| Texas                                                         |   | 71-0919962                          |
|---------------------------------------------------------------|--------|-------------------------------------|
| (State or other jurisdiction ofincorporation or organization) |   | (I.R.S. EmployerIdentification No.) |

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

----

|     |                                                                                        |   | PAGE |
|----------|---------------------------------------------------------------------------------------------|--------|------|
| PART I.  | FINANCIAL INFORMATION                                                                       |   | 3    |
| ITEM 1.  | Financial Statements                                                                        |   | 3    |
| ITEM 2.  | Management’s Discussion and Analysis of Financial Condition and Results of Operations |   | 22   |
| ITEM 3.  | Quantitative and Qualitative Disclosures about Market Risk                                  |   | 36   |
| ITEM 4.  | Controls and Procedures                                                                     |   | 36   |
| PART II. | OTHER INFORMATION                                                                           |   | 37   |
| ITEM 1.  | Legal Proceedings                                                                           |   | 37   |
| ITEM 6.  | Exhibits                                                                                    |   | 38   |

----

| (000's) except shares information                                                      |   | March 31,2011 |    |   | December 31,2010 |   |
|-------------------------------------------------------------------------------------------------------|--------|---------------|---------|--------|-----------------------|--------|
|                                                                                                  |   | (unaudited)   |    |   |                  |   |
|                                                                                                  |   |          |    |   |                  |   |
| ASSETS                                                                                                |   |          |    |   |                  |   |
|                                                                                                  |   |          |    |   |                  |   |
| Cash and due from banks                                                                               |   | $             | 1,398   |   |                  | $      | 2,142 |   |
| Interest-bearing deposits                                                                             |   |          | 3,709   |   |                  |   | 4,695 |   |
| Federal funds sold                                                                                    |   |          | 450     |   |                  |   | 3,352 |   |
| Total cash and cash equivalents                                                                       |   |          | 5,557   |   |                  |   | 10,189 |   |
|                                                                                                  |   |          |    |   |                  |   |   |   |
| Securities available for sale at estimated fair value                                                 |   |          | 5,837   |   |                  |   | 4,067 |   |
| Securities held to maturity at amortized cost                                                         |   |          | 607     |   |                  |   | 641 |   |
| Securities, restricted at cost                                                                        |   |          | 638     |   |                  |   | 1,181 |   |
| Loans, net of allowance for loan losses of $1,829 and $1,754, respectively                            |   |          | 90,847  |   |                  |   | 94,185 |   |
| Bank premises and equipment, net                                                                      |   |          | 485     |   |                  |   | 539 |   |
| Other real estate owned                                                                               |   |          | 2,233   |   |                  |   | 2,291 |   |
| Other assets                                                                                          |   |          | 2,036   |   |                  |   | 2,055 |   |
| Total assets                                                                                          |   | $             | 108,240 |   |                  | $      | 115,148 |   |
|                                                                                                  |   |          |    |   |                  |   |   |   |
| LIABILITIES                                                                                           |   |          |    |   |                  |   |   |   |
|                                                                                                  |   |          |    |   |                  |   |   |   |
| Demand Deposits:                                                                                      |   |          |    |   |                  |   |   |   |
| Noninterest-bearing                                                                                   |   | $             | 9,871   |   |                  | $      | 11,919 |   |
| Interest-bearing                                                                                      |   |          | 27,188  |   |                  |   | 28,975 |   |
| Time deposits $100 and over                                                                           |   |          | 43,450  |   |                  |   | 42,439 |   |
| Other time deposits                                                                                   |   |          | 11,856  |   |                  |   | 12,437 |   |
| Total deposits                                                                                        |   |          | 92,365  |   |                  |   | 95,770 |   |
|                                                                                                  |   |          |    |   |                  |   |   |   |
| Borrowed funds                                                                                        |   |          | 3,000   |   |                  |   | 6,000 |   |
| Other liabilities                                                                                     |   |          | 3,530   |   |                  |   | 2,241 |   |
| Total liabilities                                                                                     |   |          | 98,895  |   |                  |   | 104,011 |   |
|                                                                                                  |   |          |    |   |                  |   |   |   |
| SHAREHOLDERS’ EQUITY                                                                            |   |          |    |   |                  |   |   |   |
|                                                                                                  |   |          |    |   |                  |   |   |   |
| Common stock, $ 0.01 par value; 10,000,000 shares authorized; 1,941,305 shares issued and outstanding |   |          | 19      |   |                  |   | 19 |   |
| Additional paid-in capital                                                                            |   |          | 18,590  |   |                  |   | 18,580 |   |
| Retained deficit                                                                                      |   |          | (9,285  | )      |                  |   | (7,452 | ) |
| Accumulated other comprehensive income(loss)                                                          |   |          | 21      |   |                  |   | (10 | ) |
| Total shareholders' equity                                                                            |   |          | 9,345   |   |                  |   | 11,137 |   |
| Total liabilities and shareholders' equity                                                            |   | $             | 108,240 |   |                  | $      | 115,148 |   |

----

|  (000's) except earnings per share   |   | Three Months Ended March 31, |      |
|-------------------------------------------------------------------------|--------|--------------------------------------------------|-----------|
|                                                                    |   | 2011                                             |      |   | 2010 |   |
| Interest Income                                                         |   |                                             |      |   |   |   |
|                                                                    |   |                                             |      |   |   |   |
| Loan, including fees                                                    |   | $                                                | 1,768     |   |   | $ | 1,998 |   |
| Securities                                                              |   |                                             | 47        |   |   |   | 35 |   |
| Federal funds sold                                                      |   |                                             | 1         |   |   |   | - |   |
| Interest-bearing deposits                                               |   |                                             | 3         |   |   |   | 6 |   |
| Total interest income                                                   |   |                                             | 1,819     |   |   |   | 2,039 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Interest Expense                                                        |   |                                             |      |   |   |   |   |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Deposits                                                                |   |                                             | 575       |   |   |   | 718 |   |
| Borrowed funds                                                          |   |                                             | 4         |   |   |   | 5 |   |
| Total interest expense                                                  |   |                                             | 579       |   |   |   | 723 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Net interest income                                                     |   |                                             | 1,240     |   |   |   | 1,316 |   |
| Provision for loan losses                                               |   |                                             | 19        |   |   |   | 1,303 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Net interest income after provision for loan losses                     |   |                                             | 1,221     |   |   |   | 13 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Noninterest Income                                                      |   |                                             |      |   |   |   |   |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Trust income                                                            |   |                                             | 2,134     |   |   |   | 1,891 |   |
| Service fees                                                            |   |                                             | 81        |   |   |   | 39 |   |
| Total noninterest income                                                |   |                                             | 2,215     |   |   |   | 1,930 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Noninterest Expense                                                     |   |                                             |      |   |   |   |   |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Salaries and employee benefits                                          |   |                                             | 652       |   |   |   | 750 |   |
| Occupancy and equipment                                                 |   |                                             | 258       |   |   |   | 276 |   |
| Trust expenses                                                          |   |                                             | 1,819     |   |   |   | 1,606 |   |
| Professional fees                                                       |   |                                             | 122       |   |   |   | 250 |   |
| Data processing                                                         |   |                                             | 69        |   |   |   | 59 |   |
| Other                                                                   |   |                                             | 2,349     |   |   |   | 182 |   |
| Total noninterest expense                                               |   |                                             | 5,269     |   |   |   | 3,123 |   |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Net Loss                                                                |   | $                                                | (1,833    | ) |   | $ | (1,180 | ) |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Loss per common share:                                                  |   |                                             |      |   |   |   |   |   |
| Basic                                                                   |   | $                                                | (0.94     | ) |   | $  | (0.61 | ) |
| Diluted                                                                 |   | $                                           | (0.94     | ) |   | $ | (0.61 | ) |
|                                                                    |   |                                             |      |   |   |   |   |   |
| Weighted average common shares outstanding                              |   |                                             | 1,941,305 |   |   |   | 1,941,305 |   |
| Weighted average diluted shares outstanding                             |   |                                             | 1,941,305 |   |   |   | 1,941,305 |   |

----

| (000's)                                                     |   | CommonStock |   |   | AdditionalPaid-inCapital |   |   | RetainedDeficit |   |   | AccumulatedOtherComprehensiveIncome |   |   | Total  |   |
|-------------------------------------------------------------|--------|-------------|--------|--------|--------------------------|--------|--------|-----------------|--------|--------|-------------------------------------|--------|--------|--------|--------|
| BALANCE, January 1, 2010                                    |   | $           | 19     |   |                     | $      | 18,537 |            |   | $      | (6,982                              | )      |   | $      | 17     |   |   | $ | 11,591 |   |
|                                                        |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   |   |   |   |   |   |   |
| Comprehensive loss:                                         |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   |   |   |   |   |   |   |
| Net loss — YTD                                        |   |        |   |   |                     |   |   |            |   |   | (470                                | )      |   |   |   |   |   |   | (470 | ) |
| Change in accumulated gain on securities available for sale |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   | (27    | ) |   |   | (27 | ) |
| Total comprehensive loss                                    |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   |   |   |   |   | (497 | ) |
| Stock based compensation                                    |   |        |   |   |                     |   | 43     |            |   |   |                                |   |   |   |   |   |   |   | 43 |   |
| BALANCE, December 31, 2010                                  |   | $           | 19     |   |                     | $      | 18,580 |            |   | $      | (7,452                              | )      |   | $      | (10    | ) |   | $ | 11,137 |   |
|                                                        |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   |   |   |   |   |   |   |
| BALANCE, January 1, 2011                                    |   | $           | 19     |   |                     | $      | 18,580 |            |   | $      | (7,452                              | )      |   | $      | (10    | ) |   | $ | 11,137 |   |
|                                                        |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   |   |   |   |   |   |   |
| Comprehensive loss:                                         |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   |   |   |   |   |   |   |
| Net loss — YTD                                        |   |        |   |   |                     |   |   |            |   |   | (1,833                              | )      |   |   |   |   |   |   | (1,833 | ) |
| Change in accumulated gain on securities available for sale |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   | 31     |   |   |   | 31 |   |
| Total comprehensive loss                                    |   |        |   |   |                     |   |   |            |   |   |                                |   |   |   |   |   |   |   | (1,802 | ) |
| Stock based compensation                                    |   |        |   |   |                     |   | 10     |            |   |   |                                |   |   |   |   |   |   |   | 10 |   |
| BALANCE, March 31, 2011                                     |   | $           | 19     |   |                     | $      | 18,590 |            |   | $      | (9,285                              | )      |   | $      | 21     |   |   | $ | 9,345 |   |

----

|                                                                                             |   | Three Months Ended March 31, |   |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|
| (000's)                                                                                          |   | 2011                                        |   |   | 2010 |   |
| Cash Flows from Operating Activities                                                             |   |                                        |   |   |   |   |
| Net loss                                                                                         |   | $                                           | (1,833 | ) |   | $ | (1,180 | ) |
| Adjustments to reconcile net income(loss) to net cash provided by (used in) operating activities |   |                                        |   |   |   |   |   |   |
| Provision for loan losses                                                                        |   |                                        | 19     |   |   |   | 1,303 |   |
| Depreciation and amortization                                                                    |   |                                        | 68     |   |   |   | 84 |   |
| Net amortization of securities                                                                   |   |                                        | 15     |   |   |   | 18 |   |
| Impairment of other real estate owned                                                            |   |                                        | 58     |   |   |   | - |   |
| Stock based compensation                                                                         |   |                                        | 10     |   |   |   | 10 |   |
| Net change in other assets                                                                       |   |                                        | 19     |   |   |   | (24 | ) |
| Net change in other liabilities                                                                  |   |                                        | 1,289  |   |   |   |  (80 | ) |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Net cash provided by (used in) operating activities                                              |   |                                        | (355   | ) |   |   | 131 |   |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                                             |   |                                        |   |   |   |   |   |   |
| Principal payments and maturities of securities held to maturity                                 |   |                                        | 34     |   |   |   | 48 |   |
| Purchase of securities available for sale                                                        |   |                                        | (2,003 | ) |   |   | (1,000 | ) |
| Principal payments, calls and maturities of securities available for sale                        |   |                                        | 249    |   |   |   | 2,258 |   |
| Purchase of securities, restricted                                                               |   |                                        | -      |   |   |   | (1 | ) |
| Proceeds from sale of securities, restricted                                                     |   |                                        | 543    |   |   |   | - |   |
| Net change in loans                                                                              |   |                                        | 3,319  |   |   |   | (493 | ) |
| Purchases of premises and equipment                                                              |   |                                        | (14    | ) |   |   |  (14 | ) |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Net cash provided by investing activities                                                        |   |                                        | 2,128  |   |   |   | 798 |   |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                                             |   |                                        |   |   |   |   |   |   |
| Net change in demand deposits                                                                    |   |                                        | (3,835 | ) |   |   | (1,533 | ) |
| Net change in time deposits                                                                      |   |                                        | 430    |   |   |   | (6,112 | ) |
| Proceeds from borrowed funds                                                                     |   |                                        | -      |   |   |   | 16,000 |   |
| Repayment of borrowed funds                                                                      |   |                                        | (3,000 | ) |   |   | (13,000 | ) |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Net cash used in financing activities                                                            |   |                                        | (6,405 | ) |   |   |  (4,645 | ) |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Net change in cash and cash equivalents                                                          |   |                                        | (4,632 | ) |   |   | (3,716 | ) |
| Cash and cash equivalents at beginning of period                                                 |   |                                        | 10,189 |   |   |   |  7,292 |   |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Cash and cash equivalents at end of period                                                       |   | $                                           | 5,557  |   |   | $ | 3,576 |   |
|                                                                                             |   |                                        |   |   |   |   |   |   |
| Supplemental disclosures of cash flow information                                                |   |                                        |   |   |   |   |   |   |
| Cash paid during the period for                                                                  |   |                                        |   |   |   |   |   |   |
| Interest                                                                                         |   | $                                           | 550    |   |   | $ | 745 |   |
| Income taxes                                                                                     |   | $                                           | -      |   |   | $ | - |   |

----

----

| (000's)                          |   | March 31,2011 |   |   | December 31,2010 |   |
|----------------------------------|--------|---------------|--------|--------|-----------------------|--------|
| Commercial and industrial        |   | $             | 61,939 |   |                  | $      | 64,381 |   |
| Consumer installment             |   |          | 1,007  |   |                  |   | 1,002 |   |
| Real estate — mortgage     |   |          | 22,126 |   |                  |   | 22,377 |   |
| Real estate — construction |   |          | 7,720  |   |                  |   | 8,309 |   |
| Other                            |   |          | -      |   |                  |   | 6 |   |
|                             |   |          |   |   |                  |   |   |   |
| Total loans                      |   |          | 92,792 |   |                  |   | 96,075 |   |
|                             |   |          |   |   |                  |   |   |   |
| Less allowance for loan losses   |   |          | 1,829  |   |                  |   | 1,754 |   |
| Less deferred loan fees          |   |          | 116    |   |                  |   | 136 |   |
|                             |   |          |   |   |                  |   |   |   |
| Net loans                        |   | $             | 90,847 |   |                  | $      | 94,185 |   |

|                                      |   | Three Months Ended March 31, |   |
|-------------------------------------------|--------|------------------------------|--------|
| (000's)                                   |   | 2011                         |   |   | 2010 |   |
| Balance at beginning of period            |   | $                            | 1,754  |   |   | $ | 1,713 |   |
|                                      |   |                         |   |   |   |   |   |   |
| Charge-offs:                              |   |                         |   |   |   |   |   |   |
| Commercial and industrial                 |   |                         | -      |   |   |   | 1,060 |   |
| Consumer installment                      |   |                         | -      |   |   |   | - |   |
| Real estate – construction and land |   |                         | -      |   |   |   | 30 |   |
|                                      |   |                         |   |   |   |   |
| Total charge-offs                         |   |                         | -      |   |   |   | 1,090 |   |
|                                      |   |                         |   |   |   |   |   |   |
| Recoveries:                               |   |                         |   |   |   |   |   |   |
| Commercial and industrial                 |   |                         | 6      |   |   |   | 30 |   |
| Consumer installment                      |   |                         | -      |   |   |   | - |   |
| Real estate – construction and land |   |                         | 50     |   |   |   | - |   |
|                                      |   |                         |   |   |   |   |
| Total recoveries                          |   |                         | 56     |   |   |   | 30 |   |
|                                      |   |                         |   |   |   |   |
|                                      |   |                         |   |   |   |   |   |   |
| Net charge-offs                           |   |                         | (56    | )  |   |   | (1,060 | ) |
|                                      |   |                         |   |   |   |   |   |   |
| Provision for loan losses                 |   |                         | 19     |   |   |   | 1,303 |   |
|                                      |   |                         |   |   |   |   |
| Balance at end of period                  |   | $                            | 1,829  |   |   | $ | 1,956 |   |

----

|                                      |   | Unpaid      |   |   | Recorded     |   |   | Recorded   |   |   |       |   |   |      |   |   |       |    |   |
|-------------------------------------------|--------|-------------|--------|--------|--------------|--------|--------|------------|--------|--------|------------|--------|--------|-----------|--------|--------|------------|---------|--------|
|                                      |   | Contractual |   |   | Investment   |   |   | Investment |   |   | Total      |   |   |      |   |   |       | Average |   |
|                                      |   | Principal   |   |   | With No |   |   | With       |   |   | Recorded   |   |   | Related   |   |   | Recorded   |    |
| (000's)                                   |   | Balance     |   |   | Allowance    |   |   | Allowance  |   |   | Investment |   |   | Allowance |   |   | Investment |    |
| March 31, 2011                            |   |        |   |   |         |   |   |       |   |   |       |   |   |      |   |   |       |    |   |   |   |   |   |   |
| Commercial and industrial                 |   | $           | 2,642  |   |         | $      | 1,130  |       |   | $      | 1,492      |   |   | $         | 2,622  |   |       | $       | 369    |   |   | $ | 2,635 |   |
| Consumer installment                      |   |        | -      |   |         |   | -      |       |   |   | -          |   |   |      | -      |   |       |    | -      |   |   |   | - |   |
| Real estate – mortgage              |   |        | -      |   |         |   | -      |       |   |   | -          |   |   |      | -      |   |       |    | -      |   |   |   | 964 |   |
| Real estate – construction and land |   |        | -      |   |         |   | -      |       |   |   | -          |   |   |      | -      |   |       |    | -      |   |   |   | - |   |
| Other                                     |   |        | -      |   |         |   | -      |       |   |   | -          |   |   |      | -      |   |       |    | -      |   |   |   | - |   |
| Total                                     |   | $           | 2,642  |   |         | $      | 1,130  |       |   | $      | 1,492      |   |   | $         | 2,622  |   |       | $       | 369    |   |   | $ | 3,599 |   |

| December 31, 2010                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Commercial and industrial                 |   | $      | 2,672  |   |   | $      | 1,139  |   |   | $      | 1,517  |   |   | $      | 2,656  |   |   | $      | 255    |   |   | $      | 2,529  |   |
| Consumer installment                      |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |
| Real estate – mortgage              |   |   | 1,534  |   |   |   | 1,461  |   |   |   | -      |   |   |   | 1,461  |   |   |   | -      |   |   |   | 1,521  |   |
| Real estate – construction and land |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 774    |   |
| Other                                     |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | -      |   |
| Total                                     |   | $      | 4,206  |   |   | $      | 2,600  |   |   | $      | 1,517  |   |   | $      | 4,117  |   |   | $      | 255    |   |   | $      | 4,824  |   |

|                                      |   |   |   |   |    | Special |   |        |   |   |     |   |   |   |   |   |
|-------------------------------------------|--------|--------|--------|--------|---------|---------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|--------|
| (000's)                                   |   | Pass   |   |   | Mention |    |   | Substandard |   |   | Doubtful |   |   | Total  |   |
| March 31, 2011                            |   |   |   |   |    |    |   |        |   |   |     |   |   |   |   |   |   |   |   |   |
| Commercial and industrial                 |   | $      | 58,883 |   |    | $       | 1,227  |        |   | $      | 1,582    |   |   | $      | 247    |   |   | $ | 61,939 |   |
| Consumer installment                      |   |   | 1,007  |   |    |    | -      |        |   |   | -        |   |   |   | -      |   |   |   | 1,007 |   |
| Real estate - mortgage                    |   |   | 17,406 |   |    |    | 951    |        |   |   | 3,769    |   |   |   | -      |   |   |   | 22,126 |   |
| Real estate – construction and land |   |   | 6,321  |   |    |    | 1,399  |        |   |   | -        |   |   |   | -      |   |   |   | 7,720 |   |
| Other                                     |   |   | -      |   |    |    | -      |        |   |   | -        |   |   |   | -      |   |   |   | - |   |
| Total                                     |   | $      | 83,617 |   |    | $       | 3,577  |        |   | $      | 5,351    |   |   | $      | 247    |   |   | $ | 92,792 |   |

| Commercial and industrial                 |   | $      | 61,273 |   |   | $      | 1,261 |   |   | $      | 1,847 |   |   | $      | - |   |   | $      | 64,381 |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|-------|--------|--------|--------|-------|--------|--------|--------|---|--------|--------|--------|--------|--------|
| Consumer installment                      |   |   | 1,002  |   |   |   | -     |   |   |   | -     |   |   |   | - |   |   |   | 1,002  |   |
| Real estate - mortgage                    |   |   | 17,706 |   |   |   | 958   |   |   |   | 3,713 |   |   |   | - |   |   |   | 22,377 |   |
| Real estate – construction and land |   |   | 6,900  |   |   |   | 1,048 |   |   |   | 361   |   |   |   | - |   |   |   | 8,309  |   |
| Other                                     |   |   | 6      |   |   |   | -     |   |   |   | -     |   |   |   | - |   |   |   | 6      |   |
| Total                                     |   | $      | 86,887 |   |   | $      | 3,267 |   |   | $      | 5,921 |   |   | $      | - |   |   | $      | 96,075 |   |

----

|                                                 |   |            |   |   |              |   |   |          |   |   |    |   |   |   |   |   | Total 90           |   |
|------------------------------------------------------|--------|-----------------|--------|--------|-------------------|--------|--------|---------------|--------|--------|---------|--------|--------|--------|--------|--------|-------------------------|--------|
|                                                 |   | 30-89 Days |   |   | Greater Than |   |   | Total         |   |   | Total   |   |   | Total  |   |   | Days Past Due |   |
| (000's)                                              |   | Past Due   |   |   | 90 Days      |   |   | Past Due |   |   | Current |   |   | Loans  |   |   | Still Accruing     |   |
| March 31, 2011                                       |   |            |   |   |              |   |   |          |   |   |    |   |   |   |   |   |                    |   |
| Commercial and industrial                            |   | $               | -      |   |              | $      | -      |          |   | $      | -       |   |   | $      | 61,939 |   |                    | $      | 61,939 |   |   | $ | - |   |
| Consumer installment                                 |   |            | -      |   |              |   | -      |          |   |   | -       |   |   |   | 1,007  |   |                    |   | 1,007 |   |   |   | - |   |
| Real estate – mortgage                         |   |            | -      |   |              |   | -      |          |   |   | -       |   |   |   | 22,126 |   |                    |   | 22,126 |   |   |   | - |   |
| Real estate – construction and  land |   |            | -      |   |              |   | -      |          |   |   | -       |   |   |   | 7,720  |   |                    |   | 7,720 |   |   |   | - |   |
| Other                                                |   |            | -      |   |              |   | -      |          |   |   | -       |   |   |   | -      |   |                    |   | - |   |   |   | - |   |
| Total                                                |   | $               | -      |   |              | $      | -      |          |   | $      | -       |   |   | $      | 92,792 |   |                    | $      | 92,792 |   |   | $ | - |   |

| December 31, 2010                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Commercial and industrial                            |   | $      | -      |   |   | $      | -      |   |   | $      | -      |   |   | $      | 64,381 |   |   | $      | 64,381 |   |   | $ | - |   |
| Consumer installment                                 |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 1,002  |   |   |   | 1,002 |   |   |   | - |   |
| Real estate – mortgage                         |   |   | -      |   |   |   | 1,461  |   |   |   | 1,461  |   |   |   | 20,916 |   |   |   | 22,377 |   |   |   | - |   |
| Real estate – construction and  land |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 8,309  |   |   |   | 8,309 |   |   |   | - |   |
| Other                                                |   |   | -      |   |   |   | -      |   |   |   | -      |   |   |   | 6      |   |   |   | 6 |   |   |   | - |   |
| Total                                                |   | $      | -      |   |   | $      | 1,461  |   |   | $      | 1,461  |   |   | $      | 94,614 |   |   | $      | 96,075 |   |   | $ | - |   |

----

|                           |   | March 31, 2011 |   |
|--------------------------------|--------|---------------------|--------|
| (000's)                        |   | AmortizedCost       |   |   | UnrealizedGains |   |   | UnrealizedLosses |   |   | EstimatedFair Value |   |
| Securities Available for Sale: |   |                |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies       |   | $                   | 5,816  |   |   | $ | 50 |   |   | $ | 29 |   |   | $ | 5,837 |   |
|                           |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held to Maturity:   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies       |   | $                   | 607    |   |   | $ | 45 |   |   | $ | - |   |   | $ | 652 |   |
|                           |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities, restricted         |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                          |   | $                   | 638    |   |   | $ | - |   |   | $ | - |   |   | $ | 638 |   |

|                      |   | December 31, 2010 |   |
|--------------------------------|--------|-----------------------------|--------|
| (000's)                        |   | AmortizedCost               |   |   | GrossUnrealizedGains |   |   | GrossUnrealizedLosses |   |   | EstimatedFair Value |   |
| Securities Available for Sale: |   |                        |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies       |   | $                           | 4,077  |   |   | $ | 40 |   |   | $ | 50 |   |   | $ | 4,067 |   |
|                           |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities Held to Maturity:   |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. Government Agencies       |   | $                           | 641    |   |   | $ | 41 |   |   | $ | - |   |   | $ | 682 |   |
|                           |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Securities, restricted         |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                          |   | $                           | 1,181  |   |   | $ | - |   |   | $ | - |   |   | $ | 1,181 |   |

|                                   |   | Held to Maturity |    |   | Available for Sale |   |
|----------------------------------------|--------|----------------------------|---------|--------|------------------------------|--------|
| (000's)                                |   | AmortizedCost              |    |   | EstimatedFair Value     |   |   | AmortizedCost |   |   | EstimatedFair Value |   |
|                                   |   |                       |    |   |                         |   |   |   |   |   |   |   |
| Due in one year or less                |   | $                          | -  |   |                         | $      | -  |   |   | $ | -  |   |   | $ | -  |   |
| Due after one year through five years: |   |                       | -  |   |                         |   | -  |   |   |   | -  |   |   |   | -  |   |
| Due after five years through ten years |   |                       | -  |   |                         |   | -  |   |   |   | 2,002  |   |   |   | 1,999  |   |
| Due after ten years                    |   |                       | -  |   |                         |   | -  |   |   |   | -  |   |   |   | -  |   |
| Mortgage-backed securities             |   |                       | 607     |   |                         |   | 652 |   |   |   | 3,814 |   |   |   | 3,838 |   |
|                                   |   |                       |    |   |                         |   |   |   |   |   |   |   |   |   |   |   |
| Total                                  |   | $                          | 607     |   |                         | $      | 652 |   |   | $ | 5,816 |   |   | $ | 5,837 |   |

----

| (000's)                        |   | March 31,2011 |        |   | December 31,2010 |   |
|--------------------------------|--------|---------------|-------------|--------|-----------------------|--------|
| Leasehold improvements         |   | $             | 929         |   |                  | $      | 929 |   |
| Furniture and equipment        |   |          |  1,920 |   |                  |   | 1,907 |   |
|                           |   |          | 2,849       |   |                  |   | 2,836 |   |
| Less: accumulated depreciation |   |          | 2,364       |   |                  |   | 2,297 |   |
| Balance at end of period       |   | $             | 485         |   |                  | $      | 539 |   |

----

| (000's)                                |   | March 31,2011 |   |   | December 31,2010 |   |
|----------------------------------------|--------|---------------|--------|--------|-----------------------|--------|
| Prepaid assets                         |   |          | 945    |   |                  |   | 1,015 |   |
| Accounts receivable – trust fees |   |          | 745    |   |                  |   | 680 |   |
| Accrued interest receivable            |   |          | 313    |   |                  |   | 330 |   |
| Other                                  |   |          | 33     |   |                  |   | 30 |   |
|  Total                            |   | $             | 2,036  |   |                  | $      | 2,055 |   |

| (000's)                                       |   | As of March 31, 2011 |         |   | As of December 31, 2010 |   |
|-----------------------------------------------|--------|-------------------------------------|--------------|--------|---------------------------------------------|--------|
| Noninterest bearing demand                    |   | $                                   | 9,871        |   |                                        |   | 11 | % |   | $ | 11,919 |   |   |   | 13 | % |
| Interest bearing demand (NOW)                 |   |                                | 6,591        |   |                                        |   | 7 |   |   |   | 2,130 |   |   |   | 2 |   |
| Money market accounts                         |   |                                | 20,344       |   |                                        |   | 22 |   |   |   | 26,671 |   |   |   | 28 |   |
| Savings accounts                              |   |                                | 253          |   |                                        |   | 0 |   |   |   | 174 |   |   |   | 0 |   |
| Certificates of deposit, $100,000 and greater |   |                                | 43,450       |   |                                        |   | 47 |   |   |   | 12,437 |   |   |   | 13 |   |
| Certificates of deposit, less than $100,000   |   |                                |  11,856 |   |                                        |   | 13 |   |   |   | 42,439 |   |   |   | 44 |   |
|                                          |   | $                                   | 92,365       |   |                                        |   | 100 | % |   | $ | 95,770 |   |   |   | 100 | % |

| (000’s) |   |   |   |
|---------------|--------|--------|--------|
| 2011          |   |   | $      | 35,021 |
| 2012          |   |   |   | 16,546 |
| 2013          |   |   |   | 2,637 |
| 2014          |   |   |   | 532 |
| 2015          |   |   |   | 336 |
| 2016          |   |   |   | 234 |
| Total         |   |   | $      | 55,306 |

----

| (000's)                        |   | March 31,2011 |   |   | December 31,2010 |   |
|--------------------------------|--------|---------------|--------|--------|-----------------------|--------|
| Federal Home Loan Bank Advance |   | $             | 3,000  |   |                  | $      | 6,000 |   |

| (000's)                                       |   | March 31,2011 |     |   | December 31,2010 |   |
|-----------------------------------------------|--------|---------------|----------|--------|-----------------------|--------|
| Reserve for Trust Investment Funds adjustment |   | $             | 2,100    |   |                  | $      | - |   |
| Reserve for consumer restitution              |   |          | 108      |   |                  |   | 963 |   |
| Trust advisor fees payable                    |   |          | 932      |   |                  |   | 576 |   |
| Interest payable                              |   |          | 106      |   |                  |   | 77 |   |
| Audit fees                                    |   |          | 161      |   |                  |   | 121 |   |
| Incentive compensation                        |   |          | 36       |   |                  |   | 107 |   |
| Legal                                         |   |          | 7        |   |                  |   | 10 |   |
| Franchise & property taxes                |   |          | 32       |   |                  |   | 100 |   |
| Other accruals                                |   |          |  48 |   |                  |   |  287 |   |
|                                          |   | $             | 3,530    |   |                  | $      | 2,241 |   |

----

|                              |   | Number ofSharesUnderlyingOptions |    |   | WeightedAverageExercisePrices |   |
|----------------------------------------|--------|---------------------------------------|---------|--------|-------------------------------|--------|
|                                   |   |                                  |    |   |                          |   |
| Outstanding at beginning of the period |   |                                  | 212,500 |   |                          | $      | 9.14 |   |
| Granted                                |   |                                  | -       |   |                          |   | - |   |
| Exercised                              |   |                                  | -       |   |                          |   | - |   |
| Expired / forfeited                    |   |                                  | -       |   |                          |   | - |   |
|                                   |   |                                  |    |   |                          |   |   |   |
| Outstanding at end of period           |   |                                  | 212,500 |   |                          | $      | 9.14 |   |
| Exercisable at end of period           |   |                                  | 168,300 |   |                          | $      | 10.22 |   |
| Available for grant at end of period   |   |                                  | 36,500  |   |                          |   |   |   |

|                    |   | Shares |   |   | WeightedAverageGrant DateFair Value |   |
|------------------------------|--------|--------|--------|--------|-----------------------------------------------|--------|
|                         |   |   |   |   |                                          |   |
| Nonvested at January 1, 2011 |   |   | 47,700 |   |                                          | $      | 2.10 |   |
| Granted                      |   |   | -      |   |                                          |   | - |   |
| Vested                       |   |   | 3,500  |   |                                          |   | 2.39 |   |
| Forfeited                    |   |   | -      |   |                                          |   | - |   |
|                         |   |   |   |   |                                          |   |   |   |
| Nonvested at March 31, 2011  |   |   | 44,200 |   |                                          | $      | 2.07 |   |

----

|   | · | deposit $5.1 million for consumer restitution charged by the merchants to eligible consumers into a segregated account at the Bank;                                                               |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | require the Bank to retain an independent claims administrator to locate and arrange for the issuance of individual consumer checks to the identified eligible consumers;                              |
|   | · | require the Bank to establish a capital plan which, among other provisions, details the Bank’s plan to achieve tier 1 capital ratio of 9% and total risk based capital ratio of 11.5%;           |
|   | · | require the Bank to develop a written program designed to reduce the level of criticized assets;                                                                                                       |
|   | · | require the Bank to develop and implement an asset liquidity enhancement plan designed to increase the amount of asset liquidity maintained by the Bank, including a loan to deposit ratio of 85%; and |
|   | · | require the Bank to develop a written profit plan to improve and sustain the earnings of the Bank.                                                                                                     |

----

----

| (000's)                                  |   | Actual |   |   | For CapitalAdequacy Purposes |   |   | To Be Well CapitalizedUnder PromptCorrective ActionProvisions |   |
|------------------------------------------|--------|--------|--------|--------|------------------------------|--------|--------|---------------------------------------------------------------|--------|
|                                     |   | Amount |   |   | Ratio                        |   |   | Amount                                                        |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
|                                     |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| As of March 31, 2011                     |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to Risk Weighted Assets)  |   | $      | 12,390 |   |                         |   | 10.75  | %                                                             |   | $ | 7,655 | > |   |   | 8.00 | % |   | $ | 9,569 | > |   |   | 10.00 | % |
|                                     |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Risk Weighted Assets) |   |   | 11,186 |   |                         |   | 9.50   | %                                                             |   |   | 3,827 | > |   |   | 4.00 | % |   |   | 5,741 | > |   |   | 6.00 | % |
|                                     |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Average Assets)       |   |   | 11,186 |   |                         |   | 8.07   | %                                                             |   |   | 4,504 | > |   |   | 4.00 | % |   |   | 5,631 | > |   |   | 5.00 | % |
|                                     |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2010                  |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to Risk Weighted Assets)  |   | $      | 12,156 |   |                         |   | 12.20  | %                                                             |   | $ | 7,973 | > |   |   | 8.00 | % |   | $ | 9,966 | > |   |   | 10.00 | % |
|                                     |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Risk Weighted Assets) |   |   | 10,904 |   |                         |   | 10.94  | %                                                             |   |   | 3,986 | > |   |   | 4.00 | % |   |   | 5,979 | > |   |   | 6.00 | % |
|                                     |   |   |   |   |                         |   |   |                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Average Assets)       |   |   | 10,904 |   |                         |   | 9.41   | %                                                             |   |   | 4,635 | > |   |   | 4.00 | % |   |   | 5,793 | > |   |   | 5.00 | % |

----

| (000's)                       |   | March 31,2011 |        |   | December 31,2010 |   |
|-------------------------------|--------|---------------|-------------|--------|-----------------------|--------|
| ASSETS                        |   |          |        |   |                  |   |
| Cash and due from banks       |   | $             | 239         |   |                  | $      | 256 |   |
| Investment in subsidiary      |   |          |  9,107 |   |                  |   |  10,894 |   |
|                          |   |          |        |   |                  |   |   |   |
| Total Assets                  |   | $             | 9,346       |   |                  | $      | 11,150 |   |
|                          |   |          |        |   |                  |   |   |   |
| LIABILITIES AND CAPITAL       |   |          |        |   |                  |   |   |   |
| Other Liabilities             |   | $             | 1           |   |                  | $      | 13 |   |
| Capital                       |   |          | 9,345       |   |                  |   |  11,137 |   |
|                          |   |          |        |   |                  |   |   |   |
| Total Liabilities and Capital |   | $             | 9,346       |   |                  | $      | 11,150 |   |

|                            |   | Three Months Ended March 31, |   |
|---------------------------------|--------|---------------------------------------------|--------|
| (000's)                         |   | 2011                                        |   |   | 2010 |   |
| Equity in loss from subsidiary  |   | $                                           | (1,818 | ) |   | $ | (1,160 | ) |
|                            |   |                                        |   |   |   |   |   |   |
| Noninterest expense:            |   |                                        |   |   |   |   |   |   |
| Professional and administrative |   |                                        | 5      |   |   |   | 10 |   |
| Stock based compensation        |   |                                        | 10     |   |   |   | 10 |   |
| Total noninterest expenses      |   |                                        | 15     |   |   |   | 20 |   |
|                            |   |                                        |   |   |   |   |   |   |
| Net loss                        |   | $                                           | (1,833 | ) |   | $ | (1,180 | ) |

----

|                                                                           |   | Three Months Ended March 31, |   |
|-------------------------------------------------------------------------------------|--------|---------------------------------------------|--------|
| (000's)                                                                             |   | 2011                                        |   |   | 2010 |   |
| Cash Flows from Operating Activities                                                |   |                                        |   |   |   |   |
| Net loss                                                                            |   | $                                           | (1,833 | ) |   | $ | (1,180 | ) |
| Adjustments to reconcile net income(loss) to net cash used by operating activities: |   |                                        |   |   |   |   |   |   |
| Equity in loss of Bank                                                              |   |                                        | 1,818  |   |   |   | 1,160 |   |
| Stock based compensation                                                            |   |                                        | 10     |   |   |   | 10 |   |
| Net change in other assets                                                          |   |                                        | -      |   |   |   | - |   |
| Net change in other liabilities                                                     |   |                                        | (12    | ) |   |   | (35 | ) |
| Net cash used by operating activities                                               |   |                                        | (17    | )  |   |   | (45 | ) |
|                                                                                |   |                                        |   |   |   |   |   |   |
| Cash Flows from Investing Activities                                                |   |                                        | -      |   |   |   | -  |   |
|                                                                                |   |                                        |   |   |   |   |   |   |
| Cash Flows from Financing Activities                                                |   |                                        | -      |   |   |   | - |   |
|                                                                                |   |                                        |   |   |   |   |   |   |
| Net change in cash and cash equivalents                                             |   |                                        | (17    | )  |   |   | (45 | ) |
| Cash and cash equivalents at beginning of period                                    |   |                                        | 256    |   |   |   |  367 |   |
|                                                                                |   |                                        |   |   |   |   |   |   |
| Cash and cash equivalents at end of period                                          |   | $                                           | 239    |   |   | $ | 322 |   |
|                                                                                |   |                                        |   |   |   |   |   |   |
| Supplemental disclosures of cash flow information                                   |   |                                        |   |   |   |   |   |   |
| Cash paid during the period for                                                     |   |                                        |   |   |   |   |   |   |
| Interest                                                                            |   | $                                           | -      |   |   | $ | - |   |
| Income taxes                                                                        |   | $                                           | -      |   |   | $ | - |   |

|   | · | Level 1 Inputs - Unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Level 2 Inputs - Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Level 3 Inputs - Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (000's)                                   |   | Level 1Inputs |    |   | Level 2Inputs |   |   | Level 3Inputs |   |   | TotalFair Value |   |
|-------------------------------------------|--------|---------------|---------|--------|---------------|--------|--------|---------------|--------|--------|-----------------|--------|
| As of March 31, 2011                      |   |          |    |   |          |   |   |          |   |   |            |   |
| Securities available for sale:            |   |          |    |   |          |   |   |          |   |   |            |   |
| U.S. government agencies                  |   | $             | — |   |          | $      | 5,837  |          |   | $      | —         |   |   | $ | 5,837 |   |
| Other Assets:                             |   |          |    |   |          |   |   |          |   |   |            |   |   |   |   |   |
| OREO                                      |   |          | — |   |          |   | 2,233  |          |   |   | —         |   |   |   | 2,233 |   |
|                                      |   |          |    |   |          |   |   |          |   |   |            |   |   |   |   |   |
| As of December 31, 2010                   |   |          |    |   |          |   |   |          |   |   |            |   |   |   |   |   |
| Securities available for sale:            |   |          |    |   |          |   |   |          |   |   |            |   |   |   |   |   |
| U.S. government agencies and corporations |   | $             | — |   |          | $      | 4,067  |          |   | $      | —         |   |   | $ | 4,067 |   |
| Other Assets:                             |   |          |    |   |          |   |   |          |   |   |            |   |   |   |   |   |
| OREO                                      |   |          | — |   |          |   | 2,291  |          |   |   | —         |   |   |   | 2,291 |   |

|                          |   | March 31, 2011 |   |   | December 31, 2010 |   |
|-------------------------------|--------|---------------------|--------|--------|-----------------------------|--------|
|                          |   | CarryingAmount      |   |   | EstimatedFair Value    |   |   | CarryingAmount |   |   | EstimatedFair Value |   |
| Financial assets              |   |                |   |   |                        |   |   |   |   |   |   |   |
| Cash and cash equivalents     |   | $                   | 5,557  |   |                        | $      | 5,557 |   |   | $ | 10,189 |   |   | $ | 10,189 |   |
| Securities available for sale |   |                | 5,837  |   |                        |   | 5,837 |   |   |   | 4,067 |   |   |   | 4,067 |   |
| Loans, net                    |   |                | 90,847 |   |                        |   | 92,206 |   |   |   | 94,185 |   |   |   | 94,305 |   |
| Accrued interest receivable   |   |                | 313    |   |                        |   | 313 |   |   |   | 330 |   |   |   | 330 |   |
|                          |   |                |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities         |   |                |   |   |                        |   |   |   |   |   |   |   |   |   |   |   |
| Deposits                      |   |                | 92,365 |   |                        |   | 94,227 |   |   |   | 95,770 |   |   |   | 97,717 |   |
| Accrued interest payable      |   |                | 106    |   |                        |   | 106 |   |   |   | 77 |   |   |   | 77 |   |

----

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

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

|   | · | we are subject to significant government regulation and legislation that increases the cost of doing business and inhibits our ability to compete including the potential impact of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Basel III; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | if we fail to retain our trust customers our non-interest income could be adversely affected; |
|--------|--------|-----------------------------------------------------------------------------------------------|

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

|   | · | the Bank’s methodology with respect to reconciling the variance and over-accrual may be challenged by our trust customers, which could in turn adversely affect our financial performance; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | we have a significant dental industry loan concentration in which economic or regulatory changes could adversely affect the ability of those customers to fulfill their loan obligations; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | if we fail to adequately address formal administrative actions with the Comptroller, including, without limitation, the Agreement, this may have an adverse impact on the Company’s operating results or financial condition; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

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

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

----

|                                     |   | Three Months Ended March 31, 2011 Compared to Three Months Ended March 31, 2010 |   |
|------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|
|                                     |   | Increase (Decrease) Due toChange in                                                                      |   |   |   |   |
| (000’s)                            |   | Yield/Rate                                                                                                                   |   |   | AverageVolume |   |   | Number ofDays |   |   | Total |   |
| Federal Funds Sold                       |   | $                                                                                                                            | -      |   |   | $ | 1 |   |   | $ | - |   |   | $ | 1 |   |
| Securities and other                     |   |                                                                                                                         | 17     |   |   |   | (8 | )  |   |   | - |   |   |   | 9 |   |
| Loans, net of reserve (1)                |   |                                                                                                                         | 344    |   |   |   | (574 | ) |   |   | - |   |   |   | (230 | ) |
|                                     |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total earning assets                     |   |                                                                                                                         | 361    |   |   |   | (581 | ) |   |   | - |   |   |   | (220 | ) |
|                                     |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW                                      |   |                                                                                                                         | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Money Market                             |   |                                                                                                                         | (9     | ) |   |   | (40 | ) |   |   |   |   |   |   | (49 | ) |
| Certificates of deposit $100,000 or less |   |                                                                                                                         | (18    | ) |   |   | (30 | ) |   |   | - |   |   |   | (48 | ) |
| Certificates of deposit $100,000 or more |   |                                                                                                                         | (33    | ) |   |   | (13 | )  |   |   | - |   |   |   | (46 | ) |
| Borrowed Funds                           |   |                                                                                                                         | 4      |   |   |   | (5 | ) |   |   | - |   |   |   | (1 | ) |
|                                     |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total interest-bearing liabilities       |   |                                                                                                                         | (56    | ) |   |   | (88 | ) |   |   | - |   |   |   | (144 | ) |
|                                     |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Changes in net interest income           |   | $                                                                                                                            | 417    |   |   | $ | (493 | ) |   | $ | - |   |   | $ | (76 | ) |

----

|   | · | total assets was $108.2 million at the end of the first quarter of 2011, representing a decrease of $6.9 million, or 6.0%, from $115.1 million at the end of 2010; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | total loans, net of allowance for loan losses, decreased to $90.8 million at the end of the first quarter of 2011, representing a decrease of $3.4 million, or 3.5%, from $94.2 million at the end of 2010; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | total deposits decreased to $92.4 million at the end of the first quarter of 2011, representing a decrease of $3.4 million, or 3.6%, from $95.8 million at the end of 2010; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · | net loss was $1.8 million for the three months ended March 31, 2011, compared to net loss of $1.2 million for the same period in the prior year. The Bank recorded a reserve of $2.1 million to correct the value of participants’ investments in certain collective investment funds administered by the Bank’s trust department (See “Part I.ITEM 4.Controls and Procedures”). |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | total revenue was $4.0 million for the three months ended March 31, 2011, unchanged from the same period in the prior year. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | Tier 1 capital to average assets and total capital ratios were 8.07% and 10.75% compared to 9.41% and 12.20% at December 31, 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                  |   | Three Months Ended March 31, |    |
|-------------------------------------------------------|--------|---------------------------------------------|---------|
|                                                  |   | 2011                                        |    |   | 2010 |   |
| (000's) except earnings per share |   | AverageBalance                              |    |   | Income/Expense |   |   | AverageYield |   |   | AverageBalance |   |   | Income/Expense |   |   | AverageYield |   |
| Interest-earning assets                               |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                  |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans, net of reserve(1)                              |   | $                                           | 92,952  |   |   | $ | 1,768 |   |   |   | 7.6 | % |   | $ | 123,107 |   |   | $ | 1,998 |   |   |   | 6.5 | % |
| Federal funds sold                                    |   |                                        | 2,281   |   |   |   | 1 |   |   |   | 0.2 | % |   |   | 634 |   |   |   | - |   |   |   | 0.2 | % |
| Securities and other                                  |   |                                        | 11,682  |   |   |   | 50 |   |   |   | 1.7 | % |   |   | 13,589 |   |   |   | 41 |   |   |   | 1.2 | % |
| Total earning assets                                  |   |                                        | 106,915 |   |   |   | 1,819 |   |   |   | 6.8 | % |   |   | 137,330 |   |   |   | 2,039 |   |   |   | 5.9 | % |
| Cash and other assets                                 |   |                                        | 5,686   |   |   |   |   |   |   |   |   |   |   |   | 5,760 |   |   |   |   |   |   |   |   |   |
| Total assets                                          |   | $                                           | 112,601 |   |   |   |   |   |   |   |   |   |   | $ | 143,090 |   |   |   |   |   |   |   |   |   |
|                                                  |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest-bearing liabilities                          |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| NOW accounts                                          |   | $                                           | 2,523   |   |   |   | 4 |   |   |   | 0.6 | % |   | $ | 2,069 |   |   |   | 4 |   |   |   | 0.7 | % |
| Money market accounts                                 |   |                                        | 26,791  |   |   |   | 52 |   |   |   | 0.8 | % |   |   | 47,052 |   |   |   | 100 |   |   |   | 0.9 | % |
| Savings accounts                                      |   |                                        | 188     |   |   |   | - |   |   |   | 0.8 | % |   |   | 194 |   |   |   | 1 |   |   |   | 0.9 | % |
| Certificates of deposit less than $100,000            |   |                                        | 11,851  |   |   |   | 103 |   |   |   | 3.5 | % |   |   | 15,341 |   |   |   | 151 |   |   |   | 4.0 | % |
| Certificates of deposit $100,000 or greater           |   |                                        | 43,065  |   |   |   | 416 |   |   |   | 3.9 | % |   |   | 44,456 |   |   |   | 462 |   |   |   | 4.2 | % |
| Total interest bearing deposits                       |   |                                        | 84,418  |   |   |   | 575 |   |   |   | 2.8 | % |   |   | 109,112 |   |   |   | 718 |   |   |   | 2.7 | % |
| Borrowed funds                                        |   |                                        | 3,900   |   |   |   | 4 |   |   |   | 0.5 | % |   |   | 8,622 |   |   |   | 5 |   |   |   | 0.2 | % |
| Total interest bearing liabilities                    |   |                                        | 88,318  |   |   |   | 579 |   |   |   | 2.7 | % |   |   | 117,734 |   |   |   | 723 |   |   |   | 2.5 | % |
| Noninterest bearing deposits                          |   |                                        | 11,717  |   |   |   |   |   |   |   |   |   |   |   | 10,765 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                     |   |                                        | 1,529   |   |   |   |   |   |   |   |   |   |   |   | 3,162 |   |   |   |   |   |   |   |   |   |
| Stockholders’ equity                            |   |                                        | 11,037  |   |   |   |   |   |   |   |   |   |   |   | 11,429 |   |   |   |   |   |   |   |   |   |
| Total liabilities and stockholders' equity            |   | $                                           | 112,601 |   |   |   |   |   |   |   |   |   |   | $ | 143,090 |   |   |   |   |   |   |   |   |   |
|                                                  |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                   |   |                                        |    |   |   |   | 1,240 |   |   |   |   |   |   |   |   |   |   |   | 1,316 |   |   |   |   |   |
| Net interest spread                                   |   |                                        |    |   |   |   |   |   |   |   | 4.1 | % |   |   |   |   |   |   |   |   |   |   | 3.4 | % |
| Net interest margin                                   |   |                                        |    |   |   |   |   |   |   |   | 4.7 | % |   |   |   |   |   |   |   |   |   |   | 3.8 | % |
|                                                  |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Provision for loan loss                               |   |                                        |    |   |   |   | 19 |   |   |   |   |   |   |   |   |   |   |   | 1,303 |   |   |   |   |   |
| Non-interest income                                   |   |                                        |    |   |   |   | 2,215 |   |   |   |   |   |   |   |   |   |   |   | 1,930 |   |   |   |   |   |
| Non-interest expense                                  |   |                                        |    |   |   |   | 5,269 |   |   |   |   |   |   |   |   |   |   |   | 3,123 |   |   |   |   |   |
| Loss before income taxes                              |   |                                        |    |   |   |   | (1,833 | )  |   |   |   |   |   |   |   |   |   |   | (1,180 | ) |   |   |   |   |
| Income taxes expense (benefit)                        |   |                                        |    |   |   |   | - |   |   |   |   |   |   |   |   |   |   |   | - |   |   |   |   |   |
| Net loss                                              |   |                                        |    |   |   | $ | (1,833 | )  |   |   |   |   |   |   |   |   |   | $ | (1,180 | ) |   |   |   |   |
|                                                  |   |                                        |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Loss per share                                        |   |                                        |    |   |   |   | (0.94 | )  |   |   |   |   |   |   |   |   |   |   | (0.61 | ) |   |   |   |   |
| Return on average equity                              |   |                                        |    |   |   |   | (66.43 | )% |   |   |   |   |   |   |   |   |   |   | (41.30 | )% |   |   |   |   |
| Return on average assets                              |   |                                        |    |   |   |   | (6.51 | )% |   |   |   |   |   |   |   |   |   |   | (3.30 | )% |   |   |   |   |
| Equity to assets ratio                                |   |                                        |    |   |   |   | 9.80 | % |   |   |   |   |   |   |   |   |   |   | 7.99 |  % |   |   |   |   |

| (1) | Includes nonaccrual loans |
|-----|---------------------------|

----

----

----

|                                  |   | As of     |   |   | As of        |   |
|---------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| (000's)                               |   | March 31, 2011 |   |   | December 31, 2010 |   |
| Commercial and industrial             |   | $              | 61,939 |   |              | $      | 64,381 |   |
| Consumer installment                  |   |           | 1,007  |   |              |   | 1,002 |   |
| Real estate — mortgage     |   |           | 22,126 |   |              |   | 22,377 |   |
| Real estate — construction |   |           | 7,720  |   |              |   | 8,309 |   |
| Other                                 |   |           | -      |   |              |   | 6 |   |
|  Total loans                     |   |           | 92,792 |   |              |   | 96,075 |   |
|                                  |   |           |   |   |              |   |   |   |
| Less allowance for loan losses        |   |           | 1,829  |   |              |   | 1,754 |   |
| Less deferred loan fees               |   |           | 116    |   |              |   | 136 |   |
|  Total net loans                 |   | $              | 90,847 |   |              | $      | 94,185 |   |

----

|                                     |   | As of March 31, 2011 |   |
|------------------------------------------|--------|--------------------------------|--------|
|                                     |   |                           |   |   | Over 1 Year through5 Years |   |   | Over 5 Years |   |   |   |   |
|   (000's)                           |   | One YearorLess            |   |   | Fixed Rate |   |   | Floating orAdjustableRate |   |   | Fixed Rate |   |   | Floating orAdjustableRate |   |   | Total |   |
| Commercial and industrial (1)            |   | $                              | 6,045  |   |   | $ | 6,252 |   |   | $ | 27,709 |   |   | $ | 21,159 |   |   | $ | 774 |   |   | $ | 61,939 |   |
| Consumer installment                     |   |                           | 624    |   |   |   | 383 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 1,007 |   |
| Real estate — mortgage        |   |                           | 5,059  |   |   |   | 7,514 |   |   |   | 4,967 |   |   |   | 1,393 |   |   |   | 3,193 |   |   |   | 22,126 |   |
| Real estate — construction(1) |   |                           | 2,586  |   |   |   | 1,919 |   |   |   | 361 |   |   |   | - |   |   |   | 2,854 |   |   |   | 7,720 |   |
| Other                                    |   |                           | -      |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Total                                    |   | $                              | 14,314 |   |   | $ | 16,068 |   |   | $ | 33,037 |   |   | $ | 22,552 |   |   | $ | 6,821 |   |   | $ | 92,792 |   |

| (1) | Includes nonaccrual and other loans at March 31, 2011. |
|-----|--------------------------------------------------------|

----

|                                |   | March 31, 2011 |   |   | December 31, 2010                     |   |
|-------------------------------------|--------|----------------|--------|--------|---------------------------------------|--------|
| (000's, except percentages):        |   | Amount         |   |   | LoanCategory toTotal Assets |   |   | Amount |   |   | LoanCategory toTotal Assets |   |
|                                |   |           |   |   |                                  |   |   |   |   |   |   |   |
| Commercial and industrial           |   | $              | 358    |   |                                  |   | 0.33 | % |   | $ | 367 |   |   |   | 0.32 | % |
| Real estate — mortgage        |   |           | -      |   |                                  |   | - |   |   |   | 1,462 |   |   |   | 1.27 |   |
| Real estate — construction    |   |           | -      |   |                                  |   | - |   |   |   | - |   |   |   | - |   |
| Consumer and other                  |   |           | -      |   |                                  |   | - |   |   |   | - |   |   |   | - |   |
| Total nonaccrual loans              |   |           | 358    |   |                                  |   | 0.33 |   |   |   | 1,829 |   |   |   | 1.59 |   |
| Other real estate owned             |   |           | 2,233  |   |                                  |   | 2.01 |   |   |   | 2,291 |   |   |   | 1.99 | % |
| Total non-performing assets         |   | $              | 2,591  |   |                                  |   | 2.39 | % |   | $ | 4,120 |   |   |   | 3.58 | % |
| Restructured loans accruing         |   | $         | 2,368  |   |                                  |   | 2.8 | % |   | $  | 2,395 |   |   |   | 2.08 | % |
| Loans past due 90 days and accruing |   | $         | -      |   |                                  |   | - | % |   | $ | - |   |   |   | - | % |

----

|  (000's)                         |   | As ofMarch 31, 2011 |   |   | As ofDecember 31, 2010 |   |
|---------------------------------------|--------|--------------------------|--------|--------|---------------------------------------|--------|
| Allocated:                            |   | Amount                   |   |   | LoanCategory toGross Loans  |   |   | Amount |   |   | LoanCategory toGross Loans |   |
| Commercial and industrial             |   | $                        | 1,221  |   |                                  |   | 66.8 | % |   | $ | 1,175 |   |   |   | 67.1 | % |
| Consumer installment                  |   |                     | 20     |   |                                  |   | 1.1 |   |   |   | 18 |   |   |   | 1.0 |   |
| Real estate — mortgage     |   |                     | 436    |   |                                  |   | 23.8 |   |   |   | 409 |   |   |   | 23.3 |   |
| Real estate — construction |   |                     | 152    |   |                                  |   | 8.3 |   |   |   | 152 |   |   |   | 8.6 |   |
| Total allowance for loan losses       |   | $                        | 1,829  |   |                                  |   | 100.0 | % |   | $ | 1,754 |   |   |   | 100.0 | % |

|                                         |   | For the three months ended |   |
|----------------------------------------------|--------|------------------------------------------------|--------|
| (000's)                                      |   | March 31, 2011                                 |   |   | March 31, 2010 |   |
|                                         |   | AverageBalance                                 |   |   | Percent ofDeposits |   |   | AverageRate |   |   | AverageBalance |   |   | Percent ofDeposits |   |   | AverageRate |   |
| Noninterest bearing deposits                 |   | $                                              | 11,717 |   |   |   | 12.2 | %  |   |   | 0.0 | %  |   | $ | 10,765 |   |   |   | 9.0 | % |   |   | 0.0 | % |
| NOW accounts                                 |   |                                           | 2,523  |   |   |   | 2.6 |   |   |   | 0.6 |   |   |   | 2,069 |   |   |   | 1.7 |   |   |   | 0.7 |   |
| Money market accounts                        |   |                                           | 26,791 |   |   |   | 27.9 |   |   |   | 0.8 |   |   |   | 47,052 |   |   |   | 39.2 |   |   |   | 0.9 |   |
| Savings accounts                             |   |                                           | 188    |   |   |   | 0.2 |   |   |   | 0.8 |   |   |   | 194 |   |   |   | .2 |   |   |   | 0.9 |   |
| Certificates of deposit, less than $100,000  |   |                                           | 11,851 |   |   |   | 12.3 |   |   |   | 3.5 |   |   |   | 15,341 |   |   |   | 12.8 |   |   |   | 4.0 |   |
| Certificates of deposit, $100,000 or greater |   |                                           | 43,065 |   |   |   | 44.8 |   |   |   | 3.9 |   |   |   | 44,456 |   |   |   | 37.1 |   |   |   | 4.2 |   |
|                                         |   |                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total deposits                               |   | $                                              | 96,135 |   |   |   | 100.00 | %  |   |   | 2.4 | % |   | $ | 119,877 |   |   |   | 100.00 | % |   |   | 2.4 | % |

----

| (000's)                               |   | March 31,2011 |   |   | December 31,2010 |   |
|---------------------------------------|--------|---------------|--------|--------|-----------------------|--------|
| Three months or less                  |   | $             | 9,400  |   |                  | $      | 1,467 |   |
| Over three months through six months  |   |          | 12,373 |   |                  |   | 9,184 |   |
| Over six months through twelve months |   |          | 10,280 |   |                  |   | 18,420 |   |
| Over twelve months                    |   |          | 11,397 |   |                  |   | 13,368 |   |
|                                  |   |          |   |   |                  |   |   |   |
| Total                                 |   | $             | 43,450 |   |                  | $      | 42,439 |   |

----

| (000's)                                  |   | Actual |   |   | For Capital Adequacy Purposes |   |   | To Be Well Capitalized UnderPrompt Corrective ActionProvisions |   |
|------------------------------------------|--------|--------|--------|--------|----------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------|--------|
|                                     |   | Amount |   |   | Ratio                                        |   |   | Amount                                                                                       |   |   | Ratio |   |   | Amount |   |   | Ratio |   |
| As of March 31, 2011                     |   |   |   |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to Risk Weighted Assets)  |   | $      | 12,390 |   |                                         |   | 10.75  | %                                                                                            |   | $ | 7,655 | > |   |   | 8.00 | % |   | $ | 9,569 | > |   |   | 10.00 | % |
|                                     |   |   |   |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Risk Weighted Assets) |   |   | 11,186 |   |                                         |   | 9.50   | %                                                                                            |   |   | 3,827 | > |   |   | 4.00 | % |   |   | 5,741 | > |   |   | 6.00 | % |
|                                     |   |   |   |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Average Assets)       |   |   | 11,186 |   |                                         |   | 8.07   | %                                                                                            |   |   | 4,504 | > |   |   | 4.00 | % |   |   | 5,631 | > |   |   | 5.00 | % |
|                                     |   |   |   |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| As of December 31, 2010                  |   |   |   |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total Capital (to Risk Weighted Assets)  |   | $      | 12,156 |   |                                         |   | 12.20  | %                                                                                            |   | $ | 7,973 | > |   |   | 8.00 | % |   | $ | 9,966 | > |   |   | 10.00 | % |
|                                     |   |   |   |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Risk Weighted Assets) |   |   | 10,904 |   |                                         |   | 10.94  | %                                                                                            |   |   | 3,986 | > |   |   | 4.00 | % |   |   | 5,979 | > |   |   | 6.00 | % |
|                                     |   |   |   |   |                                         |   |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tier 1 Capital (to Average Assets)       |   |   | 10,904 |   |                                         |   | 9.41   | %                                                                                            |   |   | 4,635 | > |   |   | 4.00 | % |   |   | 5,793 | > |   |   | 5.00 | % |

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|                 | As of March 31, 2011 |   |
|--------------------------------|--------------------------------|--------|
| (000's)                        | Less thanOneYear          |   | One to ThreeYears |   | Over Three toFive Years |   | Over FiveYears |   |
| Operating leases               |                           | $      | 252 |   |   | $ | 421 |   |   | $ | 157 |   |   | $ | 58 |   |
|                      |                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Certificates of deposit   |                           | $      | 40,312 |   |   | $ | 14,201 |   |   | $ | 793 |   |   | $ | - |   |

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| ExhibitNo. |   | Description of Exhibit                                                                                                         |
|------------|--------|--------------------------------------------------------------------------------------------------------------------------------|
|       |   |                                                                                                                           |
| 3.1        |   | Articles of Incorporation*                                                                                                     |
| 3.2        |   | Bylaws of Registrant (1)                                                                                                       |
| 10.1       |   | T Bancshares, Inc. (f/k/a First Metroplex Capital, Inc.) 2005 Incentive Plan (2)(3)                                            |
| 10.2       |   | Form of Incentive Stock Option Agreement (2)(3)                                                                                |
| 10.3       |   | Form of Non-Qualified Stock Option Agreement (2)(3)                                                                            |
| 10.4       |   | T Bancshares, Inc. (f/k/a First Metroplex Capital, Inc.) Organizers' Warrant Agreement dated November 2, 2004  (4)   |
| 10.5       |   | T Bancshares, Inc. (f/k/a First Metroplex Capital, Inc.) Shareholders' Warrant Agreement dated November 2, 2004  (4) |
| 10.6       |   | Extension of term of initial Shareholder Warrants (4)                                                                          |
| 10.7       |   | Form of Employment Agreement by and between T Bancshares, Inc. and Patrick Howard (3)(5)                                       |
| 10.8       |   | Form of Employment Agreement by and between T Bancshares, Inc. and Steve Jones (3)(6)*                                         |
| 10.9       |   | Form of Executive Employment Agreement Modification by and between T Bancshares, Inc. and Steve Jones (3)(7)*                  |
| 10.9       |   | Agreement between T Bank, N.A. and the Office of the Comptroller of the Currency, dated April 15, 2010 (8)                     |
| 10.10      |   | Consent Order for Civil Money Penalty of T Bank, N.A., dated April 15, 2010 (7)                                                |
| 31.1       |   | Rule 13a-14(a) Certification of Principal Executive Officer*                                                                   |
| 31.2       |   | Rule 13a-14(a) Certification of Principal Financial Officer*                                                                   |
| 32         |   | Section 1350 Certification*                                                                                                    |

| (1)    |   | Incorporated by reference from Exhibit 3.1 to the Current Report on Form 8-K filed by the Registrant with the SEC on April 30, 2008.                              |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                              |
| (2)    |   | Incorporated by reference from the Registration Statement on Form S-8 filed by the Registrant with the SEC on September 20, 2005.                                 |
|   |   |                                                                                                                                                              |
| (3)    |   | Indicates a compensatory plan or contract.                                                                                                                   |
|   |   |                                                                                                                                                              |
| (4)    |   | Incorporated by reference from the Registration Statement on Form SB-2 filed by the Registrant with the SEC on December 15, 2003 and as amended on June 11, 2007. |
|   |   |                                                                                                                                                              |
| (5)    |   | Incorporated by reference from the Current Report on Form 8-K filed by the Registrant with the SEC on September 5, 2007.                                          |
|   |   |                                                                                                                                                              |
| (6)    |   | Incorporated by reference from the Annual Report on Form 10-KSB filed by the Registrant with the SEC on March 31, 2005.                                           |
|   |   |                                                                                                                                                              |
| (7)    |   | Incorporated by reference from the Quarterly Report on Form 10-QSB filed by the Registrant with the SEC on November 14, 2007.                                     |
|   |   |                                                                                                                                                              |
| (8)    |   | Incorporated by reference from the Annual Report on Form 10-K filed by the Registrant with the SEC on April 15, 2010.                                             |
|   |   |                                                                                                                                                              |
| *      |   | Filed Herewith                                                                                                                                                    |

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|                | T BANCSHARES, INC. |
|---------------------|--------------------|
|           |          |     |
| Date: June 21, 2011 | By:      | /s/ Patrick Howard |
|           |               |    |
|                |               | Patrick HowardPresident and Chief Executive Officer/Principal Executive Officer |
|                |          |     |
|           | By:           | /s/ Ken Bramlage |
|                |               |   |
|                |               | Ken BramlageSenior Vice President and Chief Financial Officer/Principal Financial Officer |

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