----

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**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 March 31, 2007**

**FIRST      METROPLEX CAPITAL, INC.**

| **Texas**                                                             |   | **71-0919962**                     |
|-----------------------------------------------------------------------|--------|------------------------------------|
| (State                or other jurisdiction of                        |   | (I.R.S.                Employer    |
| incorporation                or organization)                         |   | Identification                No.) |
|                                                                  |   |                               |
| 16000                Dallas Parkway, Suite 125, Dallas, Texas 75248   |
| (Address                of principal executive offices)               |
|                                                                  |
| (972)                720- 9000                                        |
| (Issuer’s                telephone number, including area code) |
|                                                                  |
|                                                                  |
|                                                                  |

----

----

**FIRST      METROPLEX CAPITAL, INC.**

|                                                                                                                    |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|
| PART                I.   FINANCIAL INFORMATION                                                           | 3      |
| ITEM                1.    Financial Statements                                                           | 3      |
| ITEM                2.    Management’s Discussion and Analysis or Plan of                Operation | 14     |
| ITEM                3.    Controls and Procedures                                                        | 28     |
|                                                                                                                    |   |
| PART                II.    OTHER INFORMATION                                                             | 28     |
| ITEM                1.    Legal Proceedings                                                              | 28     |
| ITEM                2.    Unregistered Sales of Equity Securities and Use of                Proceeds     | 28     |
| ITEM                3.    Defaults Upon Senior Securities                                                | 28     |
| ITEM                4.    Submission of Matters to a Vote of Security                Holders             | 28     |
| ITEM                5.    Other Information                                                              | 28     |
| ITEM                6.    Exhibits and Reports on Form 8-K                                               | 28     |

----

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

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

**FIRST      METROPLEX CAPITAL, INC.**

**CONSOLIDATED      BALANCE SHEETS**

|                                                                                                             |   | MARCH                31, 2007 |        | DECEMBER                31,2006 |   |
|------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|-------------|---------------------------------|--------|
|                                                                                                             |   |
|                                                                                                             |   |  (Unaudited)             |        | (Audited)                       |   |
| ASSETS                                                                                                           |   |                          |        |                            |   |
|                                                                                                             |   |                          |        |                            |   |
| Cash                and due from banks                                                                           |   | $                             | 3,090,000   |                            | $      | 1,716,000 |   |
| Federal                funds sold                                                                                |   |                          | 29,375,000  |                            |   | 36,050,000 |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
|   Total                cash and cash equivalents                                                       |   |                          | 32,465,000  |                            |   | 37,766,000 |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
| Investments                restricted, at cost                                                                   |   |                          | 468,000     |                            |   | 468,000 |   |
| Held                to maturity, restricted                                                                      |   |                          | 988,000     |                            |   | 988,000 |   |
| Loans,                less allowance for credit losses of $1,150,000 and $1,000,000,                respectively |   |                          | 97,159,000  |                            |   | 88,083,000 |   |
| Bank                premises and equipment, net                                                                  |   |                          | 1,968,000   |                            |   | 1,754,000 |   |
| Other                assets                                                                                      |   |                          | 865,000     |                            |   | 1,332,000 |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
| TOTAL                ASSETS                                                                                      |   | $                             | 133,913,000 |                            | $      | 130,391,000 |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
| LIABILITIES                AND SHAREHOLDERS' EQUITY                                                              |   |                          |             |                            |   |  |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
| LIABILITIES                                                                                                      |   |                          |             |                            |   |  |   |
| Demand                deposits                                                                                   |   |                          |             |                            |   |  |   |
|   Noninterest                bearing                                                              |   | $                             | 12,695,000  |                            | $      | 25,127,000 |   |
|   Interest                bearing                                                                 |   |                          | 70,554,000  |                            |   | 56,678,000 |   |
| Time                deposits $100,000 and over                                                              |   |                          | 22,434,000  |                            |   | 21,073,000 |   |
| Other                time deposits                                                                          |   |                          | 14,568,000  |                            |   | 14,256,000 |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
|   Total                deposits                                                                        |   |                          | 120,251,000 |                            |   | 117,134,000 |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
| Other                liabilities                                                                                 |   |                          | 437,000     |                            |   | 179,000 |   |
|                                                                                                             |   |                          |             |                            |   |  |   |
|   Total                liabilities                                                                     |   |                          | 120,688,000 |                            |   | 117,313,000 |   |
|                                                                                                             |   |                          |             |                            |   |   |   |
| SHAREHOLDERS'                EQUITY                                                                              |   |                          |             |                            |   |   |   |
| Common                stock, $0.01 par value                                                                     |   |                          |             |                            |   |   |   |
| 10,000,000                shares authorized                                                                 |   |                          |        |                            |   |   |   |
| 1,690,150                and 1,690,150 shares issued and outstanding, respectively                               |   |                          | 17,000      |                            |   | 17,000 |   |
| Additional                paid-in capital                                                                        |   |                          | 16,588,000  |                            |   | 16,572,000 |   |
| Retained                deficit                                                                                  |   |                          | (3,380,000  | )                               |   | (3,511,000 | ) |
|                                                                                                             |   |                          |             |                            |   |   |   |
|   Total                shareholders' equity                                                            |   |                          | 13,225,000  |                            |   | 13,078,000 |   |
|                                                                                                             |   |                          |             |                            |   |   |   |
| TOTAL                LIABILITIES AND SHAREHOLDERS' EQUITY                                                        |   | $                             | 133,913,000 |                            | $      | 130,391,000 |   |
|                                                                                                             |   |                          |        |                            |   |   |   |

----

**FIRST      METROPLEX CAPITAL, INC.**

**STATEMENT      OF OPERATIONS**

**(Unaudited)**

|                                                            |   | 3                MONTHS ENDEDMARCH                31, 2007 |      | 3                MONTHS ENDEDMARCH                31, 2006 |   |
|-----------------------------------------------------------------|--------|------------------------------------------------------------|-----------|------------------------------------------------------------|--------|
|                                                            |   |                                                       |      |                                                       |   |
| INTEREST                INCOME                                  |   |                                                       |      |                                                       |   |
| Interest                and fees on loans                       |   | $                                                          | 2,010,000 |                                                       | $      | 629,000 |   |
| Investment                securities                            |   |                                                       | 12,000    |                                                       |   | - |   |
| Restricted                investments                           |   |                                                       | 8,000     |                                                       |   | 6,000 |   |
| Federal                funds sold                               |   |                                                       | 380,000   |                                                       |   | 226,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| Total                interest income                       |   |                                                       | 2,410,000 |                                                       |   | 861,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| INTEREST                EXPENSE                                 |   |                                                       |      |                                                       |   |   |   |
| Deposits                                                        |   |                                                       | 1,160,000 |                                                       |   | 267,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| Interest                income, net                        |   |                                                       | 1,250,000 |                                                       |   | 594,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| PROVISION                FOR CREDIT LOSSES                      |   |                                                       | 150,000   |                                                       |   | 150,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| Interest                income after                  |   |                                                       |      |                                                       |   |   |   |
| provision                for credit losses                      |   |                                                       | 1,100,000 |                                                       |   | 444,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| OTHER                INCOME                                     |   |                                                       |      |                                                       |   |   |   |
| Trust                income                                     |   |                                                       | 2,078,000 |                                                       |   | - |   |
| Service                fees                                     |   |                                                       | 515,000   |                                                       |   | 52,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
|                                                            |   |                                                       | 2,593,000 |                                                       |   | 52,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| OTHER                EXPENSES                                   |   |                                                       |      |                                                       |   |   |   |
| Salaries                and employee benefits                   |   |                                                       | 647,000   |                                                       |   | 556,000 |   |
| Occupancy                expense                                |   |                                                       | 307,000   |                                                       |   | 131,000 |   |
| Professional                fees                                |   |                                                       | 2,258,000 |                                                       |   | 19,000 |   |
| Other                operating expenses                         |   |                                                       | 350,000   |                                                       |   | 152,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
|                                                            |   |                                                       | 3,562,000 |                                                       |   | 858,000 |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| NET                INCOME (LOSS)                                |   | $                                                          | 131,000   |                                                       | $      | (362,000 | ) |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| **Earnings                (loss) per common share:**            |   |                                                       |      |                                                       |   |   |   |
|                     Basic                   |   | $                                                          | 0.08      |                                                       | $      | (0.22 | ) |
|                     Diluted                 |   |                                                       | 0.08      |                                                       |   |   |   |
|                                                            |   |                                                       |      |                                                       |   |   |   |
| Weighted                average common shares outstanding  |   |                                                       | 1,690,150 |                                                       |   | 1,680,150 |   |
| Weighted                average diluted shares outstanding      |   |                                                       | 1,712,743 |                                                       |   |   |   |

----

**FIRST      METROPLEX CAPITAL, INC.**

**STATEMENT      OF CHANGES IN SHAREHOLDERS' EQUITY**

**(Unaudited)**

|                                          |   | Common                Stock |   | Additional                Paid-in Capital |   | Retained                Deficit |   | Accumulated                Other Comprehensive Income |       | Total  |   |
|-----------------------------------------------|--------|-----------------------------|--------|-------------------------------------------|--------|---------------------------------|--------|-------------------------------------------------------|------------|--------|--------|
|                                          |   |                        |   |                                      |   |                            |   |                                                  |       |   |   |
| BALANCE,                December 31, 2005     |   | $                           | 17,000 |                                      | $      | 16,382,000                      |   | $                                                     | (3,523,000 | )      | $      | — |   | $ | 12,876,000 |   |
| Comprehensive                income           |   |                        |   |                                      |   |                            |   |                                                  |       |   |   |   |   |   |   |   |
| Net                income - YTD          |   |                        |   |                                      |   |                            |   |                                                  | (362,000   | )      |   |   |   |   | (362,000 | ) |
| Total                comprehensive loss       |   |                        |   |                                      |   |                            |   |                                                  |       |   |   |   |   |   | (362,000 | ) |
|  Stock                based compensation |   |                        |   |                                      |   | 19,000                          |   |                                                  |       |   |   |   |   |   | 19,000 |   |
| BALANCE,                March 31, 2006        |   | $                           | 17,000 |                                      | $      | 16,401,000                      |   | $                                                     | (3,885,000 | )      | $      | — |   | $ | 12,533,000 |   |
|                                          |   |                        |   |                                      |   |                            |   |                                                  |       |   |   |   |   |   |   |   |
| BALANCE,                December 31, 2006     |   | $                           | 17,000 |                                      | $      | 16,572,000                      |   | $                                                     | (3,511,000 | )      | $      | — |   | $ | 13,078,000 |   |
| Comprehensive                income           |   |                        |   |                                      |   |                            |   |                                                  |       |   |   |   |   |   |   |   |
| Net                income - YTD          |   |                        |   |                                      |   |                            |   |                                                  | 131,000    |   |   |   |   |   | 131,000 |   |
| Total                comprehensive loss       |   |                        |   |                                      |   |                            |   |                                                  |       |   |   |   |   |   | 131,000 |   |
|  Stock                based compensation |   |                        |   |                                      |   | 16,000                          |   |                                                  |       |   |   |   |   |   | 16,000 |   |
| BALANCE,                March 31, 2007        |   | $                           | 17,000 |                                      | $      | 16,588,000                      |   | $                                                     | (3,380,000 | )      | $      | — |   | $ | 13,225,000 |   |
|                                          |   |                        |   |                                      |   |                            |   |                                                  |       |   |   |   |   |   |   |   |

----

**FIRST      METROPLEX CAPITAL, INC.**

**STATEMENT      OF CASH FLOWS**

**(Unaudited)**

|                                                                  |   | THREE                MONTHS ENDED MARCH 31, 2007 |       | THREE                MONTHS ENDED MARCH 31, 2006 |   |
|-----------------------------------------------------------------------|--------|--------------------------------------------------|------------|--------------------------------------------------|--------|
| CASH                FLOWS FROM OPERATING ACTIVITIES                   |   |                                             |       |                                             |   |
| Net                income (loss)                                      |   | $                                                | 131,000    |                                             | $      | (362,000 | ) |
| Adjustments                to reconcile net income (loss)             |   |                                             |            |                                             |   |  |   |
| to                net cash provided by (used in) operating activities |   |                                             |            |                                             |   |  |   |
|                                                                  |   |                                             |       |                                             |   |   |   |
| Provision                for credit losses                            |   |                                             | 150,000    |                                             |   | 150,000 |   |
| Depreciation                expense                                   |   |                                             | 124,000    |                                             |   | 57,000 |   |
| Provision                for stock based compensation                 |   |                                             | 16,000     |                                             |   | 19,000 |   |
| Accretion                of security discount                         |   |                                             | (12,000    | )                                                |   | - |   |
| Changes                in operating assets and liabilities:           |   |                                             |            |                                             |   |  |   |
| Other                assets                                           |   |                                             | 467,000    |                                             |   | (82,000 | ) |
| Other                liabilities                                      |   |                                             | 258,000    |                                             |   | (1,000 | ) |
| Net                cash provided by (used in) operating activities    |   |                                             | 1,134,000  |                                             |   | (219,000 | ) |
|                                                                  |   |                                             |       |                                             |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                   |   |                                             |       |                                             |   |   |   |
| Purchase                of securities held to maturity                |   |                                             | (988,000   | )                                                |   | - |   |
| Proceeds                on maturity of securities held to maturity    |   |                                             | 1,000,000  |                                             |   | - |   |
| Net                change in loans                                    |   |                                             | (9,226,000 | )                                                |   | (7,418,000 | ) |
| Purchases                of bank premises and equipment               |   |                                             | (338,000   | )                                                |   | (30,000 | ) |
| Net                cash used in investing activities                  |   |                                             | (9,552,000 | )                                                |   | (7,448,000 | ) |
|                                                                  |   |                                             |            |                                             |   |  |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                   |   |                                             |            |                                             |   |  |   |
| Net                change in demand deposits                          |   |                                             | 1,444,000  |                                             |   | 9,602,000 |   |
| Net                change in time deposits                            |   |                                             | 1,673,000  |                                             |   | 2,560,000 |   |
| Net                cash provided by financing activities              |   |                                             | 3,117,000  |                                             |   | 12,162,000 |   |
|                                                                  |   |                                             |            |                                             |   |  |   |
| Net                change in cash and cash equivalents           |   |                                             | (5,301,000 | )                                                |   | 4,495,000 |   |
|                                                                  |   |                                             |            |                                             |   |  |   |
| CASH                AND CASH EQUIVALENTS,                             |   |                                             |            |                                             |   |  |   |
| beginning                of period                                    |   |                                             | 37,766,000 |                                             |   | 20,418,000 |   |
|                                                                  |   |                                             |            |                                             |   |  |   |
| CASH                AND CASH EQUIVALENTS,                             |   |                                             |            |                                             |   |  |   |
| end                of period                                          |   | $                                                | 32,465,000 |                                             | $      | 24,913,000 |   |
|                                                                  |   |                                             |            |                                             |   |  |   |
| SUPPLEMENTAL                DISCLOSURE OF                             |   |                                             |            |                                             |   |  |   |
| CASH                FLOW INFORMATION                                  |   |                                             |            |                                             |   |  |   |
| Interest                paid                                          |   | $                                                | 1,152,000  |                                             | $      | 260,000 |   |
| Income                taxes paid                                      |   | $                                                | —    |                                             | $      | — |   |

----

**FIRST      METROPLEX CAPITAL, 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*

----

**NOTE      3.**
**LOANS**

|                                          |   | As                ofMarch                31, 2007 |       | As                ofDecember                31, 2006 |   |
|-----------------------------------------------|--------|---------------------------------------------------|------------|------------------------------------------------------|--------|
| Commercial                and industrial      |   | $                                                 | 63,194,000 |                                                 | $      | 54,835,000 |   |
| Consumer                installment           |   |                                              | 3,284,000  |                                                 |   | 3,992,000 |   |
| Real                estate - mortgage         |   |                                              | 20,432,000 |                                                 |   | 21,073,000 |   |
| Real                estate - construction     |   |                                              | 11,623,000 |                                                 |   | 9,297,000 |   |
| Other                                         |   |                                              | 55,000     |                                                 |   | 126,000 |   |
|                                          |   |                                              | 98,588,000 |                                                 |   | 89,323,000 |   |
|                                          |   |                                              |       |                                                 |   |   |   |
| Less                allowance for loan losses |   |                                              | 1,150,000  |                                                 |   | 1,000,000 |   |
| Less                deferred loan fees        |   |                                              | 279,000    |                                                 |   | 240,000 |   |
|                                          |   | $                                                 | 97,159,000 |                                                 | $      | 88,083,000 |   |

|                                                      |   | As                ofMarch                31, 2007 |      | As                ofDecember                31, 2006 |   |
|-----------------------------------------------------------|--------|---------------------------------------------------|-----------|------------------------------------------------------|--------|
| Balance                at beginning of period             |   | $                                                 | 1,000,000 |                                                 | $      | 400,000 |   |
| Provision                charged to operations            |   |                                              | 150,000   |                                                 |   | 600,000 |   |
| Loans                charged off                          |   |                                              | —   |                                                 |   | — |   |
| Recoveries                of loans previously charged off |   |                                              | —   |                                                 |   | — |   |
| Balance                at end of period                   |   | $                                                 | 1,150,000 |                                                 | $      | 1,000,000 |   |

**NOTE      4.**
**SECURITIES**

|                              |   | Amortized                Cost |    | Gross                Unrealized Gains |   | Gross                Unrealized (Losses) |   | Estimated                Fair Value |    |
|-----------------------------------|--------|-------------------------------|---------|---------------------------------------|--------|------------------------------------------|--------|-------------------------------------|---------|
|                              |   |                          |    |                                  |   |                                     |   |                                |    |
| U.S                Treasury Notes |   | $                             | 988,000 |                                  | $      | —                                  |   | $                                   | — |   | $ | 988,000 |   |

----

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

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

|                                         |   | As                ofMarch                31, 2007 |      | As                ofDecember                31, 2006 |   |
|----------------------------------------------|--------|---------------------------------------------------|-----------|------------------------------------------------------|--------|
| Leasehold                improvements        |   | $                                                 | 918,000   |                                                 | $      | 767,000 |   |
| Furniture                and equipment       |   |                                              | 1,724,000 |                                                 |   | 1,537,000 |   |
|                                         |   |                                              | 2,642,000 |                                                 |   | 2,304,000 |   |
|                                         |   |                                              |      |                                                 |   |   |   |
| Less                accumulated depreciation |   |                                              | 674,000   |                                                 |   | 550,000 |   |
|                                         |   |                                              |           |                                                 |   |   |   |
|                                         |   | $                                                 | 1,968,000 |                                                 | $      | 1,754,000 |   |

**Note      7.**
**DEPOSITS**

|                                                        |   | As                of March 31, 2007 |        | As                of December 31, 2006 |   |
|-------------------------------------------------------------|--------|-------------------------------------|-------------|----------------------------------------|--------|
|                                                        |   |                                | Amount      |                                   |   | Percent  |   |   | Amount |   |   | Percent  |   |
| Noninterest                bearing demand                   |   | $                                   | 12,695,000  |                                   |   | 11% |   | $ | 25,128,000 |   |   | 22% |   |
| Interest                bearing demand (NOW)                |   |                                | 1,601,000   |                                   |   | 1% |   |   | 1,853,000 |   |   | 2% |   |
| Money                market accounts                        |   |                                | 68,584,000  |                                   |   | 57% |   |   | 54,520,000 |   |   | 46% |   |
| Savings                accounts                             |   |                                | 369,000     |                                   |   | >1% |  |   | 304,000 |   |   | >1% |   |
| Certificates                of deposit, less than $100,000  |   |                                | 14,568,000  |                                   |   | 12% |  |   | 14,256,000 |   |   | 12% |   |
| Certificates                of deposit, $100,000 or greater |   |                                | 22,434,000  |                                   |   | 19% |  |   | 21,073,000 |   |   | 18% |   |
|                                                        |   |                                |        |                                   |   |  |   |   |   |   |   |  |   |
|                                                        |   | $                                   | 120,251,000 |                                   |   | 100% |   | $ | 117,134,000 |   |   | 100% |   |

| 2007   |   | $      | 19,998,000 |   |
|--------|--------|--------|------------|--------|
| 2008   |   |   | 1,580,000  |   |
| 2009   |   |   | 1,007,000  |   |
| 2010   |   |   | 1,975,000  |   |
| 2011   |   |   | 11,157,000 |   |
| 2012   |   |   | 1,285,000  |   |
|   |   |   |       |   |
| Total  |   | $      | 37,002,000 |   |

----

**NOTE      8.**
**INCOME      TAXES**

**NOTE      9.**
**STOCK      OPTIONS**

|                                                |   | Number                of Shares Underlying Options |    | Weighted                Average Exercise Prices |   |
|-----------------------------------------------------|--------|----------------------------------------------------|---------|-------------------------------------------------|--------|
|                                                |   |                                               |    |                                            |   |
| Outstanding                at beginning of the year |   |                                               | 176,000 |                                            | $      | 10.05 |   |
| Granted                                             |   |                                               | — |                                            |   | — |   |
| Exercised                                           |   |                                               | — |                                            |   | — |   |
| Expired                forfeited                    |   |                                               | 4,500   |                                            |   | 10.00 |   |
|                                                |   |                                               |         |                                            |   |   |   |
| Outstanding                at end of period         |   |                                               | 171,500 |                                            | $      | 10.06 |   |
| Exercisable                at end of period         |   |                                               | 66,900  |                                            | $      | 10.03 |   |
| Available                for grant at end of period |   |                                               | 78,500  |                                            |   |   |   |
|                                                |   |                                               |    |                                            |   |   |   |

----

|                                        |   | Shares |    | Weighted                Average Grant Date Fair Value |   |
|---------------------------------------------|--------|--------|---------|-------------------------------------------------------|--------|
|                                        |   |   |    |                                                  |   |
| Nonvested                at January 1, 2007 |   |   | 112,600 |                                                  | $      | 2.14 |   |
| Granted                                     |   |   | — |                                                  |   | — |   |
| Vested                                      |   |   | 3,500   |                                                  |   | 2.39 |   |
| Forfeited                                   |   |   | 4,500   |                                                  |   | 2.11 |   |
|                                        |   |   |         |                                                  |   |   |   |
| Nonvested                at March 31, 2006  |   |   | 104,600 |                                                  | $      | 2.15 |   |

**NOTE      10.**
**STOCK      WARRANTS**

**NOTE      11.**
**COMMITMENTS      AND CONTINGENCIES**

----

**Employment      Agreements**

**NOTE      12.**
**REGULATORY      MATTERS**

|                                               |   | Actual        |   | For                Capital Adequacy Purposes |   | To                Be Well Capitalized Under Prompt Corrective Action                Provisions |   |
|---------------------------------------------------------|--------|---------------|--------|----------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|
|                                                    |   | Amount        |   | Ratio                                        |   | Amount                                                                                         |   | Ratio |   | Amount |   | Ratio |   |
|                                                    |   | (000’s) |   |                                         |   | (000’s)                                                                                  |   |   |   | (000’s) |   |   |   |
| **As                of March 31, 2007**                 |   |          |        |                                         |   |                                                                                                |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                Capital (to Risk Weighted Assets)  |   | $             | 13,652 |                                         |   | 12.8                                                                                           | %      | $ | 8,534 |   |   | 38.00 | % | $ | 10,667 |   |   | 310.00 | % |
|                                                    |   |          |   |                                         |   |                                                                                                |   |   |  |   |   |  |   |   |   |   |   |  |   |
| Tier                1 Capital (to Risk Weighted Assets) |   |          | 12,502 |                                         |   | 11.7                                                                                           | %      |   | 4,267 |   |   | 34.00 | % |   | 6,400 |   |   | 36.00 | % |
|                                                    |   |          |        |                                         |   |                                                                                                |   |   |  |   |   |  |   |   |   |   |   |  |   |
| Tier                1 Capital (to Average Assets)       |   |          | 12,502 |                                         |   | 9.8                                                                                            | %      |   | 5,128 |   |   | 34.00 | % |   | 6,411 |   |   | 35.00 | % |

----

|                                               |   | Actual        |   | For                Capital Adequacy Purposes |   | To                Be Well Capitalized Under Prompt Corrective Action                Provisions |   |
|---------------------------------------------------------|--------|---------------|--------|----------------------------------------------|--------|------------------------------------------------------------------------------------------------|--------|
|                                                    |   | Amount        |   | Ratio                                        |   | Amount                                                                                         |   | Ratio |   | Amount |   | Ratio |   |
|                                                    |   | (000’s) |   |                                         |   | (000’s)                                                                                  |   |   |   | (000’s) |   |   |   |
| **As                of December 21, 2006**              |   |          |        |                                         |   |                                                                                                |   |   |   |   |   |  |   |   |  |   |   |  |   |
| Total                Capital (to Risk Weighted Assets)  |   | $             | 13,351 |                                         |   | 13.6                                                                                           | %      | $ | 7,885 |   |   | 38.00 | % | $ | 9,856 |   |   | 310.00 | % |
|                                                    |   |          |   |                                         |   |                                                                                                |   |   |   |   |   |  |   |   |   |   |   |  |   |
| Tier                1 Capital (to Risk Weighted Assets) |   |          | 12,351 |                                         |   | 12.5                                                                                           | %      |   | 3,943 |   |   | 34.00 | % |   | 5,914 |   |   | 36.00 | % |
|                                                    |   |          |        |                                         |   |                                                                                                |   |   |  |   |   |  |   |   |   |   |   |  |   |
| Tier                1 Capital (to Average Assets)       |   |          | 12,351 |                                         |   | 10.8                                                                                           | %      |   | 4,571 |   |   | 34.00 | % |   | 5,714 |   |   | 35.00 | % |

**NOTE      13.**
**PARENT      COMPANY CONDENSED FINANCIAL STATEMENTS**

|                                         |   | March                31, 2007 |       | December                31, 2006 |   |
|----------------------------------------------|--------|-------------------------------|------------|----------------------------------|--------|
| ASSETS                                       |   |                          |       |                             |   |   |   |
| Cash                and due from banks       |   | $                             | 722,000    |                             | $      | 727,000 |   |
| Fixed                assets                  |   |                          | --         |                             |   | -- |   |
| Investment                in subsidiary      |   |                          | 12,503,000 |                             |   | 12,351,000 |   |
| Total                Assets                  |   | $                             | 13,225,000 |                             | $      | 13,078,000 |   |
|                                         |   |                          |       |                             |   |   |   |
| LIABILITIES                AND CAPITAL       |   |                          |       |                             |   |   |   |
| Capital                                      |   |                          | 13,225,000 |                             |   | 13,078,000 |   |
| Total                Liabilities and Capital |   | $                             | 13,225,000 |                             | $      | 13,078,000 |   |

|                                                    |   | 2007  |    | 2006  |   |
|---------------------------------------------------------|--------|------------|---------|------------|--------|
| Equity                in income (loss) from Bank        |   | $          | 152,000 |       | $      | (356,000 | ) |
| Noninterest                expense:                     |   |       |    |       |   |  |   |
| Professional                and administrative expenses |   |       | 21,000  |       |   | 6,000 |   |
| Total                                                   |   |       | 21,000  |       |   | 6,000 |   |
| Net                income (loss)                        |   | $          | 131,000 |       | $      | (362,000 | ) |

----

|                                                            |   | 2007   |     | 2006   |   |
|-----------------------------------------------------------------|--------|--------|----------|--------|--------|
| Cash                Flows from Operating Activities:            |   |
| Net                Loss                                         |   | $      | 131,000  |   | $      | (362,000 | ) |
| Adjustments                to reconcile net income (loss)       |   |   |     |   |   |   |   |
| To                net cash provided by operating activities     |   |   |     |   |   |   |   |
| Equity                in (earnings) loss of Bank                |   |   | (152,000 | )      |   | 356,000 |   |
| Provision                for stock-based compensation      |   |   | 16,000   |   |   |   |   |
| Changes                in operating assets and liabilities:     |   |   |     |   |   |   |   |
| Other                assets                                     |   |   | 0        |   |   | 0 |   |
|                                                            |   |   |     |   |   |   |   |
| Net                cash used in operating activities            |   |   | (5,000   | )      |   | (6,000 | ) |
|                                                            |   |   |     |   |   |   |   |
| Cash                Flows from Investing Activities             |   |   |     |   |   |   |   |
| Sales                of equipment                               |   |   | 0        |   |   | 7,000 |   |
| Net                cash provided by investing activities        |   |   | 0        |   |   | 7,000 |   |
|                                                            |   |   |     |   |   |   |   |
| Cash                Flows from Financing Activities             |   |   | 0        |   |   | 0 |   |
|                                                            |   |   |     |   |   |   |   |
| Net                cash provided from financing activities      |   |   | 0        |   |   | 0 |   |
|                                                            |   |   |     |   |   |   |   |
| Net                change in cash and cash equivalents          |   |   | (5,000   | )      |   | 1,000 |   |
|                                                            |   |   |     |   |   |   |   |
| Cash                and cash equivalents, beginning of year     |   |   | 727,000  |   |   | 674,000 |   |
|                                                            |   |   |     |   |   |   |   |
| Cash                and cash equivalents, end of period         |   | $      | 722,000  |   | $      | 675,000 |   |
|                                                            |   |   |     |   |   |   |   |
| Supplemental                Disclosure of Cash Flow Information |   |   |     |   |   |   |   |
| Interest                paid                                    |   | $      | —  |   | $      | — |   |
| Income                tax paid                                  |   | $      | —  |   | $      | — |   |

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

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

|   | · | 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***

**Recent      Developments**

***Key***
**Performance      Indicators at March 31, 2007**

|   | · | our                total assets grew to $133.9 million at the end of the first quarter                of                2007, representing an increase of $3.5 million or 2.7%, from $130.4                million at the end of 2006; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                total loans grew to $97.2 million at the end of the first quarter                of 2007,                representing an increase of $9.1 million or 10.3%, from $88.1 million                at                the end of 2006; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                total deposits grew to $120.3 million at the end of the first quarter                of                2007, representing an increase of $3.2 million or 2.7%, from $117.1                million at the end of 2006; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | our                total revenue grew to $5,003,000 in the first quarter of 2007 compared                to                $913,000 in the first quarter of 2006, representing an increase of                448%;                and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our                net income was $131,000 in the first quarter of 2007, from a net                loss of                $362,000 in the first quarter of                2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Results      of Operations**

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

----

**QUARTERLY      FINANCIAL SUMMARY - UNAUDITED**

|                                                       |   | For                the three months ended |    | For                the three months ended |   | For                the year ended |
|------------------------------------------------------------|--------|-------------------------------------------|---------|-------------------------------------------|--------|-----------------------------------|
|                                                       |   | March                31, 2007             |    | March                31, 2006             |   | December                31, 2006  |
|                                                       |   | Average                Balance            |    | RevenueExpense                            |   | YieldRate                         |   | AverageBalance |   | RevenueExpense |   | YieldRate |   | AverageBalance |   | RevenueExpense |   | YieldRate |
|                                                       |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |
| **Assets**                                                 |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-earning                assets:                    |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans                net of reserve                        |   | $                                         | 91,220  |                                      |   | 2,010                             |   |   | 8.8% |   | $ | 28,382 |   |   | 629 |   |   | 8.9% |   |   | 50,124 |   | $ | 1,380 |   |   | 8.9% |
| Federal                funds sold                          |   |                                      | 29,497  |                                      |   | 380                               |   |   | 5.2% |   |   | 20,739 |   |   | 226 |   |   | 4.4% |   |   | 18,467 |   |   | 911 |   |   | 4.9% |
| Securities                                                 |   |                                      | 1,449   |                                      |   | 20                                |   |   | 5.5% |  |   | 420 |   |   | 6 |   |   | 5.7% |   |   | 580 |   |   | 32 |   |   | 5.5% |
| Total                earning assets                        |   |                                      | 122,166 |                                      |   | 2,410                             |   |   | 7.9% |   |   | 49,541 |   |   | 861 |   |   | 7.0% |   |   | 69,171 |   |   | 5,444 |   |   | 7.9% |
| Cash                and other assets                       |   |                                      | 6,045   |                                      |   |                              |   |   |   |   |   | 3,744 |   |   |   |   |   |   |   |   | 4,553 |   |   |   |   |   |   |
| Total                assets                                |   | $                                         | 128,211 |                                      |   |                              |   |   |   |   | $ | 53,285 |   |   |   |   |   |   |   | $ | 73,724 |   |   |   |   |   |   |
|                                                       |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Liabilities                and Stockholders' Equity**    |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW                accounts                                |   | $                                         | 2,070   |                                      |   | 5                                 |   |   | 1.0% |  | $ | 1,292 |   |   | 1 |   |   | 1.2% |   | $ | 1,592 |   | $ | 19 |   |   | 1.2% |
| Money                market accounts                       |   |                                      | 60,461  |                                      |   | 677                               |   |   | 4.5% |  |   | 18,729 |   |   | 132 |   |   | 2.8% |   |   | 27,847 |   |   | 1,075 |   |   | 3.7% |
| Savings                accounts                            |   |                                      | 362     |                                      |   | 1                                 |   |   | 1.5% |  |   | 292 |   |   | 1 |   |   | 1.4% |   |   | 348 |   |   | 5 |   |   | 1.4% |
| Certificates                of deposit, less than $100,000 |   |                                      | 14,549  |                                      |   | 192                               |   |   | 5.3% |   |   | 3,477 |   |   | 36 |   |   | 4.1% |   |   | 5,971 |   |   | 293 |   |   | 4.9% |
| Certificates                of deposit $100,000 or more    |   |                                      | 21,468  |                                      |   | 285                               |   |   | 5.3% |   |   | 9,265 |   |   | 94 |   |   | 4.1% |  |   | 13,004 |   |   | 604 |   |   | 4.6% |
| Total                interest bearing deposits             |   |                                      | 98,910  |                                      |   | 1,160                             |   |   | 4.7% |   |   | 33,055 |   |   | 267 |   |   | 3.2% |  |   | 48,762 |   |   | 1,996 |   |   | 4.1% |
| Noninterest                bearing deposits                |   |                                      | 16,795  |                                      |   |                              |   |   |   |   |   | 8,052 |   |   |   |   |   |   |   |   | 13,057 |   |   |   |   |   |   |
| Other                liabilities                           |   |                                      | 155     |                                      |   |                              |   |   |   |   |   | 107 |   |   |   |   |   |   |   |   | 148 |   |   |   |   |   |   |
| Stockholders                equity                         |   |                                      | 12,351  |                                      |   |                              |   |   |   |   |   | 12,071 |   |   |   |   |   |   |   |   | 11,757 |   |   |   |   |   |   |
| Total                liabilities and stockholders' equity  |   | $                                         | 128,211 |                                      |   |                              |   |   |   |   | $ | 53,285 |   |   |   |   |   |   |   | $ | 73,724 |   |   |   |   |   |   |
|                                                       |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                interest income                         |   |                                      |    |                                      |   | 1,250                             |   |   |   |   |   |   |   |   | 594 |   |   |   |   |   |   |   |   | 3,448 |   |   |   |
| Net                interest spread                         |   |                                      |    |                                      |   |                              |   |   | 3.7% |   |   |   |   |   |   |   |   | 3.7% |   |   |   |   |   |   |   |   | 3.8% |
| Net                interest margin                         |   |                                      |    |                                      |   |                              |   |   | 4.8% |   |   |   |   |   |   |   |   | 4.8% |   |   |   |   |   |   |   |   | 5.0% |
|                                                       |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision                for loan loss                     |   |                                      |    |                                      |   | 150                               |   |   |   |   |   |   |   |   | 150 |   |   |   |   |   |   |   |   | 600 |   |   |   |
| Non-interest                income                         |   |                                      |    |                                      |   | 2,593                             |   |   |   |   |   |   |   |   | 52 |   |   |   |   |   |   |   |   | 2,664 |   |   |   |
| Non-interest                expense                        |   |                                      |    |                                      |   | 3,562                             |   |   |   |   |   |   |   |   | 858 |   |   |   |   |   |   |   |   | 5,500 |   |   |   |
| Income                (loss) before income taxes           |   |                                      |    |                                      |   | 131                               |   |   |   |   |   |   |   |   | (362 | ) |   |   |   |   |   |   |   | 12 |   |   |   |
| Income                taxes expense (benefit)              |   |                                      |    |                                      |   | —                           |   |   |   |   |   |   |   |   | — |   |   |   |   |   |   |   |   | — |   |   |   |
|                                                       |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                income (loss)                           |   |                                      |    |                                      | $      | 131                               |   |   |   |   |   |   |   | $ | (362 | ) |   |   |   |   |   |   | $ | 12 |   |   |   |
|                                                       |   |                                      |    |                                      |   |                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Earnings                (Loss) per share                   |   |                                      |    |                                      |   | 0.08                              |   |   |   |   |   |   |   |   | (0.20 | ) |   |   |   |   |   |   |   | 0.01 |   |   |   |
| Return                on average equity                    |   |                                      |    |                                      |   | 4.3%                              |   |   |   |   |   |   |   |   | -11.4% |  |   |   |   |   |   |   |   | 0.1% |   |   |   |

----

***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** **March                31, 2007** |       | **As                of****December                31, 2006** |   |
|-----------------------------------------------|--------|-----------------------------------------------------------------|------------|--------------------------------------------------------------|--------|
| Commercial                and industrial      |   | $                                                               | 63,194,000 |                                                         | $      | 54,835,000 |   |
| Consumer                installment           |   |                                                            | 3,284,000  |                                                         |   | 3,992,000 |   |
| Real                estate - mortgage         |   |                                                            | 20,432,000 |                                                         |   | 21,073,000 |   |
| Real                estate - construction     |   |                                                            | 11,623,000 |                                                         |   | 9,297,000 |   |
| Other                                         |   |                                                            | 55,000     |                                                         |   | 126,000 |   |
|                                          |   |                                                            | 98,588,000 |                                                         |   | 89,323,000 |   |
|                                          |   |                                                            |       |                                                         |   |   |   |
| Less                allowance for loan losses |   |                                                            | 1,150,000  |                                                         |   | 1,000,000 |   |
| Less                deferred loan fees        |   |                                                            | 279,000    |                                                         |   | 240,000 |   |
|                                          |   | $                                                               | 97,159,000 |                                                         | $      | 88,083,000 |   |

----

|                                            |   | **As                of March 31, 2007**               |       |
|-------------------------------------------------|--------|-------------------------------------------------------|------------|
|                                            |   | **One                Year****or                Less** |       | **Over                1 Year****through                5 Years** |   | **Over                5 Years** |   | **Total**  |   |
|                                            |   |                                                  |       | **Fixed****Rate** |   | **Floating                or Adjustable Rate** |   | **Fixed****Rate** |   | **Floating                or Adjustable Rate** |   |   |   |
|                                            |   |                                                  |       |   |   |   |   |   |   |   |   |   |   |
| Real                estate — construction |   | $                                                     | 11,434,000 |   | $ | 189,000 |   | $ | 0 |   | $ | 0 |   | $ | 0 |   | $ | 11,623,000 |   |
| Real                estate — mortgage     |   |                                                  | 12,424,000 |   |   | 6,481,000 |   |   | 192,000 |   |   | 912,000 |   |   | 423,000 |   |   | 20,432,000 |   |
| Commercial                and industrial        |   |                                                  | 20,683,000 |   |   | 18,928,000 |   |   | 5,787,000 |   |   | 17,558,000 |   |   | 293,000 |   |   | 63,249,000 |   |
| Consumer                                        |   |                                                  | 984,000    |   |   | 1,123,000 |   |   | 0 |   |   | 1,177,000 |   |   | 0 |   |   | 3,284,000 |   |
| Total                                           |   | $                                                     | 45,525,000 |   | $ | 26,721,000 |   | $ | 5,979,000 |   | $ | 19,647,000 |   | $ | 716,000 |   | $ | 98,588,000 |   |

**Nonperforming      Loans and Assets**

----

***Allowance      for Loan Losses***

|                                                      |   | **As                of March 31,****2007** |      | **As                of December 31,****2006**   |   |
|-----------------------------------------------------------|--------|--------------------------------------------|-----------|-------------------------------------------------|--------|
|                                                      |   | **Amt.**                                   |      | **Loan                Category to Gross Loans** |   | **Amt.** |   | **Loan                Category to Gross Loans** |   |
| **Allocated:**                                            |   |                                       |      |                                            |   |   |   |   |   |   |   |   |   |
| Real                estate — construction           |   | $                                          | 136,000   |                                            |   | 11.8 | % | $ | 122,000 |   |   | 12.2 | % |
| Real                estate 3⁄4                mortgage |   |                                       | 238,000   |                                            |   | 20.7 |   |   | 270,000 |   |   | 27.0 |   |
| Commercial                and industrial                  |   |                                       | 738,000   |                                            |   | 64.2 |   |   | 556,000 |   |   | 55.6 |   |
| Consumers                                                 |   |                                       | 38,000    |                                            |   | 3.3 |   |   | 52,000 |   |   | 5.2 |   |
| Total                allowance for loan and lease losses  |   | $                                          | 1,150,000 |                                            |   | 100 | % | $ | 1,000,000 |   |   | 100 | % |

***Nonearning      Assets***

----

***Deposits***

|                                                       |   | **For                the three months ended** |    | **For                the three months ended** |   | **For                the year ended** |   |
|------------------------------------------------------------|--------|-----------------------------------------------|---------|-----------------------------------------------|--------|---------------------------------------|--------|
|                                                       |   | **March                31, 2007**             |    | **March                31, 2006**             |   | **December                31, 2006**  |   |
| (000's)                                                    |   | Average                                       |    | Percent                of                     |   |                                  |   | Average |   | Percent                of |   |   |   | Average |   | Percent                of |   |   |   |
|                                                       |   | Balance                                       |    | Deposits                                      |   | Rate                                  |   | Balance |   | Deposits |   | Rate |   | Balance |   | Deposits |   | Rate |   |
| Noninterest                bearing deposits                |   | $                                             | 16,795  |                                          |   | 14.5%                                 |   |   | 0.0% |  | $ | 8,052 |   |   | 19.6% |   |   | 0.0% |   | $ | 13,057 |   |   | 21.1% |   |   | 0.0% |   |
| NOW                accounts                                |   |                                          | 2,070   |                                          |   | 1.8%                                  |        |   | 1.0% |   |   | 1,292 |   |   | 3.1% |   |   | 1.2% |   |   | 1,592 |   |   | 2.6% |   |   | 1.2% |   |
| Money                market accounts                       |   |                                          | 60,461  |                                          |   | 52.2%                                 |        |   | 4.5% |   |   | 18,729 |   |   | 45.6% |  |   | 2.8% |   |   | 27,847 |   |   | 45.0% |  |   | 3.9% |   |
| Savings                accounts                            |   |                                          | 362     |                                          |   | .3%                                   |   |   | 1.5% |   |   | 292 |   |   | 0.7% |  |   | 1.4% |   |   | 348 |   |   | .6% |   |   | 1.4% |   |
| Certificates                of deposit, less than $100,000 |   |                                          | 14,549  |                                          |   | 12.6%                                 |   |   | 5.3% |   |   | 3,477 |   |   | 8.5% |   |   | 4.1% |   |   | 5,971 |   |   | 9.7% |   |   | 4.9% |   |
| Certificates                of deposit $100,000 or more    |   |                                          | 21,468  |                                          |   | 18.6%                                 |   |   | 5.3% |   |   | 9,265 |   |   | 22.5% |  |   | 4.1% |   |   | 13,004 |   |   | 21.0% |   |   | 4.6% |   |
| Total                interest bearing deposits             |   | $                                             | 115,705 |                                          |   | 100.0%                                |   |   | 4.7% |  | $ | 41,107 |   |   | 100.0% |   |   | 2.6% |   | $ | 61,819 |   |   | 100.0% |   |   | 4.1% |   |

|                                               |   | **March                31,****2007** |       | **December                31,****2006** |   |
|----------------------------------------------------|--------|--------------------------------------|------------|-----------------------------------------|--------|
|                                               |   |                                 |       |                                    |   |
| Three                months or less                |   | $                                    | 1,279,000  |                                    | $      | 1,221,000 |   |
| Over                three months through 12 months |   |                                 | 11,904,000 |                                    |   | 11,977,000 |   |
| Over                one year through three years   |   |                                 | 800,000    |                                    |   | 524,000 |   |
| Over                three years                    |   |                                 | 8,451,000  |                                    |   | 7,351,000 |   |
| Total                                              |   | $                                    | 22,434,000 |                                    | $      | 21,073,000 |   |

***Return      on Equity and Assets***

|                                  |   | At                March 31, 2007 |   | At                December 31, 2006 |   |
|---------------------------------------|--------|----------------------------------|--------|-------------------------------------|--------|
|                                  |   |                             |   |                                |   |
| Return                on assets       |   |                             | 0.5    | %                                   |   | 0.0 | % |
| Return                on equity       |   |                             | 4.9    | %                                   |   | 0.1 | % |
| Dividend                payout ratio  |   |                             | 0.0    | %                                   |   | 0.0 | % |
| Equity                to assets ratio |   |                             | 9.6    | %                                   |   | 15.9 | % |

***Off-Balance      Sheet Arrangements***

----

**Borrowings**

|                              |   | **As                of March 31, 2007** |       |
|----------------------------------------|--------|-----------------------------------------|------------|
|                                   |   | **Less                than One Year**   |       | **One                Year to Three Years** |   | **Over                Three Years to Five Years** |   | **Over                Five Years** |   |
| Certificates                of deposit |   | $                                       | 21,133,000 |   | $ | 1,728,000 |   | $ | 14,145,000 |   | $ | 0 |   |
| Operating                leases        |   |                                    | 273,000    |   |   | 565,000 |   |   | 564,000 |   |   | 689,000 |   |
| Total                                  |   | $                                       | 21,406,000 |   | $ | 2,293,000 |   | $ | 14,709,000 |   | $ | 689,000 |   |

**Capital      Resources and Capital Adequacy Requirements**

|                                                      |   | **Actual**        |   | **For                  Capital Adequacy Purposes** |   | **To                  Be Well Capitalized Under Prompt Corrective Action                  Problems** |   |
|-----------------------------------------------------------|--------|-------------------|--------|----------------------------------------------------|--------|------------------------------------------------------------------------------------------------------|--------|
|                                                      |   | **Amount**        |   | **Ratio**                                          |   | **Amount**                                                                                           |   | **Ratio** |   | **Amount** |   | **Ratio** |   |
|                                                      |   | **(000’s)** |   |                                               |   | **(000’s)**                                                                                    |   |   |   | **(000’s)** |   |   |   |
| **As                  of March 31, 2007**                 |   |              |   |                                               |   |                                                                                                 |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                  Capital (to risk-weighted assets)  |   | $                 | 13,652 |                                               |   | 12.8%                                                                                                |   | $ | 8,534 |   |   | ≥8% |   | $ | 10,667 |   |   | ≥10% |   |
| Tier                  1 capital (to risk-weighted assets) |   |              | 12,502 |                                               |   | 11.7%                                                                                                |   |   | 4,267 |   |   | ≥4% |   |   | 6,400 |   |   | ≥6% |   |
| Tier                  1 capital (to average assets)       |   |              | 12,502 |                                               |   | 9.8%                                                                                                 |   |   | 5,128 |   |   | ≥4% |   |   | 6,411 |   |   | ≥5% |   |
| **As                  of December 31, 2006**              |   |              |        |                                               |   |                                                                                                 |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                  Capital (to risk-weighted assets)  |   | $                 | 13,351 |                                               |   | 13.6%                                                                                                |   |   | 7,885 |   |   | ≥8% |   |   | 9,856 |   |   | ≥10% |   |
| Tier                  1 capital (to risk-weighted assets) |   |              | 12,351 |                                               |   | 12.5%                                                                                                |   |   | 3,943 |   |   | ≥4% |  |   | 5,914 |   |   | ≥6% |   |
| Tier                  1 capital (to average assets)       |   |              | 12,351 |                                               |   | 10.8%                                                                                                |   |   | 4,571 |   |   | >4% |  |   | 5,714 |   |   | >5% |   |

----

***Liquidity      Management***

*i.e*

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

----

|                                                   |   | Change                  in Future Net Interest Income As                  of March 31, 2007 |     |
|--------------------------------------------------------|--------|---------------------------------------------------------------------------------------------|----------|
|                                                   |   | Dollar                  Change                                                              |     | Percentage                  Change |   |
| +200                  basis points over one year       |   |                                                                                        | 51,000   |   |   | 1.01 | % |
| +100                  basis points over one year       |   |                                                                                        | 32,000   |   |   | 0.63 | % |
| —100                  basis points over one year |   |                                                                                        | (276,000 | ) |   | (5.46 | )% |
| —200                  basis points over one year |   |                                                                                        | (567,000 | ) |   | (11.22 | )% |

----

|                                                                                                             |   | **As                of March 31, 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:                (000’s)**                                                                         |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                             |   |                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Short-term                investments and federal funds sold                                                     |   | $                                                                                             | 29,375 |   | $ | 0 |   | $ | 54 |   | $ | 0 |   | $ | 0 |   | $ | 3,036 |   | $ | 32,519 |   |
| Investment                securities                                                                             |   |                                                                                          | 0      |   |   | 988 |   |   | 0 |   |   | 0 |   |   | 468 |   |   | 0 |   |   | 1,456 |   |
| Loans                                                                                                            |   |                                                                                          | 36,175 |   |   | 9,647 |   |   | 19,083 |   |   | 11,648 |   |   | 21,992 |   |   | (1,386 | ) |   | 97,159 |   |
| Fixed                and other assets                                                                            |   |                                                                                          | 0      |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 2,833 |   |   | 2,833 |   |
| Total                Earning Assets                                                                              |   | $                                                                                             | 65,550 |   | $ | 10,635 |   | $ | 19,137 |   | $ | 11,648 |   | $ | 22,460 |   | $ | 4,483 |   | $ | 133,913 |   |
|                                                                                                             |   |                                                                                          |        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Liabilities                and Shareholders’ Equity:**                                                   |   |                                                                                          |        |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Non-interest-bearing,                interest-bearing checking, savings and money market                accounts |   |                                                                                          | 41,050 |   |   | 0 |   |   | 0 |   |   | 29,504 |   |   | 0 |   |   | 12,695 |   |   | 83,249 |   |
| Certificates                of deposit                                                                           |   |                                                                                          | 0      |   |   | 1,775 |   |   | 19,358 |   |   | 1,728 |   |   | 14,141 |   |   | 0 |   |   | 37,002 |   |
| Borrowed                funds                                                                                    |   |                                                                                          | 0      |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |
| Other                liabilities                                                                                 |   |                                                                                          | 0      |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 437 |   |   | 437 |   |
| Shareholders’                equity                                                                        |   |                                                                                          | 0      |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 0 |   |   | 13,225 |   |   | 13,225 |   |
| Total                liabilities and shareholders’ equity                                                  |   |                                                                                          | 41,050 |   |   | 1,775 |   |   | 19,358 |   |   | 31,232 |   |   | 14,141 |   |   | 26,357 |   |   | 133,913 |   |
| Period                gap                                                                                        |   |                                                                                          | 24,500 |   |   | 8,860 |   |   | (221 | ) |   | (19,584 | ) |   | 8,319 |   |   |   |   |   |   |   |
| Cumulative                gap                                                                                    |   |                                                                                          | 24,500 |   |   | 33,360 |   |   | 33,139 |   |   | 13,555 |   |   | 21,874 |   |   |   |   |   |   |   |
| Period                gap to total assets                                                                        |   |                                                                                          | 18%    |   |   | 7% |   |   | .1% |   |   | (15)% |   |   | 6% |   |   |   |   |   |   |   |
| Cumulative                gap to total assets                                                                    |   |                                                                                          | 18%    |   |   | 25% |   |   | 25% |   |   | 10% |   |   | 16% |   |   |   |   |   |   |   |

***Aggregate      Contractual Obligations***

|                                  |   | **As                of****March                31, 2007** |    |
|---------------------------------------|--------|-----------------------------------------------------------|---------|
|                                  |   | **Less                than One Year**                     |    | **One                Year to Three Years** |   | **Over                Three Years to Five Years** |   | **Over                Five Years** |   |
|                                  |   |                                                      |    |   |   |   |   |   |   |
| Operating                Leases  |   | $                                                         | 273,000 |   | $ | 565,000 |   | $ | 564,000 |   | $ | 689,000 |   |
|                                  |   |                                                      |         |   |   |  |   |   |  |   |   |  |   |
| Total                                 |   | $                                                         | 273,000 |   | $ | 565,000 |   | $ | 564,000 |   | $ | 689,000 |   |

----

**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      and Reports on Form 8-K**

|  **Exhibit                Number** |   | **Description                of Exhibit**                                                                                                                            |
|-----------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1                               |   | Rule                13a-14(a) Certification of Chief Executive Officer.                                                                                              |
| 31.2                               |   | Rule                13a-14(a) Certification of Chief Financial Officer.                                                                                              |
| 32                                 |   | Certification                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section                906 of                the Sarbanes-Oxley Act of 2002. |

----

**SIGNATURES**

|                         |                                                                                      |                                |
|-----------------------------------|-------------------------------------------------------------------------------------------|-------------------------------------|
|                              | FIRST                METROPLEX CAPITAL, INC.                                              |
|                         |                                                                                 |                           |
| Date:                May 15, 2007 | By:                                                                                  | /s/                Patrick G. Adams |
|                              |  Patrick                G. AdamsPresident                and Chief Executive Officer |
|                              |                                                                                      |

----