**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 June 30, 2007**




Commission
      File Number 000-51297




**T
      BANCSHARES , INC.**


(Exact
      name of registrant as specified in its charter)




**Texas**
            
            **71-0919962**(State
                or other jurisdiction of
            
            (I.R.S.
                Employerincorporation
                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)




Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or such shorter period
      that
      the registrant was required to filed such reports), and (2) has been subject
      to
      such filing requirements for the past 90 days.  Yes
x
      No o




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act).  Yes
o
      No x




The
      number of shares outstanding of the issuer’s Common Stock as of August 14, 2007,
      was 1,693,381 shares.










**T
      BANCSHARES , INC.**




INDEX


PAGEPART
                  I.
              
              FINANCIAL
                  INFORMATION
              
              3ITEM
                  1.
              
              Financial
                  Statements
              
              3ITEM
                  2.
              
              Management’s
                  Discussion and Analysis or Plan of Operation
              
              15ITEM
                  3.
              
              Controls
                  and Procedures
              
              29PART
                  II.
              
              OTHER
                  INFORMATION
              
              30ITEM
                  1.
              
              Legal
                  Proceedings
              
              30ITEM
                  2.
              
              Unregistered
                  Sales of Equity Securities and Use of Proceeds
              
              30ITEM
                  3.
              
              Defaults
                  Upon Senior Securities
              
              30ITEM
                  4.
              
              Submission
                  of Matters to a Vote of Security Holders
              
              30ITEM
                  5.
              
              Other
                  Information
              
              30ITEM
                  6.
              
              Exhibits
                  and Reports on Form 8-K
              
              31




2


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




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


**T
                  BANCSHARES, INC.****CONSOLIDATED
                  STATEMENTS OF FINANCIAL
                  CONDITION**
  **June
                  30,**
              
              **December
                  31,****2007**
              
              **2006****(000's)**
              
              **(unadited)****ASSETS**Cash
                  and due from banks
              
              $
              3,822
              
              $
              1,716Federal
                  funds sold
              
              
              23,575
              
              
              36,050Total
                  cash and cash equivalents
              
              
              27,397
              
              
              37,766Investments
                  restricted, at cost
              
              
              498
              
              
              468Held
                  to maturity, restricted
              
              
              1,000
              
              
              988Loans,
                  net of allowance for loan lossesof
                  $1,300 and $1,000, respectively
              
              
              109,047
              
              
              88,083Bank
                  premises and equipment, net
              
              
              1,901
              
              
              1,754Other
                  Assets
              
              
              740
              
              
              1,332Total
                  Assets
              
              $
              140,583
              
              $
              130,391**LIABILITIES**Demand
                  Deposits:Noninterest-bearing
              
              $
              12,470
              
              $
              25,127Interest-bearing
              
              
              73,837
              
              
              56,373Time
                  deposits $100,000 and over
              
              
              25,482
              
              
              21,073Other
                  time deposits
              
              
              14,566
              
              
              14,561Total
                  Deposits
              
              
              126,355
              
              
              117,134Other
                  liabilities
              
              
              503
              
              
              179Total
                  liabilities
              
              
              126,858
              
              
              117,313**Shareholders'
                  Equity**Common
                  Stock, $ .01 par value; 10,000,000shares
                  authorized; 1,693,381 and 1,690,150shares
                  issued and outstanding, respectively
              
              
              17
              
              
              17Additional
                  paid-in capital
              
              
              16,644
              
              
              16,572Retained
                  deficit
              
              
              (2,936
              )
              
              (3,511
              )Total
                  shareholders' equity
              
              
              13,725
              
              
              13,078Total
                  Liabilities and Shareholders' Equity
              
              $
              140,583
              
              $
              130,391
 See
          accompanying notes to financial statements
  3


**T
          BANCSHARES, INC.**
 **CONSOLIDATED
          STATEMENTS OF INCOME**
 **(Unaudited)**
 
 **Three
                    Months Ended June 30,**
                
                **Six
                    Months Ended June 30,****2007**
                
                **2006**
                
                **2007**
                
                **2006****(000's)****Interest
                    Income**Loan,
                    including fees
                
                $
                2,258
                
                $
                840
                
                $
                4,269
                
                $
                1,468Securities,
                    restricted
                
                
                20
                
                
                6
                
                
                39
                
                
                13Federal
                    funds sold
                
                
                340
                
                
                219
                
                
                720
                
                
                445Total
                    interest income
                
                
                2,618
                
                
                1,065
                
                
                5,028
                
                
                1,926**Interest
                    Expense**Deposits
                
                
                1,286
                
                
                299
                
                
                2,447
                
                
                566Net
                    interest income
                
                
                1,332
                
                
                766
                
                
                2,581
                
                
                1,360Provision
                    for loan losses
                
                
                150
                
                
                175
                
                
                300
                
                
                325Net
                    interest income after provisionfor
                    loan losses
                
                
                1,182
                
                
                591
                
                
                2,281
                
                
                1,035**Noninterest
                    Income**Trust
                    income
                
                
                2,337
                
                
                -
                
                
                4,415
                
                
                -Service
                    fees
                
                
                660
                
                
                135
                
                
                1,173
                
                
                187Total
                    noninterest income
                
                
                2,997
                
                
                135
                
                
                5,589
                
                
                187**Noninterest
                    Expense**Salaries
                    and employee benefits
                
                
                697
                
                
                542
                
                
                1,344
                
                
                1,098Occupancy
                    and equipment
                
                
                248
                
                
                145
                
                
                504
                
                
                276Professional
                    fees
                
                
                2,308
                
                
                61
                
                
                4,566
                
                
                79Other
                
                
                483
                
                
                240
                
                
                881
                
                
                394Total
                    noninterest expense
                
                
                3,735
                
                
                988
                
                
                7,295
                
                
                1,847**Net
                    Income (Loss)**
                
                $
                444
                
                $
                (262
                )
                $
                575
                
                $
                (625
                )**Earning
                    (loss) per common share:**Basic
                
                
                0.26
                
                
                (0.16
                )
                
                0.34
                
                
                (0.37
                )Diluted
                
                
                0.25
                
                
                
                
                
                0.33Weighted
                    average common shares outstanding
                
                
                1,691,470
                
                
                1,680,150
                
                
                1,690,813
                
                
                1,680,150Weighted
                    average diluted shares outstanding
                
                
                1,764,197
                
                
                -
                
                
                1,726,385
                
                
                -
 
 See
          accompanying notes to financial statements
  4
  **T
        BANCSHARES, INC.**
 **CONSOLIDATED
        STATEMENTS OF INCOME**
 **(Unadited)**
  **Common
                  Stock**
              
              **Additional
                  Paid-in Capital**
              
              **Retained
                  Deficit**
              
              **Accumulated
                  Other Comprehensive Income**
              
              **Total****(000's)****BALANCE,
                  December 31, 2005**
              
              $
              17
              
              $
              16,382
              
              $
              (3,523
              )
              $
              -
              
              $
              12,876Comprehensive
                  income:Net
                  income — YTD
              
              
              
              
              
              
              
              
              (625
              )
              
              
              
              
              (625
              )Total
                  comprehensive income (loss)
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              (625
              )Stock
                  based compensation
              
              
              
              
              
              38
              
              
              
              
              
              
              
              
              38**BALANCE,
                  June 30, 2006**
              
              $
              17
              
              $
              16,420
              
              $
              (4,148
              )
              $
              -
              
              $
              12,289**BALANCE,
                  December 31, 2006**
              
              $
              17
              
              $
              16,572
              
              $
              (3,511
              )
              $
              -
              
              $
              13,078Comprehensive
                  income:Net
                  income — YTD
              
              
              
              
              
              
              
              
              575
              
              
              
              
              
              575Total
                  comprehensive income
              
              
              
              
              
              
              
              
              
              
              
              
              
              
              575Exercise
                  of warrants
              
              
              
              
              
              28
              
              
              
              
              
              
              
              
              28Exercise
                  of stock options
              
              
              
              
              
              10
              
              
              
              
              
              
              
              
              10Stock
                  based compensation
              
              
              
              
              
              34
              
              
              
              
              
              
              
              
              34**BALANCE,
                  June 30, 2007**
              
              $
              17
              
              $
              16,644
              
              $
              (2,936
              )
              $
              -
              
              $
              13,725
 
 See
        accompanying notes to financial statements
  5
 
 **T
        BANCSHARES, INC.**
 **CONSOLIDATED
        STATEMENT OF CASH FLOWS**
 **(Unaudited)**
 
 **Six
                  Months Ended June 30,****2007**
              
              **2006****(000's)****Cash
                  Flows from Operating Activities**Net
                  Income
              
              $
              575
              
              $
              (625
              )Adjustments
                  to reconcile net income (loss) tonet
                  cash provided (used) by operating activities:Provision
                  for loan losses
              
              
              300
              
              
              325Depreciation
                  and amortization
              
              
              260
              
              
              120Accretion
                  of discount
              
              
              (12
              )
              
              -Stock
                  based compensation
              
              
              34
              
              
              38Net
                  change in other assets
              
              
              592
              
              
              (365
              )Net
                  change in other liabilities
              
              
              324
              
              
              18Net
                  cash provided (used) by operating activities
              
              
              2,073
              
              
              (489
              )**Cash
                  Flows from Investing Activities**Purchase
                  of securities held to maturity
              
              
              (1,000
              )
              
              -Proceeds
                  from maturity of securities
              
              
              1,000
              
              
              -Purchase
                  of Federal Home Loan Bank stock
              
              
              (30
              )
              
              -Net
                  change in loans
              
              
              (21,264
              )
              
              (20,911
              )Purchases
                  of premises and equipment
              
              
              (407
              )
              
              (358
              )Net
                  cash used in investing activities
              
              
              (21,701
              )
              
              (21,269
              )**Cash
                  Flows from Financing Activities**Net
                  change in demand deposits
              
              
              (12,657
              )
              
              9,723Net
                  change in time deposits
              
              
              21,878
              
              
              2,907Exercise
                  of stock options
              
              
              10
              
              
              -Exercise
                  of warrants
              
              
              28
              
              
              -Net
                  cash provided by financing activities
              
              
              9,259
              
              
              12,630Net
                  change in cash and cash equivalents
              
              
              (10,369
              )
              
              (9,128
              )Cash
                  and cash equivalents at beginning of period
              
              
              37,766
              
              
              20,418Cash
                  and cash equivalents at end of period
              
              $
              27,397
              
              $
              11,290Supplemental
                  disclosures of cash flow informationCash
                  paid during the period forInterest
              
              $
              2,423
              
              $
              557Income
                  taxes
              
              $
              -
              
              $
              -
 
 See
        accompanying notes to financial statements
  6


**T
      BANCSHARES , INC.**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**




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




**Organization
      and Nature of Operations**




We
      prepared the consolidated financial statements following the requirements of
      the
      Securities and Exchange Commission (SEC) for interim reporting. As permitted
      under those rules, certain footnotes or other financial information that are
      normally required by accounting principles generally accepted in the United
      States of America (GAAP) can be condensed or omitted.




We
      are
      responsible for the unaudited financial statements included in this document.
      The financial statements include all normal and recurring adjustments that
      are
      considered necessary for the fair presentation of our financial position and
      operating results. The accounting and reporting policies of the Company reflect
      banking industry practice and conform to generally accepted accounting
      principles in the United States of America. In preparing the consolidated
      financial statements, management is required to make estimates and assumptions
      that affect the reported asset and liability balances and revenue and expense
      amounts and the disclosure of contingent assets and liabilities. The allowance
      for loan loss is the primary estimate by management, which is established
      through a provision for loan loss charge to expense. It is reasonably possible
      that actual results could differ significantly from those estimates.




The
      information included in this Quarterly Report on Form 10-QSB should be read
      in
      conjunction with the consolidated financial statements and accompanying notes
      included in the Company’s Annual Report on Form 10-KSB for the year ended
      December 31, 2006.




NOTE
      2.ADOPTION
      OF NEW ACCOUNTING POLICIES




On
      January 1, 2006, we adopted the provisions of Statement of Financial Accounting
      Standards (SFAS) No. 123R *,
      Share-Based Payment,* as
      supplemented by the interpretation provided by SEC Staff Accounting Bulletin
      (SAB) No. 107, issued in March 2005. (SFAS 123R replaced SFAS 123, *Stock-Based
      Compensation* ,
      issued
      in 1995.) We elected the modified prospective application transition method
      of
      adoption and, as such, prior period financial statements have not been restated.
      Under this method, the fair value of all stock options granted or modified
      after
      adoption must be recognized in the consolidated statement of income and total
      compensation cost related to nonvested awards not yet recognized, determined
      under the original provisions of SFAS 123, must also be recognized in the
      consolidated statement of income.




Prior
      to
      January 1, 2006, we accounted for stock options under Accounting Principle
      Board
      Opinion (APB) No. 25, *Accounting
      for Stock Issued to Employees* ,
      an
      elective accounting policy permitted by SFAS 123. Under this standard, since
      the
      exercise price of our stock options granted is set equal to the market price
      on
      the date of the grant, we did not record any expense to the condensed
      consolidated statement of income related to stock options, unless certain
      original grant date terms were subsequently modified. However, as required,
      we
      disclosed, in the Notes to Consolidated Financial Statements, the pro forma
      expense impact of the stock option grants as if we had applied the
      fair-value-based recognition provisions of SFAS 123.




The
      adoption of SFAS 123R primarily impacted our accounting for stock options (See
      Note 9, *Stock
      Options* ).




7




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




Loans
      held in portfolio consisted of the following:


**June
                  30,2007**
              
              **December
                  31,2006****(000's)**Commercial
                  and industrial
              
              $
              73,587
              
              $
              54,835Consumer
                  installment
              
              
              3,189
              
              
              3,992Real
                  estate — mortgage
              
              
              21,119
              
              
              21,073Real
                  estate — construction
              
              
              12,619
              
              
              9,297Other
              
              
              88
              
              
              126110,602
              
              
              89,323Less
                  allowance for loan losses
              
              
              1,300
              
              
              1,000Less
                  deferred loan fees
              
              
              255
              
              
              240Net
                  loans
              
              $
              109,047
              
              $
              88,083
 
 The
                  change in the allowance for loan losses is as
                  follows:
 
 **June
                  30,2007**
              
              **December
                  31,2006****(000's)**Balance
                  at beginning of period
              
              $
              1,000
              
              $
              400Provision
                  charged to operations
              
              
              300
              
              
              600Loans
                  charged off
              
              
              -
              
              
              -Recoveries
                  of loans previously charged off
              
              
              -
              
              
              -Balance
                  at end of period
              
              $
              1,300
              
              $
              1,000




At
      June
      30, 2007, there were no nonaccrual loans and $50,000 in loans contractually
      delinquent over ninety days.




8




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




At
      June
      30, 2007 and December 31, 2006, securities to be held to maturity consisted
      of
      the following:




**June
                  30, 2007****Amortized
                  Cost**
              
              **Unrealized
                  Gains**
              
              **Unrealized
                  Losses**
              
              **Estimated
                  Fair Value****(000's)**U.S.
                  Treasury Notes
              
              $
              1,000
              
              $
              -
              
              $
              -
              
              $
              1,000
 
 
 **December
                  31, 2006****Amortized
                  Cost**
              
              **Unrealized
                  Gains**
              
              **Unrealized
                  Losses**
              
              **Estimated
                  Fair Value****(000's)**U.S.
                  Treasury Notes
              
              $
              988
              
              $
              -
              
              $
              -
              
              $
              988


The
      Bank
      held Federal Reserve Bank stock of $420,000, at June 30, 2007 and December
      31,
      2006, and Federal Home Loan Bank stock of $78,000 and $48,000,
      respectively, at cost.




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




Certain
      Directors and Officers of the Bank have depository accounts with the Bank.
      None
      of those deposit accounts has terms more favorable than those available to
      any
      other depositor.




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




The
      original cost and related accumulated depreciation at June 30, 2007 and December
      31, 2006 were as follows:


**June
                  30, 2007**
              
              **December
                    31,****2006****(000's)**Leasehold
                  improvements
              
              $
              929
              
              $
              767Furniture
                  and equipment
              
              
              1,782
              
              
              1,5372,711
              
              
              2,304Less:
                  accumulated depreciation
              
              
              810
              
              
              550Balance
                  at end of period
              
              $
              1,901
              
              $
              1,754
  9




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




Deposits
      are summarized as follows:


Deposits
                  are summarized as follows:**As
                  of June 30, 2007**
              
              **As
                  of December 31, 2006****(000's)**Noninterest
                  bearing demand
              
              $
              12,470
              
              
              9.9
              %
              $
              25,127
              
              
              21.5
              %Interest
                  bearing demand (NOW)
              
              
              1,652
              
              
              1.3
              %
              
              1,853
              
              
              1.6
              %Money
                  market accounts
              
              
              71,864
              
              
              56.9
              %
              
              54,520
              
              
              46.5
              %Savings
                  accounts
              
              
              321
              
              
              0.2
              %
              
              305
              
              
              0.2
              %Certificates
                  of deposit, less than $100,000
              
              
              14,566
              
              
              11.5
              %
              
              14,256
              
              
              12.2
              %Certificates
                  of deposit, greater than $100,000
              
              
              25,482
              
              
              20.2
              %
              
              21,073
              
              
              18.0
              %$
              126,355
              
              
              100.0
              %
              $
              117,134
              
              
              100.0
              %
 At
                    June 30, 2007, the scheduled maturities of certificates of deposit
                    were as
                    follows:
  2007
                
                $
                18,4182008
                
                
                3,8332009
                
                
                1,3052010
                
                
                2,0302011
                
                
                11,7762012
                
                
                2,686Total
                
                $
                40,048
 **NOTE
        8.**  **INCOME
        TAXES**




No
      federal tax expense has been recorded for quarter-ending June 30, 2007 because
      we are using net operating losses to offset taxable income. Based upon the
      Company’s limited operating history, the federal tax benefit of these losses has
      been fully reserved against. As of December 31, 2006, the Company had net tax
      operating loss carry forwards of approximately $1.8 million that will ultimately
      expire in 2025 if not used. This is lower than the losses per the financial
      statements as all organizational costs are capitalized for income tax purposes
      and provisions for loan losses are not recognized for tax purposes.




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




The
      shareholders of the Company approved the 2005 Stock Incentive Plan at the annual
      shareholder meeting held on June 2, 2005. The plan authorizes the granting
      of up
      to 260,000 shares to employees of the Company. The plan is designed to provide
      the Company with the flexibility to grant incentive stock options and
      non-qualified stock options to its executive and other officers. The purpose
      of
      the plan is to provide increased incentive for key employees to render services
      and to exert maximum effort for the success of the Company. The plan has a
      term
      of 10 years. The plan is administered by the Board of Directors. As of June
      30,
      2007 and December 31, 2006, a total of 176,000 options had been issued with
      an
      average exercise price of $10.05 per share. These options vest through March
      2011.




Effective
      January 1, 2006, the Company adopted SFAS 123R using the
      modified-prospective-transition method. Under this method, prior periods are
      not
      restated. Under this transition method, stock compensation cost recognized
      beginning January 1, 2006 includes: (a) compensation cost for all share-based
      payments granted prior to, but not yet vested as of January 1, 2006, based
      on
      the grant-date fair value estimated in accordance with the original provisions
      of SFAS 123, and (b) compensation cost for all share-based payments granted
      on
      or subsequent to January 1, 2006, based on the grant-date fair value estimated
      in accordance with the provisions of SFAS 123R.




10


Prior
      to
      the effective date of SFAS 123R, the Company applied APB 25, and related
      interpretations for our stock option grants. APB 25 provides that the
      compensation expense relative to our stock options is measured based on the
      intrinsic value of the stock option at date of grant.




As
      a
      result of adopting SFAS 123R on January 1, 2006, our income before income taxes
      and net income for the six months ended June 30, 2007 is $34,000 lower than
      if
      we had continued to account for stock-based compensation under APB 25.




The
      following is a summary of activity in the Company’s stock option plan at June
      30, 2007:


**Number
                  of Shares Underlying Options**
              
              **Weighted
                  Average Exercise Prices**Outstanding
                  at beginning of the year
              
              
              176,000
              
              $
              10.05Granted
              
              
              -
              
              
              -Exercised
              
              
              1,000
              
              
              10.00Expired
                  forfeited
              
              
              6,500
              
              
              10.00Outstanding
                  at end of period
              
              
              168,500
              
              $
              10.06Exercisable
                  at end of period
              
              
              63,900
              
              $
              10.03Available
                  for grant at end of period
              
              
              80,500




The
      weighted average remaining contractual life of options outstanding at June
      30,
      2007 was 8.4 years. Outstanding options were granted with an average exercise
      price of $10.05.




The
      weighted average value per option granted during 2006 at June 30, 2007 is $2.19.
      The fair value of options granted was estimated on the date of grant using
      the
      Black-Scholes option pricing model with the following weighted average
      assumptions dividend yield of 0%, expected volatility of 10%, risk-free interest
      rate of 2% and an expected life of 10 years.




The
      following is a summary of the Company’s nonvested options at June 30,
      2007:


**Shares**
              
              **Weighted
                  Average Grant Date Fair Value**Nonvested
                  at January 1, 2007
              
              
              112,600
              
              $
              2.15Granted
              
              
              -
              
              
              -Vested
              
              
              3,500
              
              
              2.39Forfeited
              
              
              4,500
              
              
              2.11Nonvested
                  at June 30, 2007
              
              
              104,600
              
              $
              2.15


As
      of
      June 30, 2007, there was approximately $242,000 of total unrecognized
      compensation cost related to nonvested share-based compensation arrangements
      to
      be recognized over the vesting period.




11


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




The
      Company had two stock warrant plans at June 30, 2007 and December 31,
      2006.




Initial
      shareholders in the Company received warrants to purchase one share of common
      stock for every five shares of common stock purchased in the offering. A total
      of 336,000 warrants were issued and 333,619 and 335,850 were outstanding at
      June
      30, 2007 and December 31, 2006, respectively. These warrants are exercisable
      at
      a price of $12.50 per share at any time until November 2, 2007. During the
      six
      months ended June 30, 2007, the Company had 2,231 warrants
      exercised.




The
      Company’s organizers advanced funds for organizational and other preopening
      expenses. As consideration for the advances the organizers received warrants
      to
      purchase one share of common stock for every $20 advanced up to a limit of
      $100,000. A total of 96,750 warrants were issued and remain outstanding at
      June
      30, 2007. These warrants are exercisable at a price of $10.00 per share at
      any
      time until November 2, 2014. During the six months ended June 30, 2007, no
      warrants were exercised.




There
      were no additional warrants issued during the six months ended June 30,
      2007.




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




The
      Company is a party to financial instruments with off-balance sheet risk in
      the
      normal course of business to meet the financing needs of its customers. These
      financial instruments include commitments to extend credit and standby letters
      of credit. These instruments involve, to varying degrees, elements of credit
      risk in excess of the amount recognized in the accompanying balance sheets.
      The
      Company's exposure to credit loss in the event of nonperformance by the other
      party to the financial instruments for commitments to extend credit and standby
      letters of credit is represented by the contractual amount of those instruments.
      The Company uses the same credit policies in making commitments and conditional
      obligations as it does for on-balance sheet instruments. At June 30, 2007,
      the
      Company had commitments to extend credit and standby letters of credit of
      approximately $18.0 million and $90,000, respectively. At December 31, 2006,
      the
      Company had commitments to extend credit and standby letters of credit of
      approximately $20.4 million and $450,000, respectively.




Commitments
      to extend credit are agreements to lend to a customer as long as there is no
      violation of any condition established in the contract. Commitments generally
      have fixed expiration dates or other termination clauses and may require payment
      of a fee. Since many of the commitments may expire without being drawn upon,
      the
      total commitment amounts do not necessarily represent future cash
      requirements.




**Employment
      Agreements**




The
      Company and the Bank have entered into employment agreements with two officers
      of the Bank. The agreements are for an initial three-year term and are
      automatically renewable for an additional three years unless either party elects
      not to renew.




The
      agreements provide for compensation and benefits including the issuance of
      options to acquire up to 115,000 shares of the Company’s common stock at $10 per
      share, exercisable within ten years from the date of grant. At June 30, 2007,
      these options were issued and outstanding under the stock option plan disclosed
      in Note 9.




The
      agreements further provide for termination payments in the event of a change
      in
      control, as defined in the employment agreements.




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




The
      Company is subject to various regulatory capital requirements administered
      by
      the federal banking agencies. Failure to meet minimum capital requirements
      can
      initiate certain mandatory and possibly additional discretionary actions by
      regulators that, if undertaken could have a direct material effect on the
      Company's financial statements. Under capital adequacy guidelines and the
      regulatory framework for prompt corrective action, the Company must meet
      specific capital guidelines that involve quantitative measures of the Company’s
      assets, liabilities and certain off-balance-sheet items as calculated under
      regulatory accounting practices. The Company’s capital amounts and
      classification are also subject to qualitative judgments by the regulators
      about
      components, risk weightings and other factors.




12


Quantitative
      measures established by regulations to ensure capital adequacy require the
      Bank
      to maintain minimum amounts and ratios (set forth in the table below) of total
      and Tier 1 capital (as defined in the regulations) to risk-weighted assets
      (as
      defined), and of Tier 1 capital (as defined) to average assets (as defined).
      Management believes, as of June 30, 2007 and December 31, 2006, that the Bank
      meets all capital adequacy requirements to which it is subject.




As
      of
      June 30, 2007 and December 31, 2006, the most recent notification from the
      Bank’s regulators categorized the Bank as well capitalized under the regulatory
      framework for prompt corrective action. To be categorized as well capitalized,
      the Bank must maintain minimum total risk-based, Tier 1 risk-based, and Tier
      1
      leverage ratios as set forth in the table. There are no conditions or events
      since that notification that management believes have changed the institution's
      category.


**(000's)**
                
                **Actual**
                
                **For
                    Capital Adequacy Purposes**
                
                **To
                    Be Well Capitalized Under Prompt Corrective Action
                    Provisions****As
                      of June 30, 2007**
                
                **Amount**
                
                **Ratio**
                
                **Amount**
                
                **Ratio**
                
                **Amount**
                
                **Ratio**Total
                    Capital (to Risk Weighted Assets)
                
                $
                14,326
                
                
                12.11
                %
                $
                9,461
                
                ≥
                
                
                8.00
                %
                $
                11,827
                
                ≥
                
                
                10.00
                %Tier
                    1 Capital (to Risk Weighted Assets)
                
                
                13,026
                
                
                11.01
                %
                
                4,731
                
                ≥
                
                
                4.00
                %
                
                7,096
                
                ≥
                
                
                6.00
                %Tier
                    1 Capital (to Average Assets)
                
                
                13,026
                
                
                9.53
                %
                
                5,467
                
                ≥
                
                
                4.00
                %
                
                6,834
                
                ≥
                
                
                5.00
                %**As
                    of December 31, 2006**Total
                    Capital (to Risk Weighted Assets)
                
                $
                13,351
                
                
                13.55
                %
                $
                7,885
                
                ≥
                
                
                8.00
                %
                $
                9,856
                
                ≥
                
                
                10.00
                %Tier
                    1 Capital (to Risk Weighted Assets)
                
                
                12,351
                
                
                12.53
                %
                
                3,943
                
                ≥
                
                
                4.00
                %
                
                5,914
                
                ≥
                
                
                6.00
                %Tier
                    1 Capital (to Average Assets)
                
                
                12,351
                
                
                10.81
                %
                
                4,571
                
                ≥
                
                
                4.00
                %
                
                5,714
                
                ≥
                
                
                5.00
                %


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




**T
                BANCSHARES, INC.****CONDENSED
                BALANCE SHEET****(Unaudited)**




**June
                  30,**
              
              **December
                  31,****2007**
              
              **2006****(000's)****ASSETS**Cash
                  and due from banks
              
              $
              699
              
              $
              727Investment
                  in subsidiary
              
              
              13,026
              
              
              12,351Total
                  Assets
              
              $
              13,725
              
              $
              13,078**LIABILITIES
                  AND CAPITAL**Capital
              
              
              13,725
              
              
              13,078Total
                  Liabilities and Capital
              
              $
              13,725
              
              $
              13,078
  13


**T
                  BANCSHARES, INC.****CONDENSED
                  STATEMENT OF INCOME****(Unaudited)**
 **Three
                    Months Ended June 30,**
                
                **Six
                    Months Ended June 30,****2007**
                
                **2006**
                
                **2007**
                
                **2006****(000's)**Equity
                    in income (loss) from subsidiary
                
                $
                523
                
                $
                (206
                )
                $
                675
                
                $
                (544
                )Noninterest
                    expense:Professional
                    and administrative
                
                
                61
                
                
                37
                
                
                66
                
                
                43Stock
                    options
                
                
                18
                
                
                19
                
                
                34
                
                
                38Total
                    noninterest expenses
                
                
                79
                
                
                56
                
                
                100
                
                
                81Net
                    income (loss)
                
                $
                444
                
                $
                (262
                )
                $
                575
                
                $
                (625
                )
  14
 
 **T
                    BANCSHARES, INC.****CONDENSED
                    STATEMENT OF CASH FLOWS****(Unaudited)**
 
 **Six
                    Months Ended June 30,****2007**
                
                **2006****(000's)****Cash
                    Flows from Operating Activities**Net
                    Income
                
                $
                575
                
                $
                (625
                )Adjustments
                    to reconcile net income (loss) tonet
                    cash provided (used) by operating activities:Equity
                    in (earnings) loss of Bank
                
                
                (675
                )
                
                544Stock
                    based compensation
                
                
                34
                
                
                38Net
                    change in other assets
                
                
                -
                
                
                8Net
                    change in other liabilities
                
                
                -
                
                
                -Net
                    cash provided (used) by operating activities
                
                
                (66
                )
                
                (35
                )**Cash
                    Flows from Investing Activities**Proceeds
                    from sale of premises and equipment
                
                
                -
                
                
                -Net
                    cash used in investing activities
                
                
                -
                
                
                -**Cash
                    Flows from Financing Activities**Exercise
                    of warrants
                
                
                38
                
                
                -Net
                    cash provided by financing activities
                
                
                38
                
                
                -Net
                    change in cash and cash equivalents
                
                
                (28
                )
                
                (35
                )Cash
                    and cash equivalents at beginning of period
                
                
                727
                
                
                674Cash
                    and cash equivalents at end of period
                
                $
                699
                
                $
                639Supplemental
                    disclosures of cash flow informationCash
                    paid during the period forInterest
                
                $
                -
                
                $
                -Income
                    taxes
                
                $
                -
                
                $
                -





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




The
      following discussion and analysis represents our consolidated financial
      condition as of June 30, 2007 and December 31, 2006, and our consolidated
      results of operations for the three and six months ended June 30, 2007 and
      2006.
      The discussion should be read in conjunction with our financial statements
      and
      the notes related thereto which appear elsewhere in this Quarterly Report on
      Form 10-QSB.




Statements
      contained in this report that are not purely historical are forward-looking
      statements within the meaning of Section 21E of the Securities Exchange Act
      of
      1934, as amended, including our expectations, intentions, beliefs, or strategies
      regarding the future. Any statements in this document about expectations,
      beliefs, plans, objectives, assumptions or future events or performance are
      not
      historical facts and are forward-looking statements. These statements are often,
      but not always, made through the use of words or phrases such as “may,”
“should,” “could,” “predict,” “potential,” “believe,” “will likely result,”
“expect,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,”
“would” and “outlook,” and similar expressions. Accordingly, these statements
      involve estimates, assumptions and uncertainties, which could cause actual
      results to differ materially from those expressed in them. Any forward-looking
      statements are qualified in their entirety by reference to the factors discussed
      throughout this document. All forward-looking statements concerning economic
      conditions, rates of growth, rates of income or values as may be included in
      this document are based on information available to us on the dates noted,
      and
      we assume no obligation to update any such forward-looking statements. It is
      important to note that our actual results may differ materially from those
      in
      such forward-looking statements due to fluctuations in interest rates,
      inflation, government regulations, economic conditions, customer
      disintermediation and competitive product and pricing pressures in the
      geographic and business areas in which we conduct operations, including our
      plans, objectives, expectations and intentions and other factors discussed
      under
      the section entitled “Risk Factors,” in our Annual Report on Form 10-KSB for the
      year ended December 31, 2006, including the following:




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


15




·
            we
                have incurred substantial start-up expenses associated with our
                organization and our public offering and thus, have only recently
                returned
                a profit;




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




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




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




·
            we
                face substantial competition in our primary market
                area;




·
            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.




These
      factors and the risk factors referred to in our Annual Report on Form 10-KSB
      for
      the year ended December 31, 2006 could cause actual results or outcomes to
      differ materially from those expressed in any forward-looking statements made
      by
      us, and you should not place undue reliance on any such forward-looking
      statements. Any forward-looking statement reflects only as of the date on which
      it is made and we do not undertake any obligation to update any forward-looking
      statement or statements to reflect events or circumstances after the date on
      which such statement is made or to reflect the occurrence of unanticipated
      events. New factors emerge from time to time, and it is not possible for us
      to
      predict which will arise. In addition, we cannot assess the impact of each
      factor on our business or the extent to which any factor, or combination of
      factors, may cause actual results to differ materially from those contained
      in
      any forward-looking statements.




16




**Executive
      Overview**




***Introduction***




T
      Bancshares , Inc. (the “Company”, “we”, “us”, or “our”, hereafter) is a
      bank holding company headquartered in Dallas, Texas, offering a broad array
      of
      banking services through our wholly-owned banking subsidiary, T Bank, N.A.,
      a
      national bank (the “Bank”). Our principal markets include North Dallas, Addison,
      Plano, Frisco and the neighboring Texas communities. As of June 30, 2007, we
      had, on a consolidated basis, total assets of $140.6 million, net loans of
      $109.0 million, total deposits of $126.4 million, and shareholders’ equity of
      $13.7 million. We currently operate through a main office located at 16000
      Dallas Parkway, Dallas, Texas, and a branch office at 8100 North Dallas Parkway,
      Plano, Texas.  We also have a loan production office located at 850 E State
      Highway 114, Suite 200, Southlake, Texas.




We
      were
      incorporated under the laws of the State of Texas on December 23, 2002 to
      organize and serve as the holding company for the Bank. In 2004, we completed
      an
      initial public offering of our common stock, issuing 1,680,000 shares at a
      price
      of $10.00 per share. The net proceeds that we received from the offering, after
      deducting offering expenses, were approximately $16.4 million. The Bank opened
      for business on November 2, 2004.




The
      following discussion focuses on our financial condition at June 30, 2007 and
      December 31, 2006, and our results of operations for the three and six months
      ended June 30, 2007 and 2006.




**Recent
      Developments**




On
      April
      12, 2007, the Bank entered into an informal administrative action with the
      Office of the Comptroller of the Currency (the “OCC”). Under this document, the
      Bank has agreed to revise and implement changes to its internal audit program
      and its Bank Secrecy Act controls. In addition, the document calls for increased
      management control and board level oversight of Bank and Trust Department
      operations, especially in the areas of risk identification and
      monitoring.




Because
      management intends to adequately address the issues raised by the OCC,
      management believes that the informal administrative action will have no
      material impact on the Company’s operating results or financial condition and it
      will not constrain the Company’s business. Management is committed to resolving
      these issues and has already initiated numerous corrective actions.




On
      June
      13, 2007, our shareholders approved an amendment to our articles of
      incorporation to change our name from “First Metroplex Capital, Inc.” to “T
      Bancshares, Inc.” The amendment was affected on June 25, 2007.




**Results
      of Operations**




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




Net
      interest income is the difference between interest income, principally from
      loan, lease and investment securities portfolios, and interest expense,
      principally on customer deposits and borrowings. Net interest income is our
      principal source of earnings. Changes in net interest income result from changes
      in volume and spread and are reflected in the net interest margin. Volume refers
      to the average dollar level of interest-earning assets and interest-bearing
      liabilities. Spread refers to the difference between the average yield on
      interest-earning assets and the average cost of interest-bearing liabilities.
      Margin refers to net interest income divided by average interest-earning assets,
      and is influenced by the level and relative mix of interest-earning assets
      and
      interest-bearing liabilities.




Net
      interest income increased 89.8%, or $1.2 million to $2.6 million for the six
      months ended June 30, 2007 from $1.4 million for the six months ended June 30,
      2006. Net interest margin was 4.1% and 5.1% for the six months ended June 30,
      2007 and 2006, respectively. The decrease in margin is primarily the result
      of
      an increase in the volume of money market and time deposits and rates paid
      on
      those time deposits.




Total
      interest income increased by 161.1% to $5.0 million for the six months ended
      June 30, 2007, as compared to $1.9 million for the six months ended June 30,
      2006. This increase is attributable primarily to increased loan volumes
      resulting from our ongoing marketing efforts.




17


Total
      interest expense increased by 332.3% to $2.4 million for the six months ended
      June 30, 2007, compared to $556,000 for the six months ended June 30, 2006.
      This
      increase resulted primarily from growth in our money market and time deposits
      of
      $44.7 and $24.1 million, respectively from our ongoing marketing efforts. The
      average interest rate paid for interest-bearing deposits for the six months
      ended June 30, 2007, was 4.7%, compared to 3.3% for the same period in
      2006.




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




The
      following were key indicators of our performance and results of operations
      through the second quarter of 2007:




·
            total
                assets grew to $140.6 million at the end of the second quarter of
                2007,
                representing an increase of $10.2 million or 7.8%, from $130.4 million
                at
                the end of 2006;




·
            total
                loans grew to $109.0 million at the end of the second quarter of
                2007,
                representing an increase of $20.9 million or 23.8%, from $88.1 million
                at
                the end of 2006;




·
            total
                deposits grew to $126.4 million at the end of the second quarter
                of 2007,
                representing an increase of $9.3 million or 7.9%, from $117.1 million
                at
                the end of 2006;




·
            total
                revenue grew to $10.6 million for the six months ended June 30, 2007
                compared to $2.1 million for the six months ended June 30, 2006,
                representing an increase of 404.7%;
                and




·
            net
                income was $575,000 for the six months ended June 30, 2007, compared
                to a
                net loss of $625,000 for the six months ended June 30,
                2006.




These
      items, as well as other factors, are discussed in further detail throughout
      this
“Management’s Discussion and Analysis or Plan of Operation” section of this
      Quarterly Report on Form 10-QSB.




The
      following table sets forth our average balances of assets, liabilities and
      shareholders’ equity, in addition to the major components of net interest income
      and our net interest margin for the three and six months ended June 30, 2007
      and
      2006.




18




**FINANCIAL
                  SUMMARY****Consolidated
                  Daily Average Balances, Average Yields and
                  Rates**
 
 **Six
                  Months Ended June 30,****2007**
              
              **2006****Average**
              
              
              
              **Average**
              
              **Average**
              
              
              
              **Average****Balance**
              
              **Interest**
              
              **Yied**
              
              **Balance**
              
              **Interest**
              
              **Yied****(000'S)****Interest-earning
                  assets**Loans,
                  net of reserve
              
              $
              97,007
              
              $
              4,269
              
              
              8.8
              %
              $
              33,329
              
              $
              1,468
              
              
              8.8
              %Federal
                  funds sold
              
              
              27,814
              
              
              720
              
              
              5.2
              %
              
              19,343
              
              
              445
              
              
              4.6
              %Securities
              
              
              1,467
              
              
              39
              
              
              5.3
              %
              
              420
              
              
              13
              
              
              6.2
              %Total
                  earning assets
              
              
              126,289
              
              
              5,028
              
              
              8.0
              %
              
              53,092
              
              
              1,926
              
              
              7.3
              %Cash
                  and other assets
              
              
              6,196
              
              
              
              
              
              
              
              
              3,729Total
                  assets
              
              $
              132,485
              
              
              
              
              
              
              
              $
              56,821**Interest-bearing
                  liabilities**NOW
                  accounts
              
              $
              1,692
              
              $
              10
              
              
              1.2
              %
              $
              1,468
              
              $
              9
              
              
              1.2
              %Money
                  market accounts
              
              
              63,934
              
              
              1,441
              
              
              4.5
              %
              
              19,202
              
              
              276
              
              
              2.9
              %Savings
                  accounts
              
              
              349
              
              
              2
              
              
              1.4
              %
              
              389
              
              
              3
              
              
              1.5
              %Certificates
                  of deposit $100,000 or less
              
              
              14,360
              
              
              380
              
              
              5.3
              %
              
              3,612
              
              
              75
              
              
              4.2
              %Certificates
                  of deposit $100,000 or more
              
              
              23,036
              
              
              614
              
              
              5.3
              %
              
              9,677
              
              
              203
              
              
              4.2
              %Total
                  interest bearing deposits
              
              
              103,371
              
              
              2,447
              
              
              4.7
              %
              
              34,348
              
              
              566
              
              
              3.3
              %Noninterest
                  bearing deposits
              
              
              16,049
              
              
              
              
              
              
              
              
              10,546Other
                  liabilities
              
              
              587
              
              
              
              
              
              
              
              
              84Stockholders
                  equity
              
              
              12,478
              
              
              
              
              
              
              
              
              11,844Total
                  liabilities and stockholders' equity
              
              $
              132,485
              
              
              
              
              
              
              
              $
              56,822Net
                  interest income
              
              
              
              
              
              2,581
              
              
              
              
              
              
              
              
              1,360Net
                  interest spread
              
              
              
              
              
              
              
              
              3.2
              %
              
              
              
              
              
              
              
              4.0
              %Net
                  interest margin
              
              
              
              
              
              
              
              
              4.1
              %
              
              
              
              
              
              
              
              5.1
              %Provision
                  for loan loss
              
              
              
              
              
              300
              
              
              
              
              
              
              
              
              325Non-interest
                  income
              
              
              
              
              
              5,590
              
              
              
              
              
              
              
              
              187Non-interest
                  expense
              
              
              
              
              
              7,296
              
              
              
              
              
              
              
              
              1,847Income
                  (loss) before income taxes
              
              
              
              
              
              575
              
              
              
              
              
              
              
              
              (625
              )Income
                  taxes expense (benefit)
              
              
              
              
              
              -
              
              
              
              
              
              
              
              
              -Net
                  loss
              
              
              
              
              $
              575
              
              
              
              
              
              
              
              $
              (625
              )Earnings
                  (loss) per share
              
              
              
              
              
              0.34
              
              
              
              
              
              
              
              
              (0.37
              )Return
                  on average equity
              
              
              
              
              
              9.2
              %
              
              
              
              
              
              
              
              -10.5
              %Return
                  on average assets
              
              
              
              
              
              0.9
              %
              
              
              
              
              
              
              
              -2.2
              %Equity
                  to assets ratio
              
              
              
              
              
              9.4
              %
              
              
              
              
              
              
              
              20.8
              %


Changes
      in volume and changes in interest rates affect our interest income and interest
      expense. The effect of these changes is typically displayed in a volume, mix
      and
      rate analysis table which compares the changes in income and expense over
      periods. Since the Company has a limited operating history, data to meaningfully
      analyze these changes is not currently available.




19


***Provision
      for Loan Losses***




We
      determined a provision for loan losses that we consider sufficient to maintain
      an allowance to absorb probable losses inherent in our portfolio as of the
      balance sheet date. For additional information concerning this determination,
      see the section of this discussion and analysis captioned “Allowance for Loan
      Losses.”




For
      the
      three and six months ended June 30, 2007, our provision for loan losses was
      $150,000 and $300,000, respectively. The provision amounts are directly related
      to loan volumes. For the three and six months ended June 30, 2006, our provision
      for loan losses was $175,000 and $325,000, respectively. We did not have any
      charge-offs during the six months ended June 30, 2007.




***Non-interest
      Income***




Non-interest
      income for the three and six months ended June 30, 2007 amounted to
      approximately $3.0 million and $5.6 million, respectively, and was primarily
      attributable to fee income generated by the Bank for trust services, which
      the
      Bank began offering in the third quarter of 2006, and service charges on
      depository accounts. Fee income and services charges for the second quarter
      of
      2007 totaled $2.3 million and $660,000, respectively, and $4.4 million and
      $1.2
      million, respectively, for the six months ended June 30, 2007, compared to
      $135,000 in service charges for the second quarter of 2006 and $187,000 for
      the
      six months ended June 30, 2006.




***Noninterest
      Expense***




Total
      noninterest expense was $3.7 million and $7.3 million for the three and six
      months ended June 30, 2007, compared to $988,000 and $1.8 million during the
      same periods of 2006.




Salaries
      and employee benefits totaled $697,000 and $1.3 million for the three and six
      months ended June 30, 2007, as compared to $542,000 and $1.1 million for the
      same periods of 2006. We had 28 full-time equivalent employees as of June 30,
      2007 compared to 20 full-time equivalent employees as of June 30, 2006. Included
      in the first and second quarters of 2007 is $16,000 and $18,000, respectively,
      of expense related to stock options. For the first and second quarters of 2006,
      expense related to stock options was $19,000 and $38,000,
      respectively.




Occupancy
      and equipment expenses totaled $248,000 and $504,000 for the three and six
      months ended June 30, 2007, as compared to $145,000 and $276,000 for the same
      periods of 2006, respectively, attributable primarily to lease expense and
      depreciation and amortization of leasehold improvements and furniture, fixtures
      and equipment.




Data
      processing expenses were $238,000 and $423,000 for the three and six months
      ended June 30, 2007, compared to $85,000 and $140,000 for the same periods
      of
      2006, respectively, as a result of increased volume and new services.




Professional
      fees were $2.2 million and $4.5 million for the three and six months ended
      June
      30, 2007, compared to $61,000 and $79,000 for the same periods of 2006,
      respectively, primarily as a result of trust services.




***Income
      Taxes***




No
      federal tax expense was recorded for the quarter ended June 30, 2007, because
      we
      are using net operating losses to offset taxable income. Based upon the
      Company’s limited operating history, the federal tax benefit of these losses has
      been fully reserved. Cumulative net operating loss available to carry forward
      for tax purposes is approximately $1,800,000 as of December 31,
      2006.




**Financial
      Condition**




Our
      total
      assets as of June 30, 2007 were $140.6 million, compared to $130.4 million
      as of
      December 31, 2006. The increase in our total assets was primarily the result
      of
      increases in deposits.




Our
      total
      deposits increased to $126.4 million as of June 30, 2007, compared to $117.1
      million as of December 31, 2006. Our deposit growth is primarily the result
      of
      our continued marketing efforts to attract new clients and growth from trust
      services.




20


As
      of
      June 30, 2007, our shareholders’ equity was $13.7 million, compared to $13.1
      million as of December 31, 2006. The increase was primarily the result of
      operating income for the six months ended June 30, 2007.




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




At
      June
      30, 2007, the Bank had $23.6 million in federal funds sold. At December 31,
      2006
      the Bank had $36.1 million federal funds sold. Federal funds sold allow the
      Bank
      to meet liquidity requirements and provide temporary interest-bearing holdings
      until the funds can be otherwise deployed or invested.




***Investment
      Securities***




Our
      investment portfolio primarily serves as a source of interest income and,
      secondarily, as a source of liquidity and a management tool for our interest
      rate sensitivity. We manage our investment portfolio according to a written
      investment policy established by our Board of Directors and implemented by
      our
      Investment/Asset-Liability Committee.




At
      June
      30, 2007 and December 31, 2006, the Bank’s securities consisted of Federal
      Reserve Bank stock at cost of $420,000, and Federal Home Loan Bank stock at
      cost of $78,000 and $48,000, respectively. The Bank had 90-maturing U.S.
      Treasury Securities at June 30, 2007 and December 31, 2006, having an amortized
      cost and estimated fair value of $1.0 million and $988,000, respectively.
      Weighted average yield of the securities portfolio at June 30, 2007 was 5.3%.




***Loan
      Portfolio***




Our
      primary source of income is interest on loans. The following table presents
      the
      composition of our loan portfolio by category as of the dates
      indicated:




**As
                  of**
              
              **As
                  of****June
                  30, 2007**
              
              **December
                  31, 2006****(000's)**Commercial
                  and industrial
              
              $
              73,587
              
              $
              54,835Consumer
                  installment
              
              
              3,189
              
              
              3,992Real
                  estate — mortgage
              
              
              21,119
              
              
              21,073Real
                  estate — construction
              
              
              12,619
              
              
              9,297Other
              
              
              88
              
              
              126110,602
              
              
              89,323Less
                  allowance for loan losses
              
              
              1,300
              
              
              1,000Less
                  deferred loan fees
              
              
              255
              
              
              240$
              109,047
              
              $
              88,083




As
      of
      June 30, 2007 and December 31, 2006, our total loans were $110.6 million and
      $89.3 million, respectively. The increase in our loan volume is a result of
      continued strong demand for commercial and industrial loans. Total loans, net
      of
      reserves and deferred fees, as a percentage of total assets were 77.6% as of
      June 30, 2007.




Our
      commercial loan portfolio is comprised of lines of credit for working capital
      and term loans to finance equipment and other business assets. Our lines of
      credit typically are limited to a percentage of the value of the assets securing
      the line. Lines of credit and term loans typically are reviewed annually and
      are
      supported by accounts receivable, inventory, equipment and other assets of
      our
      clients businesses. At June 30, 2007 and December 31, 2006, commercial loans
      totaled $73.6 million and $54.8 million, approximately 66.5% and 61.4% of our
      total funded loans, respectively.




Our
      consumer loan portfolio consists of personal lines of credit and loans to
      acquire personal assets such as automobiles and boats. Our lines of credit
      generally have terms of one year and our term loans generally have terms of
      three to five years. Our lines of credit typically have floating rates. At
      June
      30, 2007 and December 31, 2006, consumer loans totaled $3.2 million and $4.0
      million, approximately 2.9% and 4.5% of our total funded loans,
      respectively.




21


Our
      real
      estate loan portfolio is comprised of construction loans and short term mortgage
      loans. Construction loans consist primarily of single-family residential
      properties, have a term of less than one year and have floating rates and
      commitment fees. Our construction loans are typically to builders who have
      an
      established record of successful project completion and loan repayment.
      Short-term mortgage loans typically are secured by commercial properties
      occupied by the borrower, have terms of three to ten years with both fixed
      and
      floating rates. At June 30, 2007 and December 31, 2006, real estate loans
      totaled $33.7 million and $30.4 million, approximately 30.5% and 34.0% of our
      total loans, respectively.




Loan
      concentrations are considered to exist when there are amounts loaned to multiple
      borrowers engaged in similar activities that would cause them to be similarly
      impacted by economic or other conditions. At June 30, 2007, our commercial
      loan
      portfolio included $51.0 million of loans, approximately 46% of our total funded
      loans, to fund the purchase of dental practices. We believe that these loans
      are
      well secured to credit worthy borrowers and are diversified geographically.
      As
      new loans are generated and the Bank continues to grow, the percentage of the
      total loan portfolio consisting of the foregoing concentration may remain
      constant thereby continuing the risk associated with industry
      concentration.




Management
      may renew loans at maturity when requested by a customer whose financial
      strength appears to support such a renewal or when such a renewal appears to
      be
      in the best interest of the Bank. The Bank requires payment of accrued interest
      in such instances and may adjust the rate of interest, require a principal
      reduction, or modify other terms of the loan at the time of renewal.




The
      following table shows the maturity distribution and type of loan within our
      loan
      portfolio as of June 30, 2007:


**As
                  of June 30, 2007****Over
                  1 Year through 5****Years**
              
              **Over
                  5 Years****One
                  Year**
              
              
              
              **Floating
                  or**
              
              
              
              **Floating
                  or****or**
              
              
              
              **Adjustable**
              
              
              
              **Adjustable****Less**
              
              **Fixed
                  Rate**
              
              **Rate**
              
              **Fixed
                  Rate**
              
              **Rate**
              
              **Total****(000's)**Commercial
                  and industrial
              
              $
              20,976
              
              $
              9,170
              
              $
              1,666
              
              $
              31,531
              
              $
              10,244
              
              $
              73,587Consumer
                  installment
              
              
              498
              
              
              1,215
              
              
              529
              
              
              947
              
              
              -
              
              
              3,189Real
                  estate — mortgage
              
              
              8,369
              
              
              6,579
              
              
              3,087
              
              
              1,499
              
              
              1,586
              
              
              21,120Real
                  estate — construction
              
              
              6,831
              
              
              -
              
              
              3,804
              
              
              -
              
              
              1,983
              
              
              12,618Other
              
              
              88
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              88Total
              
              $
              36,762
              
              $
              16,964
              
              $
              9,086
              
              $
              33,977
              
              $
              13,813
              
              $
              110,602


**Nonperforming
      Loans and Assets**




Nonperforming
      assets consist of loans on nonaccrual status, loans 90 days or more past due
      and
      still accruing interest, loans that have been restructured resulting in a
      reduction or deferral of interest or principal, OREO, and other repossessed
      assets. As of June 30, 2007, we had $50,000 in loans 90 days or more past due
      and still accruing interest.




A
      potential problem loan is defined as a loan where information about possible
      credit problems of the borrower is known, causing management to have doubts
      as
      to the ability of the borrower to comply with the present loan payment terms
      and
      which may result in the inclusion of such loan in one of the nonperforming
      asset
      categories. We maintain an internally classified loan list that helps management
      assess the overall quality of the loan portfolio and the adequacy of the
      allowance for loan losses. Loans classified as “special mention” are those that
      contain a weakness that, if left unattended, could develop into a problem
      affecting the ultimate collectibility of the loan. Loans classified as
“substandard” are those loans with clear and defined weaknesses such as highly
      leveraged positions, unfavorable financial ratios, uncertain repayment resources
      or poor financial condition, which may jeopardize recoverability of the loan.
      Loans classified as “doubtful” are those loans that have characteristics similar
      to substandard loans, but also have an increased risk that loss may occur or
      at
      least a portion of the loan may require a charge-off if liquidated at present.
      Although loans classified as substandard do not duplicate loans classified
      as
      doubtful, both substandard and doubtful loans may include some loans that are
      past due at least 90 days, are on nonaccrual status or have been restructured.
      Loans classified as “loss” are those loans that are in the process of being
      charged-off. At June 30, 2007 the Bank had $2.0 million in special mention
      loans, $544,000 in substandard loans, and no loans classified as doubtful or
      loss.




22


***Allowance
      for Loan Losses***




Implicit
      in our lending activities is the fact that we will experience loan losses and
      that the risk of loss will vary with the type of loan being made and the
      creditworthiness of the borrower over the term of the loan. To reflect the
      currently perceived risk of loss associated with our loan portfolio, additions
      are made to our allowance for loan losses in the form of direct charges against
      income and our allowance is available to absorb possible loan losses. The
      factors that influence the allowance amount include, among others, the remaining
      collateral and/or financial condition of the borrowers, historical loan loss,
      changes in the size and composition of the loan portfolio, and general economic
      conditions.




The
      amount of the allowance equals the cumulative total of the provisions made
      from
      time to time, reduced by loan charge-offs and increased by recoveries of loans
      previously charged-off. Until management has adequate historical data upon
      which
      to base the estimate of the allowance for loan losses, a balance of
      approximately 1.2% of the outstanding principal will be used unless additional
      information regarding the ability of the identified borrowers to repay certain
      loans, current economic conditions or other pertinent factors that indicate
      a
      different allowance is needed. Our allowance was $1.3 million and $1.0 million
      as of June 30, 2007 and December 31, 2006, respectively.




Credit
      and loan decisions are made by management and the Board of Directors in
      conformity with loan policies established by the Board. The Bank’s practice is
      to charge-off any loan or portion of a loan when the loan is determined by
      management to be fully or partially uncollectible due to the borrower’s failure
      to meet repayment terms, the borrower’s deteriorating or deteriorated financial
      condition, the depreciation of the underlying collateral, the loan’s
      classification as a loss by regulatory examiners, or other reasons. During
      the
      year ended December 31, 2006 and the first six months of 2007, we did not incur
      any charge-offs.




The
      following table sets forth the specific allocation of the allowance for the
      periods indicated and the percentage of allocated possible loan losses in each
      category to total gross loans. An allocation for a loan classification is only
      for internal analysis of the adequacy of the allowance and is not an indication
      of expected or anticipated losses.


**As
                  of June 30, 2007**
              
              **As
                  of December 31, 2006****(000's)**
              
              **Amount**
              
              **Loan
                  Category to Gross Loans**
              
              **Amount**
              
              **Loan
                  Category to Gross Loans****Allocated:**Commercial
                  and industrial
              
              $
              866
              
              
              66.61
              %
              $
              556
              
              
              55.60
              %Consumer
                  installment
              
              
              37
              
              
              2.89
              %
              
              52
              
              
              5.20
              %Real
                  estate — mortgage
              
              
              249
              
              
              19.09
              %
              
              270
              
              
              27.00
              %Real
                  estate — construction
              
              
              148
              
              
              11.41
              %
              
              122
              
              
              12.20
              %Total
                  allowance for loan losses
              
              $
              1,300
              
              
              100.00
              %
              $
              1,000
              
              
              100.00
              %


**Nonearning
      Assets**




Premises,
      leasehold improvements and equipment, net of accumulated depreciation and
      amortization, totaled $1.9 million at June 30, 2007 and $1.8 million at December
      31, 2006. In June 2006, we leased an additional 3,493 square feet of space
      at
      the Dallas location for a term of 64 months to house our trust and operations
      areas.




23


***Deposits***




Deposits
      are our primary source of funds. The following table sets forth, for the periods
      indicated, the distribution of our average deposit account balances and average
      cost of funds on each category of deposits:


**For
                  the six months ended**
              
              **For
                  the six months ended****June
                  30, 2007**
              
              **June
                  30, 2006****Average**
              
              **Percent
                  of**
              
              **Average**
              
              **Average**
              
              **Percent
                  of**
              
              **Average****Balance**
              
              **Deposits**
              
              **Rate**
              
              **Balance**
              
              **Deposits**
              
              **Rate****(000's)**Noninterest
                  bearing deposits
              
              $
              16,049
              
              
              13.44
              %
              
              0.00
              %
              $
              10,546
              
              
              23.49
              %
              
              0.00
              %NOW
                  accounts
              
              
              1,692
              
              
              1.42
              %
              
              1.19
              %
              
              1,468
              
              
              3.27
              %
              
              1.23
              %Money
                  market accounts
              
              
              63,934
              
              
              53.54
              %
              
              4.51
              %
              
              19,202
              
              
              42.77
              %
              
              2.87
              %Savings
                  accounts
              
              
              349
              
              
              0.29
              %
              
              1.41
              %
              
              389
              
              
              0.87
              %
              
              1.54
              %Certificates
                  of deposit, less than $100,000
              
              
              14,360
              
              
              12.02
              %
              
              5.29
              %
              
              3,612
              
              
              8.05
              %
              
              4.15
              %Certificates
                  of deposit, more than $100,000
              
              
              23,036
              
              
              19.29
              %
              
              5.33
              %
              
              9,677
              
              
              21.56
              %
              
              4.20
              %Total
                  deposits
              
              $
              119,420
              
              
              100.00
              %
              
              4.73
              %
              $
              44,894
              
              
              100.00
              %
              
              3.30
              %


Total
      deposits at June 30, 2007 and December 31, 2006 were $126.4 million and $117.1
      million respectively, representing an increase of $9.3 million, or 7.9%, during
      the six month period ending June 30, 2007. The Bank continues to seek ways
      to
      attract additional deposits.




The
      following table sets forth the amount and maturities of the certificates of
      deposit of $100,000 or more as of the dates indicated:


**June
                  30,**
              
              **December
                  31,****2007**
              
              **2006****(000's)**Three
                  months or less
              
              $
              6,575
              
              $
              1,221Over
                  three months through 12 months
              
              
              8,443
              
              
              11,977Over
                  one year through three years
              
              
              1,026
              
              
              524Over
                  three years
              
              
              9,438
              
              
              7,351Total
              
              $
              25,482
              
              $
              21,073


**Off-Balance
      Sheet Arrangements**




Neither
      the Company nor the Bank has any material off-balance sheet arrangements other
      than the Bank’s commitments to extend credit at June 30, 2007.




***Borrowings***




At
      June
      30, 2007, the Company had outstanding loan origination commitments and unused
      commercial and retail lines of credit of $18.0 million and $90,000 in standby
      letters of credit. Certificates of deposit that are scheduled to mature within
      one year totaled $22.0 million at June 30, 2007. The Bank has access to a
      variety of borrowing sources including federal funds purchased and advances
      from
      Federal Home Loan Bank. However, management believes the Bank has sufficient
      funds available to meet current originations and other commitments.




24




The
      Bank’s significant contractual obligations and other potential funding needs at
      June 30, 2007 consist of:


**As
                  of June 30, 2007****Less
                  than**
              
              **One
                  to Three**
              
              **Over
                  Three to**
              
              **Over
                  Five****One
                  Year**
              
              **Years**
              
              **Five
                  Years**
              
              **Years****(000's)**Operating
                  leases
              
              $
              278
              
              $
              571
              
              $
              588
              
              $
              623Certificates
                  of deposit
              
              $
              21,975
              
              $
              2,405
              
              $
              12,982
              
              $
              2,686


**Capital
      Resources and Capital Adequacy Requirements**




The
      risk-based capital regulations established and administered by the banking
      regulatory agencies discussed previously are applicable to the Bank. Risk-based
      capital guidelines are designed to make regulatory capital requirements more
      sensitive to differences in risk profiles among banks, to account for
      off-balance sheet exposure, and to minimize disincentives for holding liquid
      assets. Under the regulations, assets and off-balance sheet items are assigned
      to broad risk categories, each with appropriate weights. The resulting capital
      ratios represent capital as a percentage of total risk weighted assets and
      off-balance sheet items. Under the prompt corrective action regulations, to
      be
      adequately capitalized a bank must maintain minimum ratios of total capital
      to
      risk-weighted assets of 8.00%, Tier 1 capital to risk-weighted assets of 4.00%,
      and Tier 1 capital to total assets of 4.00%. Failure to meet these capital
      requirements can initiate certain mandatory and possibly additional
      discretionary, actions by regulators that, if undertaken, could have a direct
      material effect on the Bank’s financial statements.




As
      of
      June 30, 2007, the Bank was categorized as well-capitalized. A well-capitalized
      institution must maintain a minimum ratio of total capital to risk-weighted
      assets of at least 10.00%, a minimum ratio of Tier 1 capital to risk weighted
      assets of at least 6.00%, and a minimum ratio of Tier 1 capital to total assets
      of at least 5.00% and must not be subject to any written order, agreement,
      or
      directive requiring it to meet or maintain a specific capital level.




25


**(000's)**
              
              **Actual**
              
              **For
                  Capital Adequacy Purposes**
              
              **To
                  Be Well Capitalized Under Prompt Corrective Action
                  Provisions****As
                    of June 30, 2007**
              
              **Amount**
              
              **Ratio**
              
              **Amount**
              
              **Ratio**
              
              **Amount**
              
              **Ratio**Total
                  Capital (to Risk Weighted Assets)
              
              $
              14,326
              
              
              12.11
              %
              $
              9,461
              
              
              ≥
              
              
              8.00
              %
              $
              11,827
              
              
              ≥
              
              
              10.00
              %Tier
                  1 Capital (to Risk Weighted Assets)
              
              
              13,026
              
              
              11.01
              %
              
              4,731
              
              
              ≥
              
              
              4.00
              %
              
              7,096
              
              
              ≥
              
              
              6.00
              %Tier
                  1 Capital (to Average Assets)
              
              
              13,026
              
              
              9.53
              %
              
              5,467
              
              
              ≥
              
              
              4.00
              %
              
              6,834
              
              
              ≥
              
              
              5.00
              %**As
                  of December 31, 2006**Total
                  Capital (to Risk Weighted Assets)
              
              $
              13,351
              
              
              13.55
              %
              $
              7,885
              
              
              ≥
              
              
              8.00
              %
              $
              9,856
              
              
              ≥
              
              
              10.00
              %Tier
                  1 Capital (to Risk Weighted Assets)
              
              
              12,351
              
              
              12.53
              %
              
              3,943
              
              
              ≥
              
              
              4.00
              %
              
              5,914
              
              
              ≥
              
              
              6.00
              %Tier
                  1 Capital (to Average Assets)
              
              
              12,351
              
              
              10.81
              %
              
              4,571
              
              
              ≥
              
              
              4.00
              %
              
              5,714
              
              
              ≥
              
              
              5.00
              %




***Liquidity
      Management***




At
      June
      30, 2007 the Company (excluding the Bank) had approximately $656,000 in
      remaining cash proceeds of the initial public offering. These funds can be
      used
      for Company operations, investment and for later infusion into the Bank and
      other corporate activities. The primary source of liquidity for the Company
      will
      be dividends paid by the Bank. The Bank is currently restricted from paying
      dividends without regulatory approval, which will not be granted until the
      accumulated deficit has been eliminated.




The
      Bank’s liquidity is monitored by its staff, the Investment/Asset-Liability
      Committee and the Board of Directors, who review historical funding
      requirements, current liquidity position, sources and stability of funding,
      marketability of assets, options for attracting additional funds, and
      anticipated future funding needs, including the level of unfunded commitments.




The
      Bank’s primary sources of funds will be retail and commercial deposits, loan
      repayments, maturity of investment securities, other short-term borrowings,
      and
      other funds provided by operations. While scheduled loan repayments and maturing
      investments are relatively predictable, deposit flows and loan prepayments
      are
      more influenced by interest rates, general economic conditions, and competition.
      The Bank will maintain investments in liquid assets based upon management’s
      assessment of (1) the need for funds, (2) expected deposit flows, (3) yields
      available on short-term liquid assets, and (4) objectives of the asset/liability
      management program.




As
      loan
      demand increases, greater pressure will be exerted on the Bank’s liquidity.
      However, it is our intention to maintain a conservative loan to deposit ratio
      in
      the range of 70-80% over time. Given this goal, we will not aggressively pursue
      lending opportunities if sufficient funding sources are not available, nor
      will
      we seek to attract transient, volatile, non-local deposits with above market
      interest rates. As of June 30, 2007, the loan to deposit ratio was 82%.




The
      Bank
      had cash and cash equivalents of $27.4 million, or 19.5% of total Bank assets,
      at June 30, 2007. We believe that the Bank has adequate liquidity to meet
      anticipated future funding needs.




The
      Bank
      is subject to various regulatory capital requirements administered by federal
      banking agencies, which could affect its ability to pay dividends to the
      Company. Failure to meet minimum capital requirements can initiate certain
      mandatory and discretionary actions by regulators that, if undertaken, could
      have a direct material adverse effect on our financial statements. The minimum
      ratios required for the Bank to be considered “well capitalized” for regulatory
      purposes, and therefore eligible to consider the payment of dividends to the
      Company, will be 10% total capital to risk weighted assets, 6% tier 1 capital
      to
      risk weighted assets and 5% tier 1 capital to average assets. At June 30,
      2007, the Bank was considered “well capitalized” by regulatory standards;
      however, the bank is precluded from paying dividends due to its accumulated
      deficit.




26


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




Interest
      rate risk is the most significant market risk affecting the Bank. Other types
      of
      market risk, such as foreign currency risk and commodity price risk, do not
      arise in the normal course of our business activities. Interest rate risk can
      be
      defined as the exposure to a movement in interest rates that could have an
      adverse effect on our net interest income or the market value of our financial
      instruments. The ongoing monitoring and management of this risk is an important
      component of our asset and liability management process, which is governed
      by
      policies established by the Company’s Board of Directors and carried out by the
      Bank’s Investment/Asset-Liability Committee. The Investment/Asset-Liability
      Committee’s objectives are to manage our exposure to interest rate risk over
      both the one-year planning cycle and the longer term strategic horizon and,
      at
      the same time, to provide a stable and steadily increasing flow of net interest
      income.




Our
      primary measurement of interest rate risk is earnings at risk, which is
      determined through computerized simulation modeling. The primary simulation
      model assumes a static balance sheet, using the balances, rates, maturities
      and
      repricing characteristics of all of the Bank’s existing assets and liabilities.
      Net interest income is computed by the model assuming market rates remaining
      unchanged and compares those results to other interest rate scenarios with
      changes in the magnitude, timing and relationship among various interest rates.
      At June 30, 2007, we modeled rising ramp and declining interest rate simulations
      in 100 basis point increments spread ratably over four quarters. The impact
      of
      imbedded options in bank products was considered. Changes in net interest income
      in the rising and declining rate scenarios are then measured against the net
      interest income assuming the rates remain unchanged. The
      Investment/Asset-Liability Committee utilizes the results of the model to
      quantify the estimated exposure of net interest income to sustained interest
      rate changes.




In
      the
      June 30, 2007 simulation, our model indicated an exposure in the level of net
      interest income to rising rates for a 12-month period. The hypothetical rate
      scenarios consider an up or down change of 50, 100, 150, and 200 basis points
      during a 12-month period. At June 30, 2007, the net interest income at risk
      for
      year one in the 100 basis point falling rate scenario was calculated at $36,000,
      or .71% lower than the net interest income in the rates unchanged scenario,
      and
      $89,000, or 1.62%, lower than the net interest income in the rates unchanged
      scenario at the June 30, 2007 simulation with a 200 basis point decrease. These
      exposures are well within our policy guidelines of 20%. At June 30, 2007, the
      net interest income for year one in the 100 basis point rising rate scenario
      was
      calculated to be $38,000, or .69%, higher than the net interest income in the
      rates unchanged scenario, and $66,000, or 1.20%, higher than the net interest
      income in the rate unchanged scenario at the June 30, 2006 simulation with
      a 200
      basis point increase. Computation of prospective effects of hypothetical
      interest rate changes are based on numerous assumptions, including relative
      levels of market interest rates, loan and security prepayments, deposit run-offs
      and pricing and reinvestment strategies and should not be relied upon as
      indicative of actual results. Further, the computations do not contemplate
      any
      actions we may take in response to changes in interest rates. We cannot assure
      you that our actual net interest income would increase or decrease by the
      amounts computed by the simulations. The following table indicates the estimated
      impact on net interest income under various interest rate scenarios as of June
      30, 2007:


**Change
                  in Future Net Interest Income****as
                  of June 30, 2007****Dollar**
              
              **Percentage****Change**
              
              **Change**+200
                  basis points over one year
              
              $
              66,000
              
              
              1.20
              %+100
                  basis points over one year
              
              
              38,000
              
              
              0.69
              %-100
                  basis points over one year
              
              
              (39,000
              )
              
              -0.71
              %-200
                  basis points over one year
              
              
              (89,000
              )
              
              -1.62
              %


We
      also
      monitor the repricing terms of our assets and liabilities through gap matrix
      reports for the rates in unchanged, rising and falling interest rate scenarios.
      The reports illustrate, at designated time frames, the dollar amount of assets
      and liabilities maturing or repricing.




The
      following table sets forth, on a stand-alone basis, the Bank’s amounts of
      interest-earning assets and interest-bearing liabilities outstanding at June
      30,
      2007, which we anticipate, based upon certain assumptions, to reprice or mature
      in each of the future time periods shown. The projected repricing of assets
      and
      liabilities anticipates prepayments and scheduled rate adjustments, as well
      as
      contractual maturities under an interest rate unchanged scenario within the
      selected time intervals. While we believe such assumptions are reasonable,
      we
      cannot assure you that assumed repricing rates will approximate our actual
      future deposit activity.




27




**As
                  of June 30, 2007****Volumes
                  Subject to Repricing Within****0
                  - 1**
              
              **2
                  - 90**
              
              **91
                  - 364**
              
              **1
                  - 3**
              
              **Over
                  3**
              
              **Non-interest****Days**
              
              **Days**
              
              **Days**
              
              **Years**
              
              **Years**
              
              **Sensitive**
              
              **Total****Assets**Short-term
                  investments and federal fundssold
              
              $
              23,575
              
              $
              -
              
              $
              55
              
              $
              -
              
              $
              -
              
              $
              3,767
              
              $
              27,397Investment
                  securities
              
              
              -
              
              
              1,000
              
              
              -
              
              
              -
              
              
              498
              
              
              -
              
              
              1,498Loans
              
              
              46,272
              
              
              8,057
              
              
              20,385
              
              
              12,846
              
              
              22,795
              
              
              (1,308
              )
              
              109,047Fixed
                  and other assets
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              2,641
              
              
              2,641Total
                  earning assets
              
              $
              69,847
              
              $
              9,057
              
              $
              20,440
              
              $
              12,846
              
              $
              23,293
              
              $
              5,100
              
              $
              140,583**Liabilities
                  and Shareholders' Equity**Noninterest-bearing,
                  interest-bearingchecking,
                  savings and money marketaccounts
              
              $
              66,371
              
              $
              -
              
              $
              -
              
              $
              7,466
              
              $
              -
              
              $
              12,470
              
              $
              86,307Certificates
                  of deposit
              
              
              -
              
              
              7,495
              
              
              14,480
              
              
              2,405
              
              
              15,668
              
              
              -
              
              
              40,048Borrowed
                  funds
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Other
                  liabilities
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              503
              
              
              503Shareholders'
                  equity
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              13,725
              
              
              13,725Total
                  liabilities and shareholders' equity
              
              $
              66,371
              
              $
              7,495
              
              $
              14,480
              
              $
              9,871
              
              $
              15,668
              
              $
              26,698
              
              $
              140,583Period
                  gap
              
              
              3,476
              
              
              1,562
              
              
              5,960
              
              
              2,975
              
              
              7,625Cumulative
                  gap
              
              
              3,476
              
              
              5,038
              
              
              10,998
              
              
              13,973
              
              
              21,598Period
                  gap to total assets
              
              
              2
              %
              
              1
              %
              
              4
              %
              
              2
              %
              
              5
              %Cumulative
                  gap to total assets
              
              
              2
              %
              
              4
              %
              
              8
              %
              
              10
              %
              
              15
              %


Certain
      shortcomings are inherent in the method of analysis presented in the gap table.
      For example, although certain assets and liabilities may have similar maturities
      or periods of repricing, they may react in different degrees to changes in
      market interest rates. Additionally, certain assets, such as adjustable-rate
      loans, have features that restrict changes in interest rates, both on a
      short-term basis and over the life of the asset. More importantly, changes
      in
      interest rates, prepayments and early withdrawal levels may deviate
      significantly from those assumed in the calculations in the table. As a result
      of these shortcomings, we focus more on earnings at risk simulation modeling
      than on gap analysis. Even though the gap analysis reflects a ratio of
      cumulative gap to total assets within acceptable limits, the earnings at risk
      simulation modeling is considered by management to be more informative in
      forecasting future income at risk.




Finally,
      we also monitor core funding utilization in each interest rate scenario as
      well
      as market value of equity. These measures are used to evaluate long-term
      interest rate risk beyond the two-year planning horizon.




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




As
      of the end of the period covered by this Quarterly Report on Form 10-QSB for
      the
      quarter ended June 30, 2007, we carried out an evaluation, under the supervision
      and with the participation of our management, including our chief executive
      officer and chief financial officer, of the effectiveness of the design and
      operation of our “disclosure controls and procedures,” as such term is defined
      under Exchange Act Rules 13a-15(e) and 15d-15(e).




28


Based
      on
      this evaluation, our chief executive officer and chief financial officer
      concluded that, as of the end of the fiscal quarter covered by this report,
      such
      disclosure controls and procedures were reasonably designed to ensure that
      information required to be disclosed by us in the reports we file or submit
      under the Exchange Act is: (a) recorded, processed, summarized and reported
      within the time periods specified in the rules and forms of the Securities
      and
      Exchange Commission, and (b) accumulated and communicated to our management,
      including our chief executive officer and chief financial officer, as
      appropriate to allow timely decisions regarding required
      disclosure.




There
      were no changes in our internal controls over financial reporting during the
      quarter ended June 30, 2007 that materially affected, or were reasonably likely
      to materially affect, our internal controls over financial
      reporting.




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




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




There
      are
      no material pending legal proceedings to which the Company or the Bank is a
      party or to which any of our properties are subject; nor are there material
      proceedings known to the Company, in which any director, officer or affiliate
      or
      any principal shareholder is a party or has an interest adverse to the Company
      or the Bank.




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




None.




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




None.




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




There
      were two matters submitted to a vote of security holders during the three months
      ended June 30, 2007 at our annual meeting of shareholders held on June 13,
      2007.




*Proposal
      #1* — *Election
      of Board of Directors*




The
      shareholders approved the election of our board of directors comprised of the
      following individuals: Patrick G. Adams, Stanley Allred, Dan Basso, Frankie
      Basso, David Carstens, Ron Denheyer, Mark Foglietta, Hunter Hunt, Steven Jones,
      Eric Langford, Steven Lugar, Charles Mapes, Thomas McDougal, Daniel Meyer,
      Cyvia
      Noble, Anthony Pusateri, James Rose, and Gordon Youngblood with 1,073,329 votes
      cast in favor of the election of all eighteen board of directors. There were
      no
      votes against.




*Proposal
      #2* — *Amendment
      to the Articles of Incorporation for Name Change*




The
      shareholders approved the Amendment to the Articles of Incorporation for First
      Metroplex Capital, Inc. to change its name to T Bancshares, Inc. with 1,073,329
      votes cast in favor of the proposal, 250 against, and 500
      abstained.




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




None.




29




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




**Exhibit
                Number**
            
            **Description
                of Exhibit**3.1
            
            Amendment
                to Articles of Incorporation31.1
            
            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.




30


**SIGNATURES**




Pursuant
      to the requirements of the Securities Act of 1934, the registrant has duly
      caused this Report to be signed on its behalf by the undersigned, thereunto
      duly
      authorized.




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




31