |   |                                                              | 63,900  |                                          | $      | 10.03 |   |
| Available                  for grant at end of period |   |                                                              | 55,500  |                                          |   |   |   |

|                                             |   | **Shares** |    | **Weighted****Average****Grant                  Date****Fair                  Value** |   |
|--------------------------------------------------|--------|------------|---------|---------------------------------------------------------------------------------------|--------|
|                                             |   |       |    |                                                                                  |   |
| Nonvested                  at January 1, 2007    |   |       | 112,600 |                                                                                  | $      | 2.15 |   |
| Granted                                          |   |       | 25,000  |                                                                                  |   | 5.16 |   |
| Vested                                           |   |       | 3,500   |                                                                                  |   | 2.39 |   |
| Forfeited                                        |   |       | 4,500   |                                                                                  |   | 2.11 |   |
|                                             |   |       |    |                                                                                  |   |   |   |
| Nonvested                  at September 30, 2007 |   |       | 129,600 |                                                                                  | $      | 2.73 |   |

**NOTE        12.**
**STOCK WARRANTS**

----

**NOTE        13.**
**COMMITMENTS        AND CONTINGENCIES**

**Employment        Agreements**

**NOTE        14.**
**REGULATORY        MATTERS**

----

| **(000's)**                                               |   | **Actual** |   | **For Capital Adequacy Purposes** |   | **To Be Well Capitalized Under**** Prompt Corrective Action ****Provisions** |   |
|-----------------------------------------------------------|--------|------------|--------|--------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|--------|
|                                                      |   | **Amount** |   | **Ratio**                                        |   | **Amount**                                                                                                           |   |   |   | **Ratio** |   | **Amount** |   |   |   | **Ratio** |   |
|                                                      |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |
| **As                  of September 30, 2007**             |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Capital (to Risk Weighted Assets)  |   | $          | 14,510 |                                             |   | 12.18                                                                                                                | %      | $ | 9,533 |   |   | ≥ |   |   | 8.00 | % | $ | 11,916 |   |   | ≥ |   |   | 10.00 | % |
|                                                      |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  1 Capital (to Risk Weighted Assets) |   |       | 13,060 |                                             |   | 10.96                                                                                                                | %      |   | 4,767 |   |   | ≥ |   |   | 4.00 | % |   | 7,150 |   |   | ≥ |   |   | 6.00 | % |
|                                                      |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  1 Capital (to Average Assets)       |   |       | 13,060 |                                             |   | 9.99                                                                                                                 | %      |   | 5,227 |   |   | ≥ |   |   | 4.00 | % |   | 6,534 |   |   | ≥ |   |   | 5.00 | % |
|                                                      |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **As                  of December 31, 2006**              |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Capital (to Risk Weighted Assets)  |   | $          | 13,351 |                                             |   | 13.55                                                                                                                | %      | $ | 7,885 |   |   | ≥ |   |   | 8.00 | % | $ | 9,856 |   |   | ≥ |   |   | 10.00 | % |
|                                                      |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  1 Capital (to Risk Weighted Assets) |   |       | 12,351 |                                             |   | 12.53                                                                                                                | %      |   | 3,943 |   |   | ≥ |   |   | 4.00 | % |   | 5,914 |   |   | ≥ |   |   | 6.00 | % |
|                                                      |   |       |   |                                             |   |                                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                  1 Capital (to Average Assets)       |   |       | 12,351 |                                             |   | 10.81                                                                                                                | %      |   | 4,571 |   |   | ≥ |   |   | 4.00 | % |   | 5,714 |   |   | ≥ |   |   | 5.00 | % |

**NOTE        15.**
**PARENT        COMPANY CONDENSED FINANCIAL STATEMENTS**

**T        BANCSHARES, INC.**

**CONDENSED        BALANCE SHEET**

**(Unaudited)**

| **(000's)**                                    |   | **September                  30, 2007** |   | **December                  31, 2006** |   |
|------------------------------------------------|--------|-----------------------------------------|--------|----------------------------------------|--------|
|                                           |   |                                    |   |                                   |   |
| **ASSETS**                                     |   |                                    |   |                                   |   |   |   |
|                                           |   |                                    |   |                                   |   |   |   |
| Cash                  and due from banks       |   | $                                       | 735    |                                   | $      | 727 |   |
| Investment                  in subsidiary      |   |                                    | 13,060 |                                   |   | 12,351 |   |
|                                           |   |                                    |   |                                   |   |   |   |
| Total                  Assets                  |   | $                                       | 13,795 |                                   | $      | 13,078 |   |
|                                           |   |                                    |   |                                   |   |   |   |
| **LIABILITIES                  AND CAPITAL**   |   |                                    |   |                                   |   |   |   |
|                                           |   |                                    |   |                                   |   |   |   |
| Capital                                        |   |                                    | 13,795 |                                   |   | 13,078 |   |
|                                           |   |                                    |   |                                   |   |   |   |
| Total                  Liabilities and Capital |   | $                                       | 13,795 |                                   | $      | 13,078 |   |

----

**T        BANCSHARES, INC.**

**CONDENSED        STATEMENT OF INCOME**

**(Unaudited)**

|                                                     |   | **Three Months Ended September 30,** |   | **Nine Months Ended September 30,** |   |
|----------------------------------------------------------|--------|----------------------------------------------------------|--------|---------------------------------------------------------|--------|
| **(000's)**                                              |   | **2007**                                                 |   | **2006**                                                |   | **2007** |   | **2006** |   |
|                                                     |   |                                                     |   |                                                    |   |   |   |   |   |
| Equity                  in income (loss) from subsidiary |   | $                                                        | 33     |                                                    | $      | 109 |   | $ | 709 |   | $ | (435 | ) |
|                                                     |   |                                                     |   |                                                    |   |   |   |   |   |   |   |   |   |
| Noninterest                  expense:                    |   |                                                     |   |                                                    |   |   |   |   |   |   |   |   |   |
| Professional                  and administrative         |   |                                                     | 34     |                                                    |   | 7 |   |   | 100 |   |   | 50 |   |
| Stock                  options                           |   |                                                     | 20     |                                                    |   | 19 |   |   | 55 |   |   | 57 |   |
| Total                  noninterest expenses              |   |                                                     | 54     |                                                    |   | 26 |   |   | 155 |   |   | 107 |   |
|                                                     |   |                                                     |   |                                                    |   |   |   |   |   |   |   |   |   |
| Net                  income (loss)                       |   | $                                                        | (21    | )                                                       | $      | 83 |   | $ | 554 |   | $ | (542 | ) |

----

**T      BANCSHARES, INC.**

**CONDENSED      STATEMENT OF CASH FLOWS**

**(Unaudited)**

|                                                                                                                              |   | **Nine Months Ended September 30,** |   |
|-----------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|
| **(000's)**                                                                                                                       |   | **2007**                                                |   | **2006** |   |
|                                                                                                                              |   |                                                    |   |   |   |
| **Cash                Flows from Operating Activities**                                                                           |   |                                                    |   |   |   |
|                                                                                                                              |   |                                                    |   |   |   |
| Net                Income                                                                                                         |   | $                                                       | 554    |   | $ | (542 | ) |
| Adjustments                  to reconcile net income (loss) to net cash provided (used) by                  operating activities: |   |                                                    |   |   |   |   |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Equity                in (earnings) loss of Bank                                                                                  |   |                                                    | (709   | ) |   | 435 |   |
| Stock                based compensation                                                                                           |   |                                                    | 55     |   |   | 57 |   |
| Net                change in other assets                                                                                         |   |                                                    | -      |   |   | 8 |   |
| Net                change in other liabilities                                                                                    |   |                                                    | -      |   |   | - |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Net                cash provided (used) by operating activities                                                                   |   |                                                    | (100   | ) |   | (42 | ) |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| **Cash                Flows from Investing Activities**                                                                           |   |                                                    |   |   |   |   |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Proceeds                from sale of premises and equipment                                                                       |   |                                                    | -      |   |   | - |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Net                cash used in investing activities                                                                              |   |                                                    | -      |   |   | - |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| **Cash                Flows from Financing Activities**                                                                           |   |                                                    |   |   |   |   |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Exercise                of warrants                                                                                               |   |                                                    | 108    |   |   | - |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Net                cash provided by financing activities                                                                          |   |                                                    | 108    |   |   | - |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Net                change in cash and cash equivalents                                                                            |   |                                                    | 8      |   |   | (42 | ) |
| Cash                and cash equivalents at beginning of period                                                                   |   |                                                    | 727    |   |   | 674 |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Cash                and cash equivalents at end of period                                                                         |   | $                                                       | 735    |   | $ | 632 |   |
|                                                                                                                              |   |                                                    |   |   |   |   |   |
| Supplemental                disclosures of cash flow information                                                                  |   |                                                    |   |   |   |   |   |
| Cash                paid during the period for                                                                                    |   |                                                    |   |   |   |   |   |
| Interest                                                                                                                          |   | $                                                       | -      |   | $ | - |   |
| Income                taxes                                                                                                       |   | $                                                       | -      |   | $ | - |   |

**ITEM      2.**
**Management’s      Discussion and Analysis or Plan of Operation**

----

|   | · | we                have limited operating history upon which to base an estimate of                our                future financial performance; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if                we are unable to implement our business plan and strategies, we will                be                hampered in our ability to develop business and serve our customers,                which, in turn, could have an adverse effect on our financial                performance; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we                are subject to significant government regulation and legislation                that                increases the cost of doing business and inhibits our ability to                compete; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if                we fail to retain our key employees, growth and profitability could                be                adversely affected; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we                face substantial competition in our primary market                area; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | if                we fail to sustain attractive investment returns to our Trust customers,                our growth and profitability in our Trust services could be adversely                affected; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we                have a significant dental loan concentration in which economic or                regulatory changes could adversely affect the ability of those customers                to fulfill their loan obligations; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | if                we fail to adequately address informal administrative actions with                the                Office of the Comptroller of the Currency, this may have an adverse                impact                on the Company’s operating results or financial condition; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we                compete in an industry that continually experiences technological                change,                and we may not be able to compete effectively with other banking                institutions with greater                resources; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                Bank’s current legally mandated lending limits are lower than those of                our                competitors, which may impair our ability to attract                borrowers; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an                economic downturn, especially one affecting our primary service area,                may                have an adverse effect on our financial                performance; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                in governmental economic and monetary policies, the Internal Revenue                Code                and banking and credit regulations, as well as other factors, will                affect                the demand for loans and the ability of the Bank to attract                deposits; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | changes                in the general level of interest rates and other economic factors                can                affect the Bank’s interest income by affecting the spread between                interest-earning assets and interest-bearing                liabilities; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | we                have no current intentions of paying cash                dividends; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | we                may not be able to raise additional capital on terms favorable to                us;                and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | our                directors and executive officers beneficially own a significant portion                of                our outstanding common stock. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**Executive      Overview**

***Introduction***

**Results      of Operations**

***Net      Interest Income and Net Interest Margin***

----

***Key      Performance Indicators at September 30, 2007***

|   | · | total                assets grew to $132.1 million at the end of the third quarter of                2007,                representing an increase of $1.7 million or 1.3%, from $130.4 million                at                the end of 2006; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | total                loans, net of allowance for loan losses, grew to $111.9 million at                the end                of the third quarter of 2007, representing an increase of $23.8 million                or                27.1%, from $88.1 million at the end of                2006; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | total                deposits remained stable at $117.6 million at the end of the third                quarter                of 2007, increasing marginally from $117.1 million at the end of                2006; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | total                revenue was $15.8 million for the nine months ended September 30,                2007                compared to $3.9 million for the nine months ended September 30,                2006,                representing an increase of 308.9%;                and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | net                income was $554,000 for the nine months ended September 30, 2007,                compared                to a net loss of $542,000 for the nine months ended September 30,                2006. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**FINANCIAL      SUMMARY**

**Consolidated      Daily Average Balances, Average Yields and Rates**

|                                                      |   | **Nine                Months Ended September 30,** |    |
|-----------------------------------------------------------|--------|----------------------------------------------------|---------|
|                                                      |   | **2007**                                           |    | **2006** |   |
| **(000'S)**                                               |   | **Average****Balance**                             |    | **Interest** |   | **Average****Yied** |   | **Average****Balance** |   | **Interest** |   | **Average****Yied** |   |
|                                                      |   |                                               |    |   |   |   |   |   |   |   |   |   |   |
| **Interest-earning                assets**                |   |                                               |    |   |   |   |   |   |   |   |   |   |   |
|                                                      |   |                                               |    |   |   |   |   |   |   |   |   |   |   |
| Loans,                net of reserve                      |   | $                                                  | 101,306 |   | $ | 6,671 |   |   | 8.8 | % | $ | 41,522 |   | $ | 2,810 |   |   | 9.0 | % |
| Federal                funds sold                         |   |                                               | 23,102  |   |   | 894 |   |   | 5.2 | % |   | 15,620 |   |   | 553 |   |   | 4.7 | % |
| Securities                                                |   |                                               | 1,478   |   |   | 59 |   |   | 5.3 | % |   | 420 |   |   | 19 |   |   | 6.0 | % |
| Total                earning assets                       |   |                                               | 125,886 |   |   | 7,624 |   |   | 8.1 | % |   | 57,562 |   |   | 3,382 |   |   | 7.8 | % |
| Cash                and other assets                      |   |                                               | 5,273   |   |   |   |   |   |   |   |   | 4,100 |   |   |   |   |   |   |   |
| Total                assets                               |   | $                                                  | 131,159 |   |   |   |   |   |   |   | $ | 61,662 |   |   |   |   |   |   |   |
|                                                      |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Interest-bearing                liabilities**           |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW                accounts                               |   | $                                                  | 1,698   |   | $ | 16 |   |   | 1.2 | % | $ | 1,536 |   | $ | 13 |   |   | 1.1 | % |
| Money                market accounts                      |   |                                               | 62,300  |   |   | 2,095 |   |   | 4.5 | % |   | 20,853 |   |   | 525 |   |   | 3.4 | % |
| Savings                accounts                           |   |                                               | 338     |   |   | 3 |   |   | 1.3 | % |   | 363 |   |   | 4 |   |   | 1.5 | % |
| Certificates                of deposit $100,000 or less   |   |                                               | 14,437  |   |   | 572 |   |   | 5.3 | % |   | 4,309 |   |   | 145 |   |   | 4.5 | % |
| Certificates                of deposit $100,000 or more   |   |                                               | 24,116  |   |   | 968 |   |   | 5.4 | % |   | 11,043 |   |   | 368 |   |   | 4.4 | % |
| Total                interest bearing deposits            |   |                                               | 102,889 |   |   | 3,654 |   |   | 4.7 | % |   | 38,104 |   |   | 1,055 |   |   | 3.7 | % |
| Noninterest                bearing deposits               |   |                                               | 14,889  |   |   |   |   |   |   |   |   | 11,661 |   |   |   |   |   |   |   |
| Other                liabilities                          |   |                                               | 624     |   |   |   |   |   |   |   |   | 111 |   |   |   |   |   |   |   |
| Stockholders                equity                        |   |                                               | 12,757  |   |   |   |   |   |   |   |   | 11,790 |   |   |   |   |   |   |   |
| Total                liabilities and stockholders' equity |   | $                                                  | 131,159 |   |   |   |   |   |   |   | $ | 61,666 |   |   |   |   |   |   |   |
|                                                      |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income                        |   |                                               |    |   |   | 3,970 |   |   |   |   |   |   |   |   | 2,327 |   |   |   |   |
| Net                interest spread                        |   |                                               |    |   |   |   |   |   | 3.3 | % |   |   |   |   |   |   |   | 4.1 | % |
| Net                interest margin                        |   |                                               |    |   |   |   |   |   | 4.2 | % |   |   |   |   |   |   |   | 5.4 | % |
|                                                      |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for loan loss                    |   |                                               |    |   |   | 450 |   |   |   |   |   |   |   |   | 475 |   |   |   |   |
| Non-interest                income                        |   |                                               |    |   |   | 8,220 |   |   |   |   |   |   |   |   | 493 |   |   |   |   |
| Non-interest                expense                       |   |                                               |    |   |   | 11,186 |   |   |   |   |   |   |   |   | 2,887 |   |   |   |   |
| Income                (loss) before income taxes          |   |                                               |    |   |   | 554 |   |   |   |   |   |   |   |   | (542 | ) |   |   |   |
| Income                taxes expense (benefit)             |   |                                               |    |   |   | - |   |   |   |   |   |   |   |   | - |   |   |   |   |
| Net                income (loss)                          |   |                                               |    |   | $ | 554 |   |   |   |   |   |   |   | $ | (542 | ) |   |   |   |
|                                                      |   |                                               |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                (loss) per share                  |   |                                               |    |   |   | 0.33 |   |   |   |   |   |   |   |   | (0.32 | ) |   |   |   |
| Return                on average equity                   |   |                                               |    |   |   | 5.8 | % |   |   |   |   |   |   |   | -6.13 | % |   |   |   |
| Return                on average assets                   |   |                                               |    |   |   | 1.69 | % |   |   |   |   |   |   |   | -3.52 | % |   |   |   |
| Equity                to assets ratio                     |   |                                               |    |   |   | 9.73 | % |   |   |   |   |   |   |   | 19.12 | % |   |   |   |

***Provision      for Loan Losses***

----

***Non-interest      Income***

***Noninterest      Expense***

***Income      Taxes***

**Financial      Condition**

----

***Short-Term      Investments and Interest-bearing Deposits in Other Financial      Institutions***

***Investment      Securities***

***Loan      Portfolio***

|                                                 |   | **As                of**         |    | **As                of**        |   |
|------------------------------------------------------|--------|----------------------------------|---------|---------------------------------|--------|
| **(000's)**                                          |   | **September 30, 2007** |    | **December 31, 2006** |   |
|                                                 |   |                             |    |                            |   |
| Commercial                and industrial             |   | $                                | 78,437  |                            | $      | 54,835 |   |
| Consumer                installment                  |   |                             | 3,447   |                            |   | 3,992 |   |
| Real                estate — mortgage     |   |                             | 19,733  |                            |   | 21,073 |   |
| Real                estate — construction |   |                             | 11,494  |                            |   | 9,297 |   |
| Other                                                |   |                             | 476     |                            |   | 126 |   |
|                                                 |   |                             | 113,587 |                            |   | 89,323 |   |
|                                                 |   |                             |    |                            |   |   |   |
| Less                allowance for loan losses        |   |                             | 1,450   |                            |   | 1,000 |   |
| Less                deferred loan fees               |   |                             | 217     |                            |   | 240 |   |
|                                                 |   | $                                | 111,920 |                            | $      | 88,083 |   |

----

|                                                  |   | **As                of September 30, 2007** |   |
|-------------------------------------------------------|--------|---------------------------------------------|--------|
|                                                  |   |                                        |   | **Over 1 Year through****5                Years** |   | **Over 5 Years** |   |   |   |
| **(000's)**                                           |   | **One Year or****Less**           |   | **Fixed Rate** |   | **Floating or                Adjustable****Rate** |   | **Fixed                Rate** |   | **Floating or                Adjustable****Rate** |   | **Total** |   |
|                                                  |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Commercial                and industrial              |   | $                                           | 21,641 |   | $ | 10,235 |   | $ | 1,666 |   | $ | 32,667 |   | $ | 12,228 |   | $ | 78,437 |   |
| Consumer                installment                   |   |                                        | 1,316  |   |   | 1,021 |   |   | 10 |   |   | 944 |   |   | 156 |   |   | 3,447 |   |
| Real                estate — mortgage*     |   |                                        | 6,679  |   |   | 6,482 |   |   | 3,075 |   |   | 1,493 |   |   | 1,578 |   |   | 19,307 |   |
| Real                estate — construction* |   |                                        | 8,116  |   |   | 2,022 |   |   | 209 |   |   | - |   |   | 2,030 |   |   | 12,377 |   |
| Other                                                 |   |                                        | 19     |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 19 |   |
| Total                                                 |   | $                                           | 37,771 |   | $ | 19,760 |   | $ | 4,960 |   | $ | 35,104 |   | $ | 15,992 |   | $ | 113,587 |   |

***Nonperforming      Loans and Assets***

----

***Allowance      for Loan Losses***

| **(000's)**                                          |   | **As                of****September                30, 2007** |   | **As                of****December                31, 2006**         |   |
|------------------------------------------------------|--------|---------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|
| **Allocated:**                                       |   | **Amount**                                                    |   | **Loan****Category                to****Gross                Loans** |   | **Amount** |   | **Loan****Category                to****Gross                Loans** |   |
|                                                 |   |                                                          |   |                                                                 |   |   |   |   |   |
| Commercial                and industrial             |   | $                                                             | 1,002  |                                                                 |   | 69.07 | % | $ | 556 |   |   | 55.60 | % |
| Consumer                installment                  |   |                                                          | 44     |                                                                 |   | 3.03 | % |   | 52 |   |   | 5.20 | % |
| Real                estate — mortgage     |   |                                                          | 246    |                                                                 |   | 17.00 | % |   | 270 |   |   | 27.00 | % |
| Real                estate — construction |   |                                                          | 158    |                                                                 |   | 10.90 | % |   | 122 |   |   | 12.20 | % |
| Total                allowance for loan losses       |   | $                                                             | 1,450  |                                                                 |   | 100.00 | % | $ | 1,000 |   |   | 100.00 | % |

***Nonearning      Assets***

***Deposits***

----

|                                                       |   | **For                the nine months ended** |    |
|------------------------------------------------------------|--------|----------------------------------------------|---------|
| **(000's)**                                                |   | **September                30, 2007**        |    | **September                30, 2006** |   |
|                                                       |   | **Average****Balance**                       |    | **Percent                of Deposits** |   | **Average****Rate** |   | **Average****Balance** |   | **Percent                of Deposits** |   | **Average****Rate** |   |
|                                                       |   |                                         |    |   |   |   |   |   |   |   |   |   |   |
| Noninterest                bearing deposits                |   | $                                            | 14,889  |   |   | 12.63 | % |   | 0.00 | % | $ | 11,661 |   |   | 23.43 | % |   | 0.00 | % |
| NOW                accounts                                |   |                                         | 1,698   |   |   | 1.44 | % |   | 1.22 | % |   | 1,536 |   |   | 3.09 | % |   | 1.13 | % |
| Money                market accounts                       |   |                                         | 62,300  |   |   | 52.90 | % |   | 4.48 | % |   | 20,853 |   |   | 41.90 | % |   | 3.36 | % |
| Savings                accounts                            |   |                                         | 338     |   |   | 0.29 | % |   | 1.33 | % |   | 363 |   |   | 0.73 | % |   | 1.47 | % |
| Certificates                of deposit, less than $100,000 |   |                                         | 14,437  |   |   | 12.26 | % |   | 5.29 | % |   | 4,309 |   |   | 8.66 | % |   | 4.49 | % |
| Certificates                of deposit, more than $100,000 |   |                                         | 24,116  |   |   | 20.48 | % |   | 5.35 | % |   | 11,043 |   |   | 22.19 | % |   | 4.44 | % |
|                                                       |   |                                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                deposits                              |   | $                                            | 117,778 |   |   | 100.00 | % |   | 4.73 | % | $ | 49,765 |   |   | 100.00 | % |   | 3.69 | % |

| **(000's)**                                        |   | **September 30,****2007** |   | **December 31,****2006** |   |
|----------------------------------------------------|--------|--------------------------------|--------|-------------------------------|--------|
|                                               |   |                           |   |                          |   |
| Three                months or less                |   | $                              | 6,474  |                          | $      | 1,221 |   |
| Over                three months through 12 months |   |                           | 8,525  |                          |   | 11,977 |   |
| Over                one year through three years   |   |                           | 2,493  |                          |   | 524 |   |
| Over                three years                    |   |                           | 9,551  |                          |   | 7,351 |   |
|                                               |   |                           |   |                          |   |   |   |
| Total                                              |   | $                              | 27,043 |                          | $      | 21,073 |   |

***Off-Balance      Sheet Arrangements***

***Borrowings***

----

|                                   |   | **As                of September 30, 2007** |   |
|----------------------------------------|--------|---------------------------------------------|--------|
| **(000's)**                            |   | **Less than One****Year**         |   | **One to Three****Years** |   | **Over Three to****Five                Years** |   | **Over Five****Years** |   |
|                                   |   |                                        |   |   |   |   |   |   |   |
| Operating                Leases        |   | $                                           | 278    |   | $ | 574 |   | $ | 589 |   | $ | 548 |   |
|                                   |   |                                        |   |   |   |   |   |   |   |   |   |   |   |
| Certificates                of deposit |   | $                                           | 21,907 |   | $ | 4,231 |   | $ | 15,727 |   | $ | - |   |

***Capital      Resources and Capital Adequacy Requirements***

----

| **(000's)**                                             |   | **Actual** |   | **For Capital Adequacy****Purposes** |   | **To Be Well Capitalized****Under Prompt Corrective****Action Provisions** |   |
|---------------------------------------------------------|--------|------------|--------|------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------|--------|
|                                                    |   | **Amount** |   | **Ratio**                                      |   | **Amount**                                                                                               |   | **Ratio** |   | **Amount** |   | **Ratio** |   |
|                                                    |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |
| **As                of September 30, 2007**             |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                Capital (to Risk Weighted Assets)  |   | $          | 14,510 |                                           |   | 12.18                                                                                                    | %      | $ | 9,533 | ≥  |   | 8.00 | % | $ | 11,916 | ≥  |   | 10.00 | % |
|                                                    |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 Capital (to Risk Weighted Assets) |   |       | 13,060 |                                           |   | 10.96                                                                                                    | %      |   | 4,767 | ≥ |   | 4.00 | % |   | 7,150 | ≥  |   | 6.00 | % |
|                                                    |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 Capital (to Average Assets)       |   |       | 13,060 |                                           |   | 9.99                                                                                                     | %      |   | 5,227 | ≥  |   | 4.00 | % |   | 6,534 | ≥  |   | 5.00 | % |
|                                                    |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                    |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **As                of December 31, 2006**              |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                Capital (to Risk Weighted Assets)  |   | $          | 13,351 |                                           |   | 13.55                                                                                                    | %      | $ | 7,885 | ≥  |   | 8.00 | % | $ | 9,856 | ≥  |   | 10.00 | % |
|                                                    |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 Capital (to Risk Weighted Assets) |   |       | 12,351 |                                           |   | 12.53                                                                                                    | %      |   | 3,943 | ≥  |   | 4.00 | % |   | 5,914 | ≥  |   | 6.00 | % |
|                                                    |   |       |   |                                           |   |                                                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier                1 Capital (to Average Assets)       |   |       | 12,351 |                                           |   | 10.81                                                                                                    | %      |   | 4,571 | ≥ |   | 4.00 | % |   | 5,714 | ≥  |   | 5.00 | % |

**Liquidity      Management**

----

***Quantitative      and Qualitative Disclosure About Market Risks***

|                                           |   | **Change in Future Net Interest Income****as of September 30, 2007** |   |
|------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------|--------|
|                                           |   | **Dollar Change**                                                                                            |   | **Percentage****Change** |   |
|                                           |   |                                                                                                              |   |   |   |
| +200                basis points over one year |   | $                                                                                                                 | (7,000 | ) |   | -0.13 | % |
| +100                basis points over one year |   |                                                                                                              | (1,000 | ) |   | -0.02 | % |
| -100                basis points over one year |   |                                                                                                              | 20,000 |   |   | 0.36 | % |
| -200                basis points over one year |   |                                                                                                              | 25,000 |   |   | 0.45 | % |

----

|                                                                                                            |   | **As                of June 30, 2007**                 |   |
|-----------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|--------|
|                                                                                                            |   | **Volumes                Subject to Repricing Within** |   |
|                                                                                                            |   |                                                   |   |
|                                                                                                            |   | **0 - 1****Days**                            |   | **2 - 90****Days** |   | **91 - 364****Days** |   | **1 - 3****Years** |   | **Over 3****Years** |   | **Non-interest                Sensitive** |   | **Total** |   |
| **Assets**                                                                                                      |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term                investments and federal funds sold                                                    |   | $                                                      | 14,170 |   | $ | - |   | $ | 56 |   | $ | - |   | $ | - |   | $ | 1,745 |   | $ | 15,971 |   |
| Investment                securities                                                                            |   |                                                   | -      |   |   | 991 |   |   | - |   |   | - |   |   | 499 |   |   | - |   |   | 1,490 |   |
| Loans                                                                                                           |   |                                                   | 41,921 |   |   | 7,394 |   |   | 17,927 |   |   | 17,353 |   |   | 28,775 |   |   | (1,450 | ) |   | 111,920 |   |
| Fixed                and other assets                                                                           |   |                                                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 2,713 |   |   | 2,713 |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                assets                                                                                     |   | $                                                      | 56,091 |   | $ | 8,385 |   | $ | 17,983 |   | $ | 17,353 |   | $ | 29,274 |   | $ | 3,008 |   | $ | 132,094 |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                and Shareholders' Equity**                                                         |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest-bearing,                interest-bearing checking, savings and money market                accounts |   | $                                                      | 60,470 |   | $ | - |   | $ | - |   | $ | 3,344 |   | $ | - |   | $ | 11,940 |   | $ | 75,754 |   |
| Certificates                of deposit                                                                          |   |                                                   | -      |   |   | 10,575 |   |   | 11,377 |   |   | 4,347 |   |   | 15,566 |   |   | - |   |   | 41,865 |   |
| Borrowed                funds                                                                                   |   |                                                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |
| Other                liabilities                                                                                |   |                                                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 680 |   |   | 680 |   |
| Shareholders'                equity                                                                             |   |                                                   | -      |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 13,795 |   |   | 13,795 |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                liabilities and shareholders' equity                                                       |   | $                                                      | 60,470 |   | $ | 10,575 |   | $ | 11,377 |   | $ | 7,691 |   | $ | 15,566 |   | $ | 26,415 |   | $ | 132,094 |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Period                gap                                                                                       |   |                                                   | (4,379 | ) |   | (2,190 | ) |   | 6,606 |   |   | 9,662 |   |   | 13,708 |   |   |   |   |   |   |   |
| Cumulative                gap                                                                                   |   |                                                   | (4,379 | ) |   | (6,569 | ) |   | 37 |   |   | 9,699 |   |   | 23,407 |   |   |   |   |   |   |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Period                gap to total assets                                                                       |   |                                                   | -3     | % |   | -2 | % |   | 5 | % |   | 7 | % |   | 10 | % |   |   |   |   |   |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Cumulative                gap to total assets                                                                   |   |                                                   | -3     | % |   | -5 | % |   | 0 | % |   | 7 | % |   | 18 | % |   |   |   |   |   |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                            |   |                                                   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

**ITEM      3.**
**Controls      and Procedures**

----

**PART      II.**
**OTHER      INFORMATION**

**ITEM      1.**
**Legal      Proceedings**

**ITEM      2. Unregistered      Sales of Equity Securities and Use of Proceeds**

**ITEM      3.**
**Defaults      Upon Senior Securities**

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

**ITEM      5.**
**Other      Information**

**ITEM      6.**
**Exhibits**

| **Exhibit                Number** |   | **Description                of Exhibit**                                                                                                                            |
|-----------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 10.1*                             |   | Form                of Executive Employment Agreement with Patrick Howard.                                                                                           |
| 10.2**                            |   | Form                of Executive Employment Agreement with Steve Jones.                                                                                              |
| 17.1*                             |   | Resignation                letter of James D. Rose                                                                                                                   |
| 31.1                         |   | Rule                13a-14(a) Certification of Chief Executive Officer.                                                                                              |
| 31.2                         |   | Rule                13a-14(a) Certification of Chief Financial Officer.                                                                                              |
| 32.1                         |   | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002. |

----

| *  |   | Incorporated                by reference to Exhibits from the Company’s Form 8-K filed on September 5,                2007. |
|----|--------|-----------------------------------------------------------------------------------------------------------------------------------|
| ** |   | Incorporated                by reference to Exhibits from the Company’s Form 8-K filed on October 5,                2007.   |

----

**SIGNATURES**

|                                   | T                BANCSHARES, INC. |
|----------------------------------------|-----------------------------------|
|                              |                         |                    |
| Date:                November 14, 2007 | By:                     | /s/                Patrick G. Adams |
|                                   |                              |   |
|                                   |                              | Patrick                G. Adams |
|                                   |                              | President                and Chief Executive Officer |

----