----

----

| Virginia(State of incorporation or organization)                                                                                       | 20-0469337(I.R.S. Employer Identification No.) |
|---------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------|
| 126 South Main StreetBlackstone, VA  23824(434) 292-7221 (Address and telephone number of principal executive offices)  |

|   | Large accelerated filer  £           | Accelerated filer                            £ |
|--------|-----------------------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Non-accelerated filer    £ | Smaller Reporting Company         R                                                                                                                |
|   | (Do not check if smaller reporting company)         |                                                                                                                                                                                            |

----

----

----

| Part I.    Financial Information                                                        | Page No.                                                    |
|--------------------------------------------------------------------------------------------------------|-------------------------------------------------------------|
| Item 1.                                                                                                | Financial Statements                                        |   |
| Consolidated Balance Sheet                                                                             | 3                                                           |
| Consolidated Statements of Income                                                                      | 4                                                           |
| Consolidated Statements of Changes in Stockholders’ Equity                                       | 5                                                           |
| Consolidated Statements of Cash Flows                                                                  | 6                                                           |
| Notes to Interim Consolidated Financial Statements                                                     | 7                                                           |
| Item 2.     Management’s Discussion and Analysis of Financial Condition |                                                        |
|                                                                                                   | and Results of Operations                                   | 29 |
| Item 4.     Controls and Procedures                                                | 42                                                          |
| Part II.     Other Information                                                     |                                                        |
| Item 1.                                                                                                | Legal Proceedings                                           | 43 |
| Item 1A.                                                                                               | Risk Factors                                                | 43 |
| Item 2.                                                                                           | Unregistered Sales of Equity Securities and Use of Proceeds | 43 |
| Item 3.                                                                                                | Defaults upon Senior Securities                             | 44 |
| Item 4.                                                                                                | [Removed and Reserved]                                      | 44 |
| Item 5.                                                                                                | Other Information                                           | 44 |
| Item 6.                                                                                                | Exhibits                                                    | 44 |
| Signatures                                                                                             | 45                                                          |

----

|                                                                                                   |   | March 31,   |    |   | December 31, |   |
|--------------------------------------------------------------------------------------------------------|--------|-------------|---------|--------|--------------|--------|
|                                                                                                   |   | 2011        |    |   | 2010         |   |
|      Assets                                                                   |   | (Unaudited) |    |   |         |   |
|                                                                                                   |   |        |    |   |         |   |
| Cash and due from banks                                                                                |   | $           | 6,430   |   |         | $      | 5,427 |   |
| Interest-bearing deposits in banks                                                                     |   |        | 1,831   |   |         |   | 1,857 |   |
| Federal funds sold                                                                                     |   |        | 10,776  |   |         |   | 15,460 |   |
| Securities available for sale, at fair market value                                                    |   |        | 86,852  |   |         |   | 82,745 |   |
| Restricted securities, at cost                                                                         |   |        | 1,079   |   |         |   | 1,079 |   |
| Loans, net of allowance for loan losses of $2,273                                                      |   |        |    |   |         |   |   |   |
|     and $2,168                                                                     |   |        | 201,002 |   |         |   | 200,515 |   |
| Premises and equipment, net                                                                            |   |        | 7,104   |   |         |   | 7,135 |   |
| Accrued interest receivable                                                                            |   |        | 1,707   |   |         |   | 1,816 |   |
| Other assets                                                                                           |   |        | 10,735  |   |         |   | 10,996 |   |
| Other real esate owned, net of valuation allowance                                                     |   |        |    |   |         |   |   |   |
|     of $76                                                                         |   |        | 3,525   |   |         |   | 3,425 |   |
|                                                                                                   |   |        |    |   |         |   |   |   |
|           Total assets                               |   | $           | 331,041 |   |         | $      | 330,455 |   |
|                                                                                                   |   |        |    |   |         |   |   |   |
|      Liabilities and Stockholders' Equity                                     |   |        |    |   |         |   |   |   |
|                                                                                                   |   |        |    |   |         |   |   |   |
| Liabilities                                                                                            |   |        |    |   |         |   |   |   |
| Deposits:                                                                                              |   |        |    |   |         |   |   |   |
| Noninterest-bearing                                                                                    |   | $           | 34,854  |   |         | $      | 33,161 |   |
| Interest-bearing                                                                                       |   |        | 241,083 |   |         |   | 244,827 |   |
| Total deposits                                                                                         |   | $           | 275,937 |   |         | $      | 277,988 |   |
| FHLB advances                                                                                          |   |        | 5,000   |   |         |   | 5,000 |   |
| Other borrowings                                                                                       |   |        | 6,514   |   |         |   | 5,149 |   |
| Accrued interest payable                                                                               |   |        | 909     |   |         |   | 886 |   |
| Accrued expenses and other liabilities                                                                 |   |        | 2,336   |   |         |   | 1,795 |   |
|           Total liabilities                          |   | $           | 290,696 |   |         | $      | 290,818 |   |
|                                                                                                   |   |        |    |   |         |   |   |   |
|                                                                                                   |   |        |    |   |         |   |   |   |
| Stockholders' Equity                                                                                   |   |        |    |   |         |   |   |   |
|    Preferred stock, $0.50 par value; authorized 1,000,000 shares;                       |   |        |    |   |         |   |   |   |
|        none outstanding                                             |   | $           | -       |   |         | $      | - |   |
| Common stock, $0.50 par value; authorized 10,000,000 shares;                                           |   |        |    |   |         |   |   |   |
|        issued and outstanding, 2,348,509 in 2011 and                |   |        | 1,174   |   |         |   | 1,177 |   |
|        2,353,509 in 2010                                            |   |        |    |   |         |   |   |   |
| Retained earnings                                                                                      |   |        | 39,580  |   |         |   | 39,308 |   |
| Accumulated other comprehensive income (loss)                                                          |   |        | (409    | )      |         |   | (848 | ) |
|           Total stockholders' equity                 |   | $           | 40,345  |   |         | $      | 39,637 |   |
|                                                                                                   |   |        |    |   |         |   |   |   |
|           Total liabilities and stockholders' equity |   | $           | 331,041 |   |         | $      | 330,455 |   |

----

| CITIZENS BANCORP OF VIRGINIA, INC. AND SUBSIDIARY                    |   |
|----------------------------------------------------------------------|--------|
| Consolidated Statements of Income (Unaudited)                        |   |
| (Dollars in thousands, except per share data)                        |   |
|                                                                 |   |   |   |   |   |   |
|                                                                 |   | Three Months Ended |   |
|                                                                 |   | March 31, |   |
|                                                                 |   | 2011 |   |   | 2010 |   |
| Interest and Dividend Income                                         |   |   |   |   |   |   |
|   Loans, including fees                                    |   | $ | 3,241 |   |   | $ | 3,420 |   |
|   Investment securities:                                   |   |   |   |   |   |   |   |   |
| Taxable                                                              |   |   | 484 |   |   |   | 498 |   |
| Tax-exempt                                                           |   |   | 258 |   |   |   | 160 |   |
|   Federal Funds sold                                       |   |   | 7 |   |   |   | 5 |   |
|   Other                                                    |   |   | 4 |   |   |   | 4 |   |
| Total interest and dividend income                                   |   | $ | 3,994 |   |   | $ | 4,087 |   |
|                                                                 |   |   |   |   |   |   |   |   |
| Interest Expense                                                     |   |   |   |   |   |   |   |   |
|   Deposits                                                 |   | $ | 982 |   |   | $ | 1,131 |   |
|   Other borrowings                                         |   |   | 38 |   |   |   | 37 |   |
| Total interest expense                                               |   | $ | 1,020 |   |   | $ | 1,168 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|       Net interest income              |   | $ | 2,974 |   |   | $ | 2,919 |   |
|                                                                 |   |   |   |   |   |   |   |   |
| Provision for loan losses                                            |   |   | 150 |   |   |   | 300 |   |
|                                                                 |   |   |   |   |   |   |   |   |
| Net interest income after provision                                  |   |   |   |   |   |   |   |   |
|        for loan losses            |   | $ | 2,824 |   |   | $ | 2,619 |   |
|                                                                 |   |   |   |   |   |   |   |   |
| Noninterest Income                                                   |   |   |   |   |   |   |   |   |
|   Service charges on deposit accounts                      |   | $ | 239 |   |   | $ | 261 |   |
|   Net gain on sales of securities                          |   |   | - |   |   |   | 4 |   |
|   Net gain on sales of loans                               |   |   | 14 |   |   |   | 10 |   |
|   Net gain on sale of other real estate owned              |   |   | 7 |   |   |   | - |   |
|   Income from bank owned life insurance                    |   |   | 72 |   |   |   | 68 |   |
|   ATM fee income                                           |   |   | 182 |   |   |   | 150 |   |
|   Other                                                    |   |   | 49 |   |   |   | 64 |   |
| Total noninterest income                                             |   | $ | 563 |   |   | $ | 557 |   |
|                                                                 |   |   |   |   |   |   |   |   |
| Noninterest Expense                                                  |   |   |   |   |   |   |   |   |
|   Salaries and employee benefits                           |   | $ | 1,369 |   |   | $ | 1,364 |   |
|   Net occupancy expense                                    |   |   | 149 |   |   |   | 153 |   |
|   Equipment expense                                        |   |   | 122 |   |   |   | 131 |   |
|   FDIC deposit insurance                                   |   |   | 201 |   |   |   | 156 |   |
|   Other                                                    |   |   | 593 |   |   |   | 564 |   |
| Total noninterest expense                                            |   | $ | 2,434 |   |   | $ | 2,368 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|        Income before income taxes |   | $ | 953 |   |   | $ | 808 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|        Income taxes               |   |   | 219 |   |   |   | 200 |   |
|                                                                 |   |   |   |   |   |   |   |   |
|        Net income                 |   | $ | 734 |   |   | $ | 608 |   |
| Earnings per share, basic & diluted                              |   | $ | 0.31 |   |   | $ | 0.26 |   |

----

|                                                                                                     |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |
|----------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|----------|--------|--------|-------------|--------|--------|---------|--------|--------|--------|--------|
|                                                                                                     |   |   |   |   |     |   |   | Accumulated |   |   |    |   |   |   |   |
|                                                                                                     |   |   |   |   |     |   |   | Other       |   |   |    |   |   |   |   |
|                                                                                                     |   |   |   |   |     |   |   | Compre-     |   |   |    |   |   |   |   |
|                                                                                                     |   |   |   |   |     |   |   | hensive     |   |   | Compre- |   |   |   |   |
|                                                                                                     |   | Common |   |   | Retained |   |   | Income      |   |   | hensive |   |   |   |   |
|                                                                                                     |   | Stock  |   |   | Earnings |   |   | (Loss)      |   |   | Income  |   |   | Total  |   |
|                                                                                                     |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |
| Balance at December 31, 2009                                                                             |   | $      | 1,186  |   |     | $      | 38,177 |        |   | $      | (373    | )      |   |   |   |   | $ | 38,990 |   |
| Comprehensive income:                                                                                    |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |
|    Net Income                                                                             |   |   | -      |   |     |   | 608    |        |   |   | -       |   |   | $      | 608    |   |   |   | 608 |   |
|    Other comprehensive income, net of taxes                                               |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
|        Unrealized gains on securities available                       |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
|            for sale, net of deferred taxes        |   |   | -      |   |     |   | -      |        |   |   | 195     |   |   |   | 195    |   |   |   | 195 |   |
|        Less: reclassification adjustment for                          |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
|            gain on sale of securities, net of tax |   |   | -      |   |     |   | -      |        |   |   | (3      | )      |   |   | (3     | ) |   |   | (3 | ) |
|        Other comprehensive income                                     |   |   |   |   |     |   |   |        |   |   |    |   |   |   | 192    |   |   |   |   |   |
|        Total comprehensive income                                     |   |   | -      |   |     |   | -      |        |   |   | -       |   |   | $      | 800    |   |   |   | - |   |
| Shares repurchased                                                                                       |   |   | (3     | )      |     |   | (63    | )           |   |   | -       |   |   |   |   |   |   |   | (66 | ) |
| Cash dividends declared ($0.17 per share)                                                                |   |   | -      |   |     |   | (403   | )           |   |   | -       |   |   |   |   |   |   |   | (403 | ) |
| Balance at March 31, 2010                                                                                |   | $      | 1,183  |   |     | $      | 38,319 |        |   | $      | (181    | )      |   |   |   |   |   | $ | 39,321 |   |
|                                                                                                     |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
| Balance at December 31, 2010                                                                             |   | $      | 1,177  |   |     | $      | 39,308 |        |   | $      | (848    | )      |   |   |   |   |   | $ | 39,637 |   |
| Comprehensive Income:                                                                                    |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
|    Net income                                                                             |   |   | -      |   |     |   | 734    |        |   |   | -       |   |   | $      | 734    |   |   |   | 734 |   |
|    Other comprehensive income, net of taxes                                               |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
|        Unrealized gains on securities available                       |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
|            for sale, net of deferred taxes        |   |   | -      |   |     |   | -      |        |   |   | 439     |   |   |   | 439    |   |   |   | 439 |   |
|        Less: reclassification adjustment for                          |   |   |   |   |     |   |   |        |   |   |    |   |   |   |   |   |   |   |   |   |
|            gain on sale of securities, net of tax |   |   | -      |   |     |   | -      |        |   |   | -       |   |   |   | -      |   |   |   | - |   |
|        Total other comprehensive income                               |   |   |   |   |     |   |   |        |   |   |    |   |   | $      | 439    |   |   |   |   |   |
|        Total comprehensive income                                     |   |   | -      |   |     |   | -      |        |   |   | -       |   |   | $      | 1,173  |   |   |   | - |   |
| Shares repurchased                                                                                       |   |   | (3     | )      |     |   | (63    | )           |   |   | -       |   |   |   |   |   |   |   | (66 | ) |
| Cash dividends declared ($0.17 per share)                                                                |   |   | -      |   |     |   | (399   | )           |   |   | -       |   |   |   |   |   |   |   | (399 | ) |
| Balance at March 31, 2011                                                                                |   | $      | 1,174  |   |     | $      | 39,580 |        |   | $      | (409    | )      |   |   |   |   |   | $ | 40,345 |   |

----

| CITIZENS BANCORP OF VIRGINIA, INC. AND SUBSIDIARY |
|---------------------------------------------------|
|                                              |
| Consolidated Statements of Cash Flows (Unaudited) |
| (Dollars in thousands)                            |

|                                                                                                                             |   | Three Months Ended |   |
|----------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|--------|
|                                                                                                                             |   | March 31,          |   |
|                                                                                                                             |   | 2011               |   |   | 2010 |   |
| Cash Flows from Operating Activities                                                                                             |   |               |   |   |   |   |
|   Net Income                                                                                                           |   | $                  | 734    |   |   | $ | 608 |   |
|   Adjustments to reconcile net income to net cash                                                                      |   |               |   |   |   |   |   |   |
|      provided by operating activities:                                                                  |   |               |   |   |   |   |   |   |
|          Depreciation                                                               |   |               | 271    |   |   |   | 146 |   |
|          Provision for loan losses                                                  |   |               | 150    |   |   |   | 300 |   |
|          Net (gain) on sales of loans                                               |   |               | (14    | ) |   |   | (10 | ) |
|          Origination of loans held for sale                                         |   |               | (1,002 | ) |   |   | (721 | ) |
|          Proceeds from sales of loans                                               |   |               | 1,016  |   |   |   | 731 |   |
|          Net (gain) on sales and calls of securities                                |   |               | -      |   |   |   | (4 | ) |
|          Net amortization of securities                                             |   |               | 74     |   |   |   | 49 |   |
|          Net (gain) on sale of other real estate owned                              |   |               | (7     | ) |   |   | - |   |
|          Changes in assets and liabilities:                                         |   |               |   |   |   |   |   |   |
|              Decrease in accrued interest receivable            |   |               | 109    |   |   |   | 4 |   |
|              Decrease in other assets                           |   |               | 35     |   |   |   | 126 |   |
|              Increase (decrease) in accrued interest payable    |   |               | 23     |   |   |   | (4 | ) |
|              Increase in accrued expenses and other liabilities |   |               | 541    |   |   |   | 309 |   |
|          Net cash provided by operating activities                                  |   | $                  | 1,930  |   |   | $ | 1,534 |   |
| Cash Flows from Investing Activities                                                                                             |   |               |   |   |   |   |   |   |
|   Activity in available for sale securities:                                                                           |   |               |   |   |   |   |   |   |
|          Calls and sales                                                            |   | $                  | 3,125  |   |   |   | 8,805 |   |
|          Maturities and prepayments                                                 |   |               | 2,321  |   |   |   | 1,993 |   |
|          Purchases                                                                  |   |               | (8,963 | ) |   |   | (21,670 | ) |
|   Net (increase) decrease in loans                                                                                     |   |               | (772   | ) |   |   | 3,743 |   |
|   Purchases of land, premises and equipment                                                                            |   |               | (239   | ) |   |   | (68 | ) |
|   Proceeds from sale of other real estate owned                                                                        |   |               | 42     |   |   |   | - |   |
|          Net cash (used in) investing activities                                    |   | $                  | (4,486 | ) |   | $ | (7,197 | ) |
| Cash Flows from Financing Activities                                                                                             |   |               |   |   |   |   |   |   |
|   Net (decrease) increase in deposits                                                                                  |   | $                  | (2,051 | ) |   | $ | 3,940 |   |
|   Net increase in other borrowings                                                                                     |   |               | 1,365  |   |   |   | 802 |   |
|   Repurchase of common stock                                                                                           |   |               | (66    | ) |   |   | (66 | ) |
|   Dividends paid                                                                                                       |   |               | (399   | ) |   |   | (403 | ) |
|          Net cash (used in) provided by financing activities                        |   | $                  | (1,151 | ) |   | $ | 4,273 |   |
|          Net (decrease) in cash and cash equivalents                                |   | $                  | (3,707 | ) |   | $ | (1,390 | ) |
| Cash and Cash Equivalents                                                                                                        |   |               |   |   |   |   |   |   |
|   Beginning of period                                                                                                  |   |               | 22,744 |   |   |   | 17,035 |   |
|   End of period                                                                                                        |   | $                  | 19,037 |   |   | $ | 15,645 |   |
| Supplemental Disclosures of Cash Flow Information                                                                                |   |               |   |   |   |   |   |   |
|   Cash paid during the period for:                                                                                     |   |               |   |   |   |   |   |   |
|       Interest                                                                                     |   | $                  | 997    |   |   | $ | 1,172 |   |
|       Income Taxes                                                                                 |   | $                  | -      |   |   | $ | 104 |   |
| Supplemental Disclosures of Noncash Investing and                                                                                |   |               |   |   |   |   |   |   |
|    Financing Activities                                                                                           |   |               |   |   |   |   |   |   |
|       Other real estate acquired in settlement of loans                                            |   | $                  | 135    |   |   | $ | 124 |   |
|       Unrealized gains on securities available for sale                                            |   | $                  | 665    |   |   | $ | 291 |   |

----

|                                         |   | March 31, 2011         |   |
|----------------------------------------------|--------|------------------------|--------|
|                                         |   |                   |   |   | Gross |   |   | Gross |   |   |   |   |
|                                         |   | Amortized              |   |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                         |   | Cost                   |   |   | Gains |   |   | (Losses) |   |   | Value |   |
| U.S. government and                          |   | (Dollars in thousands) |   |
|      federal agency |   | $                      | 18,640 |   |   | $ | 32 |   |   | $ | (65 | ) |   | $ | 18,607 |   |
| State and municipal                          |   |                   | 28,463 |   |   |   | 355 |   |   |   | (262 | ) |   |   | 28,556 |   |
| Agency mortgage-backed                       |   |                   | 36,240 |   |   |   | 656 |   |   |   | (156 | ) |   |   | 36,740 |   |
| Non-agency mortgage-backed                   |   |                   | 2,297  |   |   |   | 6 |   |   |   | (172 | ) |   |   | 2,131 |   |
| Corporate                                    |   |                   | 753    |   |   |   | 65 |   |   |   | - |   |   |   | 818 |   |
| Securities available for sale                |   | $                      | 86,393 |   |   | $ | 1,114 |   |   | $ | (655 | ) |   | $ | 86,852 |   |

----

|                                 |   | December 31, 2010      |   |
|--------------------------------------|--------|------------------------|--------|
|                                 |   |                   |   |   | Gross |   |   | Gross |   |   |   |   |
|                                 |   | Amortized              |   |   | Unrealized |   |   | Unrealized |   |   | Fair |   |
|                                 |   | Cost                   |   |   | Gains |   |   | (Losses) |   |   | Value |   |
| U.S. government                      |   | (Dollars in thousands) |   |
|    and federal agency |   | $                      | 16,761 |   |   | $ | 36 |   |   | $ | (91 | ) |   | $ | 16,706 |   |
| State and municipal                  |   |                   | 29,142 |   |   |   | 209 |   |   |   | (646 | ) |   |   | 28,704 |   |
| Agency mortgage-backed               |   |                   | 33,828 |   |   |   | 629 |   |   |   | (198 | ) |   |   | 34,259 |   |
| Non-agency mortgage-backed           |   |                   | 2,466  |   |   |   | 1 |   |   |   | (192 | ) |   |   | 2,275 |   |
| Corporate                            |   |                   | 753    |   |   |   | 48 |   |   |   | - |   |   |   | 801 |   |
| Securities available for sale        |   | $                      | 82,950 |   |   | $ | 923 |   |   | $ | (1,127 | ) |   | $ | 82,745 |   |

|                                        |   | Amortized              |   |   | Fair   |   |
|---------------------------------------------|--------|------------------------|--------|--------|--------|--------|
|                                        |   | Cost                   |   |   | Value  |   |
|                                        |   | (Dollars in thousands) |   |
| Maturing within one year                    |   | $                      | 300    |   |   | $      | 301 |   |
| Maturing after one year through five years  |   |                   | 11,900 |   |   |   | 12,004 |   |
| Maturing after five years through ten years |   |                   | 10,953 |   |   |   | 11,056 |   |
| Mturing after ten years                     |   |                   | 24,703 |   |   |   | 24,620 |   |
| Agency mortgage-backed securities           |   |                   | 36,240 |   |   |   | 36,740 |   |
| Non-agency mortgage-backed securities       |   |                   | 2,297  |   |   |   | 2,131 |   |
| Securities available for sale               |   | $                      | 86,393 |   |   | $      | 86,852 |   |

|                                  |   | Less than 12 Months    |   |   | 12 Months or More |   |
|---------------------------------------|--------|------------------------|--------|--------|-------------------|--------|
|                                  |   | Fair                   |   |   | Unrealized        |   |   | Fair |   |   | Unrealized |   |
| March 31. 2011                        |   | Value                  |   |   | (Loss)            |   |   | Value |   |   | (Loss) |   |
|                                  |   | (Dollars in thousands) |   |
| U.S. government                       |   |                   |   |   |              |   |   |   |   |   |   |   |
| and federal agency                    |   | $                      | 7,434  |   |              | $      | (65 | ) |   | $ | - |   |   | $ | - |   |
| State and municipal                   |   |                   | 9,250  |   |              |   | (248 | ) |   |   | 361 |   |   |   | (14 | ) |
| Agency mortgage-backed                |   |                   | 15,039 |   |              |   | (156 | ) |   |   | - |   |   |   | - |   |
| Non-agency mortgage-backed            |   |                   | -      |   |              |   | - |   |   |   | 1,154 |   |   |   | (172 | ) |
| Total temporarily impaired securities |   | $                      | 31,723 |   |              | $      | (469 | ) |   | $ | 1,515 |   |   | $ | (186 | ) |

----

|                                                          |   | Less than 12 Months    |   |   | 12 Months or More |   |
|---------------------------------------------------------------|--------|------------------------|--------|--------|-------------------|--------|
|                                                          |   | Fair                   |   |   | Unrealized        |   |   | Fair |   |   | Unrealized |   |
| December 31, 2010                                             |   | Value                  |   |   | (Loss)            |   |   | Value |   |   | (Loss) |   |
|                                                          |   | (Dollars in thousands) |   |
| U.S. government                                               |   |                   |   |   |              |   |   |   |   |   |   |   |
|    and federal agency                               |   | $                      | 10,412 |   |              | $      | (91 | ) |   | $ | - |   |   | $ | - |   |
| State and municipal                                           |   |                   | 16,916 |   |              |   | (619 | ) |   |   | 348 |   |   |   | (27 | ) |
| Agency mortgage-backed                                        |   |                   | 10,408 |   |              |   | (198 | ) |   |   | - |   |   |   | - |   |
| Non-agency mortgage-backed                                    |   |                   | 695    |   |              |   | (6 | ) |   |   | 1,291 |   |   |   | (186 | ) |
|    Total temporarily  impaired securities |   | $                      | 38,431 |   |              | $      | (914 | ) |   | $ | 1,639 |   |   | $ | (213 | ) |

----

|                                                      |   | (Dollars in thousands) |   |
|-----------------------------------------------------------|--------|------------------------|--------|
|                                                      |   |                   |   |
| Credit losses recognized in earnings, beginning of period |   | $                      | 60     |   |
|                                                      |   |                   |   |   |
| Recognition of credit losses for which an OTTI was not    |   |                   |   |   |
| perviously recognized                                     |   |                   | -      |   |
|                                                      |   |                   |   |   |
| Credit losses recognized in earnings, end of period       |   | $                      | 60     |   |

|                                                              |   | March 31,              |    |   | December 31, |   |
|-------------------------------------------------------------------|--------|------------------------|---------|--------|--------------|--------|
|                                                              |   | 2011                   |    |   | 2010         |   |
|                                                              |   | (Dollars in thousands) |    |
| Residential Real Estate:                                          |   |                   |    |   |         |   |
|    1-4 family                                      |   | $                      | 91,432  |   |         | $      | 92,520 |   |
|    Home equity                                     |   |                   | 10,978  |   |         |   | 10,816 |   |
| Commercial Real Estate:                                           |   |                   |    |   |         |   |   |   |
|    Owner occupied                                  |   |                   | 25,554  |   |         |   | 23,884 |   |
|    Non-owner occupied                              |   |                   | 27,829  |   |         |   | 28,597 |   |
| Farmland                                                          |   |                   | 8,607   |   |         |   | 8,787 |   |
| Construction                                                      |   |                   | 14,186  |   |         |   | 12,943 |   |
|         Total real estate |   |                   | 178,586 |   |         |   | 177,547 |   |
|                                                              |   |                   |    |   |         |   |   |   |
| Commercial & industrial loans                                 |   |                   | 14,892  |   |         |   | 14,500 |   |
| Consumer loans                                                    |   |                   | 9,797   |   |         |   | 10,636 |   |
|         Total loans       |   | $                      | 203,275 |   |         | $      | 202,683 |   |

----

|   | · | Residential real estate loans are loans made to borrowers for the purchase of residential dwellings. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Commercial real estate loans are loans made to business entities for the purchase of real estate and buildings that will be used in the business. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Farmland loans are loans made to farming entities to acquire land used for agricultural purposes such as in the cultivation of crops or livestock. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Construction and land development loans are loans made to individuals or developers in order to construct homes, develop raw land into buildable acreage, or for commercial construction purposes. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Commercial and industrial loans are loans made to small and medium-sized businesses for any number of reasons especially working capital. Loans are typically secured by inventory, business equipment, furniture or receivables and they are frequently guaranteed by principals of the business. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Consumer loans are loans made to individuals and the loans may be secured by personal property or be unsecured. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

----

----

|                                                                          |   | Loans             |   | Loans           |   |   |                |   |   |    |   |   |   |   Accruing Loans1 |   |            |
|-------------------------------------------------------------------------------|--------|-------------------|--------|-----------------|--------|--------|---------------------|--------|--------|---------|--------|--------|--------|-----------------------------|--------|-----------------|
|                                                                          |   | 30 - 89 Days |   | 90 or More Days |   |   | Total Past Due |   |   | Current |   |   | Total  |                        |   | 90 or More Days |   |   | Nonaccrual1 |   |
| At March 31, 2011                                                             |   | Past Due          |   | Past Due        |   |   | Loans               |   |   | Loans   |   |   | Loans  |                        |   | Loans           |   |   | Loans |   |
| Residential Real Estate:                                                      |   | (In thousands)    |   |
|     1-4 family                                            |   | $                 | 2,885  |            | $      | 1,459  |                |   | $      | 4,344   |   |   | $      | 87,088                      |   |            | $ | 91,432 |   |   | $ | 43 |   |   | $ | 1,955 |   |
|     Home equity                                           |   |              | 89     |            |   | 49     |                |   |   | 138     |   |   |   | 10,840                      |   |            |   | 10,978 |   |   |   | - |   |   |   | 49 |   |
| Commercial Real Estate                                                        |   |              |   |            |   |   |                |   |   |    |   |   |   |                        |   |            |   |   |   |   |   |   |   |   |   |   |   |
|     Owner occupied                                        |   |              | -      |            |   | 628    |                |   |   | 628     |   |   |   | 24,926                      |   |            |   | 25,554 |   |   |   |   |   |   |   | 627 |   |
|     Non-owner occupied                                    |   |              | 197    |            |   | 512    |                |   |   | 709     |   |   |   | 27,120                      |   |            |   | 27,829 |   |   |   |   |   |   |   | 512 |   |
| Farmland                                                                      |   |              | -      |            |   | 9      |                |   |   | 9       |   |   |   | 8,598                       |   |            |   | 8,607 |   |   |   | - |   |   |   | 9 |   |
| Construction                                                                  |   |              | 16     |            |   | 229    |                |   |   | 245     |   |   |   | 13,941                      |   |            |   | 14,186 |   |   |   | - |   |   |   | 245 |   |
| Total real estate                                                             |   |              | 3,187  |            |   | 2,886  |                |   |   | 6,073   |   |   |   | 172,513                     |   |            |   | 178,586 |   |   |   | 43 |   |   |   | 3,397 |   |
| Commercial and industrial                                                     |   |              | 299    |            |   | 167    |                |   |   | 466     |   |   |   | 14,426                      |   |            |   | 14,892 |   |   |   | - |   |   |   | 237 |   |
| Consumer                                                                      |   |              | 166    |            |   | 16     |                |   |   | 182     |   |   |   | 9,615                       |   |            |   | 9,797 |   |   |   | - |   |   |   | 89 |   |
|                                                                          |   |              |   |            |   |   |                |   |   |    |   |   |   |                        |   |            |   |   |   |   |   |   |   |   |   |   |   |
|            Total loans |   | $                 | 3,652  |            | $      | 3,069  |                |   | $      | 6,721   |   |   | $      | 196,554                     |   |            | $ | 203,275 |   |   | $ | 43 |   |   | $ | 3,723 |   |

|                                                                          |   | Loans             |   | Loans           |   |   |                |   |   |    |   |   |   |   Accruing Loans1 |   |            |
|-------------------------------------------------------------------------------|--------|-------------------|--------|-----------------|--------|--------|---------------------|--------|--------|---------|--------|--------|--------|-----------------------------|--------|-----------------|
|                                                                          |   | 30 - 89 Days |   | 90 or More Days |   |   | Total Past Due |   |   | Current |   |   | Total  |                        |   | 90 or More Days |   |   | Nonaccrual1 |   |
| At December 31, 2010                                                          |   | Past Due          |   | Past Due        |   |   | Loans               |   |   | Loans   |   |   | Loans  |                        |   | Loans           |   |   | Loans |   |
| Residential Real Estate:                                                      |   | (In thousands)    |   |
|     1-4 family                                            |   | $                 | 3,347  |            | $      | 789    |                |   | $      | 4,136   |   |   | $      | 88,384                      |   |            | $ | 92,520 |   |   | $ | 28 |   |   | $ | 1,788 |   |
|     Home equity                                           |   |              | 30     |            |   | 49     |                |   |   | 79      |   |   |   | 10,737                      |   |            |   | 10,816 |   |   |   | - |   |   |   | 49 |   |
| Commercial Real Estate                                                        |   |              |   |            |   |   |                |   |   |    |   |   |   |                        |   |            |   |   |   |   |   |   |   |   |   |   |   |
|     Owner occupied                                        |   |              | 60     |            |   | 636    |                |   |   | 696     |   |   |   | 23,188                      |   |            |   | 23,884 |   |   |   |   |   |   |   | 637 |   |
|     Non-owner occupied                                    |   |              | 58     |            |   | 815    |                |   |   | 873     |   |   |   | 27,724                      |   |            |   | 28,597 |   |   |   |   |   |   |   | 815 |   |
| Farmland                                                                      |   |              | -      |            |   | 11     |                |   |   | 11      |   |   |   | 8,776                       |   |            |   | 8,787 |   |   |   | - |   |   |   | 10 |   |
| Construction                                                                  |   |              | 195    |            |   | 182    |                |   |   | 377     |   |   |   | 12,566                      |   |            |   | 12,943 |   |   |   | - |   |   |   | 182 |   |
| Total real estate                                                             |   |              | 3,690  |            |   | 2,482  |                |   |   | 6,172   |   |   |   | 171,375                     |   |            |   | 177,547 |   |   |   | 28 |   |   |   | 3,481 |   |
| Commercial and industrial                                                     |   |              | 320    |            |   | 316    |                |   |   | 636     |   |   |   | 13,864                      |   |            |   | 14,500 |   |   |   | 89 |   |   |   | 302 |   |
| Consumer                                                                      |   |              | 96     |            |   | 38     |                |   |   | 134     |   |   |   | 10,502                      |   |            |   | 10,636 |   |   |   | - |   |   |   | 53 |   |
|                                                                          |   |              |   |            |   |   |                |   |   |    |   |   |   |                        |   |            |   |   |   |   |   |   |   |   |   |   |   |
|            Total loans |   | $                 | 4,106  |            | $      | 2,836  |                |   | $      | 6,942   |   |   | $      | 195,741                     |   |            | $ | 202,683 |   |   | $ | 117 |   |   | $ | 3,836 |   |

----

|                                                                          |   | Loans              |   |   |                |   |   |              |   |   |                |   |   |                   |   |
|-------------------------------------------------------------------------------|--------|--------------------|--------|--------|---------------------|--------|--------|-------------------|--------|--------|---------------------|--------|--------|------------------------|--------|
| At March 31, 2011                                                             |   | Unpaid Contractual |   |   | Total               |   |   |              |   |   | Average             |   |   | Interest               |   |
| With no related allowance                                                     |   | Principal Balance  |   |   | Recorded Investment |   |   | Related Allowance |   |   | Recorded Investment |   |   | Income Recognized |   |
| Residential Real Estate:                                                      |   | (In thousands)     |   |   |                |   |
|     1-4 family                                            |   | $                  | 155    |   |                | $      | 155    |              |   | $      | -                   |   |   | $                      | 155    |   |   | $ | 3 |   |
|     Home equity                                           |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Commercial Real Estate:                                                       |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     Owner occupied                                        |   |               | 573    |   |                |   | 528    |              |   |   | -                   |   |   |                   | 527    |   |   |   | 11 |   |
|     Non-owner occupied                                    |   |               | 1,384  |   |                |   | 1,384  |              |   |   | -                   |   |   |                   | 1,295  |   |   |   | 24 |   |
| Farmland                                                                      |   |               | 1,582  |   |                |   | 1,582  |              |   |   | -                   |   |   |                   | 1,572  |   |   |   | 28 |   |
| Construction                                                                  |   |               | 361    |   |                |   | 358    |              |   |   | -                   |   |   |                   | 390    |   |   |   | 6 |   |
| Commercial and industrial                                                     |   |               | 776    |   |                |   | 244    |              |   |   | -                   |   |   |                   | 757    |   |   |   | 15 |   |
| Consumer installment                                                          |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
|            Total loans |   | $                  | 4,831  |   |                | $      | 4,251  |              |   | $      | -                   |   |   | $                      | 4,696  |   |   | $ | 87 |   |
| With an allowance recorded                                                    |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
| Residential Real Estate:                                                      |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     1-4 family                                            |   | $                  | 949    |   |                | $      | 945    |              |   | $      | 171                 |   |   | $                      | 943    |   |   | $ | 16 |   |
|     Home equity                                           |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Commercial Real Estate:                                                       |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     Owner occupied                                        |   |               | 669    |   |                |   | 628    |              |   |   | 55                  |   |   |                   | 632    |   |   |   | 12 |   |
|     Non-owner occupied                                    |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Farmland                                                                      |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Construction                                                                  |   |               | 72     |   |                |   | 72     |              |   |   | 34                  |   |   |                   | 72     |   |   |   | 1 |   |
| Commercial and industrial                                                     |   |               | 117    |   |                |   | 84     |              |   |   | 42                  |   |   |                   | 87     |   |   |   | 1 |   |
| Consumer installment                                                          |   |               | 71     |   |                |   | 71     |              |   |   | 71                  |   |   |                   | 71     |   |   |   | 2 |   |
|            Total loans |   | $                  | 1,878  |   |                | $      | 1,800  |              |   | $      | 373                 |   |   | $                      | 1,805  |   |   | $ | 32 |   |
| Total impaired loans1                                                         |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
| Residential Real Estate:                                                      |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     1-4 family                                            |   | $                  | 1,104  |   |                | $      | 1,100  |              |   | $      | 171                 |   |   | $                      | 1,098  |   |   | $ | 19 |   |
|     Home equity                                           |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Commercial Real Estate:                                                       |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|         Owner occupied                |   |               | 1,242  |   |                |   | 1,156  |              |   |   | 55                  |   |   |                   | 1,159  |   |   |   | 23 |   |
|         Non-owner occupied            |   |               | 1,384  |   |                |   | 1,384  |              |   |   | -                   |   |   |                   | 1,295  |   |   |   | 24 |   |
| Farmland                                                                      |   |               | 1,582  |   |                |   | 1,582  |              |   |   | -                   |   |   |                   | 1,572  |   |   |   | 28 |   |
| Construction                                                                  |   |               | 433    |   |                |   | 430    |              |   |   | 34                  |   |   |                   | 462    |   |   |   | 7 |   |
| Commercial and industrial                                                     |   |               | 893    |   |                |   | 328    |              |   |   | 42                  |   |   |                   | 844    |   |   |   | 16 |   |
| Consumer installment                                                          |   |               | 71     |   |                |   | 71     |              |   |   | 71                  |   |   |                   | 71     |   |   |   | 2 |   |
|            Total loans |   | $                  | 6,709  |   |                | $      | 6,051  |              |   | $      | 373                 |   |   | $                      | 6,501  |   |   | $ | 119 |   |

----

|                                                                          |   | Loans              |   |   |                |   |   |              |   |   |                |   |   |                   |   |
|-------------------------------------------------------------------------------|--------|--------------------|--------|--------|---------------------|--------|--------|-------------------|--------|--------|---------------------|--------|--------|------------------------|--------|
| At December 31, 2010                                                          |   | Unpaid Contractual |   |   | Total               |   |   |              |   |   | Average             |   |   | Interest               |   |
| With no related allowance                                                     |   | Principal Balance  |   |   | Recorded Investment |   |   | Related Allowance |   |   | Recorded Investment |   |   | Income Recognized |   |
| Residential Real Estate:                                                      |   | (In thousands)     |   |   |                |   |
|     1-4 family                                            |   | $                  | -      |   |                | $      | -      |              |   | $      | -                   |   |   | $                      | -      |   |   | $ | - |   |
|     Home equity                                           |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Commercial Real Estate:                                                       |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     Owner occupied                                        |   |               | 881    |   |                |   | 825    |              |   |   | -                   |   |   |                   | 850    |   |   |   | 66 |   |
|     Non-owner occupied                                    |   |               | 1,386  |   |                |   | 1,386  |              |   |   | -                   |   |   |                   | 1,390  |   |   |   | 97 |   |
| Farmland                                                                      |   |               | 1,546  |   |                |   | 1,546  |              |   |   | -                   |   |   |                   | 2,081  |   |   |   | 145 |   |
| Construction                                                                  |   |               | 412    |   |                |   | 409    |              |   |   | -                   |   |   |                   | 415    |   |   |   | 27 |   |
| Commercial and industrial                                                     |   |               | 835    |   |                |   | 303    |              |   |   | -                   |   |   |                   | 914    |   |   |   | 70 |   |
| Consumer installment                                                          |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
|            Total loans |   | $                  | 5,060  |   |                | $      | 4,469  |              |   | $      | -                   |   |   | $                      | 5,650  |   |   | $ | 405 |   |
| With an allowance recorded                                                    |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
| Residential Real Estate:                                                      |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     1-4 family                                            |   | $                  | 653    |   |                | $      | 649    |              |   | $      | 113                 |   |   | $                      | 640    |   |   | $ | 44 |   |
|     Home equity                                           |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Commercial Real Estate:                                                       |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     Owner occupied                                        |   |               | 669    |   |                |   | 637    |              |   |   | 56                  |   |   |                   | 639    |   |   |   | 30 |   |
|     Non-owner occupied                                    |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Farmland                                                                      |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Construction                                                                  |   |               | 63     |   |                |   | 63     |              |   |   | 24                  |   |   |                   | 63     |   |   |   | 4 |   |
| Commercial and industrial                                                     |   |               | 121    |   |                |   | 90     |              |   |   | 45                  |   |   |                   | 100    |   |   |   | 6 |   |
| Consumer installment                                                          |   |               | 8      |   |                |   | 8      |              |   |   | 1                   |   |   |                   | 8      |   |   |   | 1 |   |
|            Total loans |   | $                  | 1,514  |   |                | $      | 1,447  |              |   | $      | 239                 |   |   | $                      | 1,450  |   |   | $ | 85 |   |
| Total impaired loans1                                                         |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
| Residential Real Estate:                                                      |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|     1-4 family                                            |   | $                  | 653    |   |                | $      | 649    |              |   | $      | 113                 |   |   | $                      | 640    |   |   | $ | 44 |   |
|     Home equity                                           |   |               | -      |   |                |   | -      |              |   |   | -                   |   |   |                   | -      |   |   |   | - |   |
| Commercial Real Estate:                                                       |   |               |   |   |                |   |   |              |   |   |                |   |   |                   |   |   |   |   |   |   |
|         Owner occupied                |   |               | 1,550  |   |                |   | 1,462  |              |   |   | 56                  |   |   |                   | 1,489  |   |   |   | 96 |   |
|         Non-owner occupied            |   |               | 1,386  |   |                |   | 1,386  |              |   |   | -                   |   |   |                   | 1,390  |   |   |   | 97 |   |
| Farmland                                                                      |   |               | 1,546  |   |                |   | 1,546  |              |   |   | -                   |   |   |                   | 2,081  |   |   |   | 145 |   |
| Construction                                                                  |   |               | 475    |   |                |   | 472    |              |   |   | 24                  |   |   |                   | 478    |   |   |   | 31 |   |
| Commercial and industrial                                                     |   |               | 956    |   |                |   | 393    |              |   |   | 45                  |   |   |                   | 1,014  |   |   |   | 76 |   |
| Consumer installment                                                          |   |               | 8      |   |                |   | 8      |              |   |   | 1                   |   |   |                   | 8      |   |   |   | 1 |   |
|            Total loans |   | $                  | 6,574  |   |                | $      | 5,916  |              |   | $      | 239                 |   |   | $                      | 7,100  |   |   | $ | 490 |   |

|                                                                                                                                                                             |   |   |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| 1TDR's (Troubled Debt Restructurings) included in the impaired loan tables above at March 31, 2011 and December 31, 2010 totaled $1.669 million and $1.720 million respectively. |
|                                                                                                                                                                             |   |   |

----

----

|                                                                          |   |           |    |   |   |   |   | Special |   |   |        |   |   |     |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------|--------|----------------|---------|--------|--------|--------|--------|---------|--------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|--------|--------|--------|
| At March 31, 2011                                                             |   | Pass           |    |   | Watch  |   |   | Mention |   |   | Substandard |   |   | Doubtful |   |   | Loss   |   |   | Total  |   |
| Residential Real Estate:                                                      |   | (In thousands) |    |
|     1-4 family                                            |   | $              | 84,934  |   |   | $      | 1,758  |    |   | $      | 1,123       |   |   | $        | 3,582  |   |   | $      | 35     |   |   | $ | - |   |   | $ | 91,432 |   |
|     Home equity                                           |   |           | 10,382  |   |   |   | 205    |    |   |   | 42          |   |   |     | 349    |   |   |   | -      |   |   |   | - |   |   |   | 10,978 |   |
| Commercial Real Estate:                                                       |   |           |    |   |   |   |   |    |   |   |        |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Owner occupied                                        |   |           | 23,296  |   |   |   | 856    |    |   |   | 754         |   |   |     | 528    |   |   |   | 120    |   |   |   | - |   |   |   | 25,554 |   |
|     Non-owner occupied                                    |   |           | 24,793  |   |   |   | 1,038  |    |   |   | 1,433       |   |   |     | 564    |   |   |   | -      |   |   |   | - |   |   |   | 27,828 |   |
| Farmland                                                                      |   |           | 7,018   |   |   |   | -      |    |   |   | -           |   |   |     | 1,589  |   |   |   | -      |   |   |   | - |   |   |   | 8,607 |   |
| Construction                                                                  |   |           | 13,418  |   |   |   | 121    |    |   |   | 162         |   |   |     | 413    |   |   |   | 72     |   |   |   | - |   |   |   | 14,186 |   |
|     Total real estate loans                               |   |           | 163,841 |   |   |   | 3,978  |    |   |   | 3,514       |   |   |     | 7,025  |   |   |   | 227    |   |   |   | - |   |   |   | 178,585 |   |
| Commercial and industrial                                                     |   |           | 11,838  |   |   |   | 2,615  |    |   |   | 111         |   |   |     | 258    |   |   |   | 70     |   |   |   | - |   |   |   | 14,892 |   |
| Consumer                                                                      |   |           | 9,639   |   |   |   | 14     |    |   |   | 16          |   |   |     | 125    |   |   |   | 4      |   |   |   | - |   |   |   | 9,798 |   |
|                                                                          |   |           |    |   |   |   |   |    |   |   |        |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total loans |   | $              | 185,318 |   |   | $      | 6,607  |    |   | $      | 3,641       |   |   | $        | 7,408  |   |   | $      | 301    |   |   | $ | - |   |   | $ | 203,275 |   |

|                                                                          |   |           |    |   |   |   |   | Special |   |   |        |   |   |     |   |   |   |   |   |   |   |
|-------------------------------------------------------------------------------|--------|----------------|---------|--------|--------|--------|--------|---------|--------|--------|-------------|--------|--------|----------|--------|--------|--------|--------|--------|--------|--------|
| At December 31, 2010                                                          |   | Pass           |    |   | Watch  |   |   | Mention |   |   | Substandard |   |   | Doubtful |   |   | Loss   |   |   | Total  |   |
| Residential Real Estate:                                                      |   | (In thousands) |    |
|     1-4 family                                            |   | $              | 86,147  |   |   | $      | 1,428  |    |   | $      | 1,233       |   |   | $        | 3,662  |   |   | $      | 50     |   |   | $ | - |   |   | $ | 92,520 |   |
|     Home equity                                           |   |           | 10,219  |   |   |   | 205    |    |   |   | 43          |   |   |     | 349    |   |   |   | -      |   |   |   | - |   |   |   | 10,816 |   |
| Commercial Real Estate:                                                       |   |           |    |   |   |   |   |    |   |   |        |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|     Owner occupied                                        |   |           | 21,410  |   |   |   | 1,058  |    |   |   | 759         |   |   |     | 536    |   |   |   | 121    |   |   |   | - |   |   |   | 23,884 |   |
|     Non-owner occupied                                    |   |           | 25,438  |   |   |   | 848    |    |   |   | 1,438       |   |   |     | 873    |   |   |   | -      |   |   |   | - |   |   |   | 28,597 |   |
| Farmland                                                                      |   |           | 7,230   |   |   |   | -      |    |   |   | -           |   |   |     | 1,557  |   |   |   | -      |   |   |   | - |   |   |   | 8,787 |   |
| Construction                                                                  |   |           | 12,236  |   |   |   | 72     |    |   |   | 163         |   |   |     | 472    |   |   |   | -      |   |   |   | - |   |   |   | 12,943 |   |
|     Total real estate loans                               |   |           | 162,680 |   |   |   | 3,611  |    |   |   | 3,636       |   |   |     | 7,449  |   |   |   | 171    |   |   |   | - |   |   |   | 177,547 |   |
| Commercial and industrial                                                     |   |           | 11,491  |   |   |   | 2,505  |    |   |   | 111         |   |   |     | 319    |   |   |   | 74     |   |   |   | - |   |   |   | 14,500 |   |
| Consumer                                                                      |   |           | 10,524  |   |   |   | 12     |    |   |   | 12          |   |   |     | 88     |   |   |   | -      |   |   |   | - |   |   |   | 10,636 |   |
|                                                                          |   |           |    |   |   |   |   |    |   |   |        |   |   |     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|            Total loans |   | $              | 184,695 |   |   | $      | 6,128  |    |   | $      | 3,759       |   |   | $        | 7,856  |   |   | $      | 245    |   |   | $ | - |   |   | $ | 202,683 |   |

----

----

----

|                                                                  |   | Residential Real Estate |    |   | Commercial Real Estate |   |   | Farmland |   |   | Construction |   |   | Commercial and Industrial |   |   | Consumer |   |   | Unallocated |   |   | Total  |   |
|-----------------------------------------------------------------------|--------|------------------------------|---------|--------|----------------------------------|--------|--------|----------|--------|--------|--------------|--------|--------|-------------------------------------|--------|--------|----------|--------|--------|-------------|--------|--------|--------|--------|
| March 31, 2011                                                        |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |
| Beginning balance                                                     |   | $                            | 876     |   |                             | $      | 535    |     |   | $      | 25           |   |   | $                                   | 203    |   |     | $      | 224    |        |   | $      | 56     |   |   | $ | 249 |   |   | $ | 2,168 |   |
| Provision for possible losses                                         |   |                         | 58      |   |                             |   | 27     |     |   |   | (1           | )      |   |                                | 80     |   |     |   | 37     |        |   |   | 74     |   |   |   | (126 | ) |   |   | 149 |   |
| Charge-offs                                                           |   |                         | -       |   |                             |   | -      |     |   |   | -            |   |   |                                | (28    | )      |     |   | (25    | )           |   |   | -      |   |   |   | - |   |   |   | (53 | ) |
| Recoveries                                                            |   |                         | 2       |   |                             |   | -      |     |   |   | -            |   |   |                                | -      |   |     |   | -      |        |   |   | 7      |   |   |   | - |   |   |   | 9 |   |
| Net charge-offs                                                       |   |                         | 2       |   |                             |   | -      |     |   |   | -            |   |   |                                | (28    | )      |     |   | (25    | )           |   |   | 7      |   |   |   | - |   |   |   | (44 | ) |
| Ending balance                                                        |   | $                            | 936     |   |                             | $      | 562    |     |   | $      | 24           |   |   | $                                   | 255    |   |     | $      | 236    |        |   | $      | 137    |   |   | $ | 123 |   |   | $ | 2,273 |   |
|                                                                  |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Period-end amount allocated to:                                       |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   | $                            | 171     |   |                             | $      | 55     |     |   | $      | -            |   |   | $                                   | 34     |   |     | $      | 42     |        |   | $      | 71     |   |   | $ | - |   |   | $ | 373 |   |
| Loans collectively evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   |                         | 765     |   |                             |   | 507    |     |   |   | 24           |   |   |                                | 221    |   |     |   | 194    |        |   |   | 66     |   |   |   | 123 |   |   |   | 1,900 |   |
| Ending balance                                                        |   | $                            | 936     |   |                             | $      | 562    |     |   | $      | 24           |   |   | $                                   | 255    |   |     | $      | 236    |        |   | $      | 137    |   |   | $ | 123 |   |   | $ | 2,273 |   |
|                                                                  |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total Loans                             |   | $                            | 102,410 |   |                             | $      | 53,383 |     |   | $      | 8,607        |   |   | $                                   | 14,186 |   |     | $      | 14,892 |        |   | $      | 9,797  |   |   | $ | - |   |   | $ | 203,275 |   |
|                                                                  |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   |                         | 1,100   |   |                             |   | 2,540  |     |   |   | 1,582        |   |   |                                | 430    |   |     |   | 328    |        |   |   | 71     |   |   |   | - |   |   |   | 6,051 |   |
| Loans collectively evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   |                         | 101,310 |   |                             |   | 50,843 |     |   |   | 7,025        |   |   |                                | 13,756 |   |     |   | 14,564 |        |   |   | 9,726  |   |   |   | - |   |   |   | 197,224 |   |

----

|                                                                  |   | Residential Real Estate |    |   | Commercial Real Estate |   |   | Farmland |   |   | Construction |   |   | Commercial and Industrial |   |   | Consumer |   |   | Unallocated |   |   | Total  |   |
|-----------------------------------------------------------------------|--------|------------------------------|---------|--------|----------------------------------|--------|--------|----------|--------|--------|--------------|--------|--------|-------------------------------------|--------|--------|----------|--------|--------|-------------|--------|--------|--------|--------|
| December 31, 2010                                                     |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |
| Beginning balance                                                     |   | $                            | 686     |   |                             | $      | 503    |     |   | $      | 33           |   |   | $                                   | 205    |   |     | $      | 823    |        |   | $      | 97     |   |   | $ | 326 |   |   | $ | 2,673 |   |
| Provision for possible losses                                         |   |                         | 566     |   |                             |   | 112    |     |   |   | (8           | )      |   |                                | 280    |   |     |   | (111   | )           |   |   | (12    | )      |   |   | (77 | ) |   |   | 750 |   |
| Charge-offs                                                           |   |                         | (381    | )      |                             |   | (80    | )        |   |   | -            |   |   |                                | (293   | )      |     |   | (488   | )           |   |   | (50    | )      |   |   | - |   |   |   | (1,292 | ) |
| Recoveries                                                            |   |                         | 5       |   |                             |   | -      |     |   |   | -            |   |   |                                | 11     |   |     |   | -      |        |   |   | 21     |   |   |   | - |   |   |   | 37 |   |
| Net charge-offs                                                       |   |                         | (376    | )      |                             |   | (80    | )        |   |   | -            |   |   |                                | (282   | )      |     |   | (488   | )           |   |   | (29    | )      |   |   | - |   |   |   | (1,255 | ) |
| Ending balance                                                        |   | $                            | 876     |   |                             | $      | 535    |     |   | $      | 25           |   |   | $                                   | 203    |   |     | $      | 224    |        |   | $      | 56     |   |   | $ | 249 |   |   | $ | 2,168 |   |
|                                                                  |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Period-end amount allocated to:                                       |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   | $                            | 113     |   |                             | $      | 56     |     |   | $      | -            |   |   | $                                   | 24     |   |     | $      | 45     |        |   | $      | 1      |   |   | $ | - |   |   | $ | 239 |   |
| Loans collectively evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   |                         | 763     |   |                             |   | 479    |     |   |   | 25           |   |   |                                | 179    |   |     |   | 179    |        |   |   | 55     |   |   |   | 249 |   |   |   | 1,929 |   |
| Ending balance                                                        |   | $                            | 876     |   |                             | $      | 535    |     |   | $      | 25           |   |   | $                                   | 203    |   |     | $      | 224    |        |   | $      | 56     |   |   | $ | 249 |   |   | $ | 2,168 |   |
|                                                                  |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|      Total Loans                             |   | $                            | 103,336 |   |                             | $      | 52,481 |     |   | $      | 8,787        |   |   | $                                   | 12,943 |   |     | $      | 14,500 |        |   | $      | 10,636 |   |   | $ | - |   |   | $ | 202,683 |   |
|                                                                  |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
| Loans individually evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   |                         | 649     |   |                             |   | 2,848  |     |   |   | 1,546        |   |   |                                | 472    |   |     |   | 393    |        |   |   | 8      |   |   |   | - |   |   |   | 5,916 |   |
| Loans collectively evaluated                                          |   |                         |    |   |                             |   |   |     |   |   |         |   |   |                                |   |   |     |   |   |        |   |   |   |   |   |   |   |   |   |   |   |   |
|           for impairment |   |                         | 102,687 |   |                             |   | 49,633 |     |   |   | 7,241        |   |   |                                | 12,471 |   |     |   | 14,107 |        |   |   | 10,628 |   |   |   | - |   |   |   | 196,767 |   |

----

|                           |   | March 31,              |   |   | December 31, |   |
|--------------------------------|--------|------------------------|--------|--------|--------------|--------|
|                           |   | 2011                   |   |   | 2010         |   |
|                           |   | (Dollars in thousands) |   |
| Balance at beginning of period |   | $                      | 3,425  |   |         | $      | 1,073 |   |
| Additions                      |   |                   | 135    |   |         |   | 2,635 |   |
| Impairments                    |   |                   | -      |   |         |   | (76 | ) |
| Disposals                      |   |                   | (35    | )      |         |   | (207 | ) |
| Balance at end of period       |   | $                      | 3,525  |   |         | $      | 3,425 |   |

|                            |   | Three Months Ended     |   |
|---------------------------------|--------|------------------------|--------|
|                            |   | March 31,              |   |
|                            |   | 2011                   |   |   | 2010 |   |
|                            |   | (Dollars in thousands) |   |
| Net (gain) on sales of          |   |                   |   |   |   |   |
|    real estate   |   | $                      | (7     | ) |   | $ | - |   |
| Impairment                      |   |                   | -      |   |   |   | - |   |
| Operating expenses, net of      |   |                   |   |   |   |   |   |   |
|    rental income |   |                   | 12     |   |   |   | 3 |   |
|                            |   | $                      | 5      |   |   | $ | 3 |   |

|                                              |   | March 31,              |   |   | December 31, |   |
|---------------------------------------------------|--------|------------------------|--------|--------|--------------|--------|
|                                              |   | 2011                   |   |   | 2010         |   |
|                                              |   | (Dollars in thousands) |   |
| Five-year / two-year convertible advance at 2.47% |   |                   |   |   |         |   |
|    maturing February 5, 2013       |   | $                      | 5,000  |   |         | $      | 5,000 |   |

----

|                               | Three Months Ended |       |
|------------------------------------|--------------------|------------|
|                               |               | March 31,  |   |
| (Dollars in thousands)             |               | 2011       |   | 2010 |   |
|                               |               |       |   |   |   |
| Service cost                       |               |  $75  |   |  $69 |   |
| Interest Cost                      |               |  71   |   |  66 |   |
| Expected return on plan assets     |               |  (81) |   |  (73) |   |
| Amortization of prior service cost |               |  (24) |   |  (24) |   |
| Amortization of net actuarial loss |               |  22   |   |  19 |   |
| Net periodic benefit cost          |               |  $63  |   |  $57 |   |

----

|                                            |   | March 31, 2011                     |    |   | December 31, 2010 |   |
|-------------------------------------------------|--------|------------------------------------|---------|--------|-------------------|--------|
|                                            |   | Carrying                           |    |   | Fair              |   |   | Carrying |   |   | Fair |   |
|                                            |   | Amount                             |    |   | Value             |   |   | Amount |   |   | Value |   |
|                                            |   |   (Dollars in thousands) |    |
| Financial assets:                               |   |                               |    |   |              |   |   |   |   |   |   |   |
|    Cash and cash equivalents     |   | $                                  | 19,037  |   |              | $      | 19,037 |   |   | $ | 22,744 |   |   | $ | 22,744 |   |
|    Securities available for sale |   |                               | 86,852  |   |              |   | 86,852 |   |   |   | 82,745 |   |   |   | 82,745 |   |
|    Loans, net                    |   |                               | 201,002 |   |              |   | 214,192 |   |   |   | 200,515 |   |   |   | 215,132 |   |
|    Accrued interest receivable   |   |                               | 1,707   |   |              |   | 1,707 |   |   |   | 1,816 |   |   |   | 1,816 |   |
|                                            |   |                               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                          |   |                               |    |   |              |   |   |   |   |   |   |   |   |   |   |   |
|    Deposits                      |   | $                                  | 275,937 |   |              | $      | 274,115 |   |   | $ | 277,988 |   |   | $ | 279,598 |   |
|    Other borrowings              |   |                               | 11,514  |   |              |   | 11,587 |   |   |   | 10,149 |   |   |   | 10,346 |   |
|    Accrued interest payable      |   |                               | 909     |   |              |   | 909 |   |   |   | 887 |   |   |   | 887 |   |

| Level 1 | inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
|---------|---------------------------------------------------------------------------------------------------------------------------|

| Level 2 | inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Level 3 | inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
|---------|-----------------------------------------------------------------------------------------------------|

----

|                                                               |   |                   |   |   | Fair Value Measurements at March 31, 2011 Using |
|--------------------------------------------------------------------|--------|------------------------|--------|--------|-------------------------------------------------|
|                                                               |   |                   |   |   | Quoted Prices                                   |   |   |   |   |   |   |   |
|                                                               |   |                   |   |   | in Active                                       |   |   | Significant |   |   |   |   |
|                                                               |   |                   |   |   | Markets for                                     |   |   | Other |   |   | Signigicant |   |
|                                                               |   | Balance as of          |   |   | Identical                                       |   |   | Observable |   |   | Unobservable |   |
|                                                               |   | March 31,              |   |   | Assets                                          |   |   | Inputs |   |   | Inputs |   |
| Description                                                        |   | 2011                   |   |   | (Level 1)                                       |   |   | (Level 2) |   |   | (Level 3) |   |
|                                                               |   | (Dollars in thousands) |   |
| Assets:                                                            |   |                   |   |   |                                            |   |   |   |   |   |   |   |
|   Securities available                                   |   |                   |   |   |                                            |   |   |   |   |   |   |   |
|      for sale                             |   |                   |   |   |                                            |   |   |   |   |   |   |   |
|       U.S. Government                |   |                   |   |   |                                            |   |   |   |   |   |   |   |
|         and federal agency |   | $                      | 18,607 |   |                                            | $ | - |   |   | $ | 18,607 |   |   | $ | - |   |
|       State and municipal            |   |                   | 28,556 |   |                                            |   | - |   |   |   | 28,556 |   |   |   | - |   |
|       Agency mortgage-backed         |   |                   | 36,740 |   |                                            |   | - |   |   |   | 36,740 |   |   |   | - |   |
|       Non-agency mortgage-backed     |   |                   | 2,131  |   |                                            |   | - |   |   |   | 2,131 |   |   |   | - |   |
|       Corporate                      |   |                   | 818    |   |                                            |   | - |   |   |   | 818 |   |   |   | - |   |
|                                                               |   |                   |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |   |                   |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|                                                               |   |                   |   |   |                                            | Fair Value Measurements at December 31, 2010 Using |
|                                                               |   |                   |   |   |                                            | Quoted Prices |   |   |   |   |   |   |   |   |   |
|                                                               |   |                   |   |   |                                            | in Active |   |   | Significant |   |   |   |   |   |
|                                                               |   |                   |   |   |                                            | Markets for |   |   | Other |   |   | Signigicant |   |
|                                                               |   | Balance as of          |   |   | Identical                                       |   |   | Observable |   |   | Unobservable |   |
|                                                               |   | December 31,           |   |   | Assets                                          |   |   | Inputs |   |   | Inputs |   |
| Description                                                        |   |                   | 2010   |   |                                            | (Level 1) |   |   | (Level 2) |   |   | (Level 3) |   |
|                                                               |   | (Dollars in thousands) |   |
| Assets:                                                            |   |                   |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|   Securities available                                   |   |                   |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|      for sale                             |   |                   |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|       U.S. Government                |   |                   |   |   |                                            |   |   |   |   |   |   |   |   |   |   |   |
|         and federal agency |   | $                      | 16,705 |   |                                            | $ | - |   |   | $ | 16,705 |   |   | $ | - |   |
|       State and municipal            |   |                   | 28,704 |   |                                            |   | - |   |   |   | 28,704 |   |   |   | - |   |
|       Agency mortgage-backed         |   |                   | 34,259 |   |                                            |   | - |   |   |   | 34,259 |   |   |   | - |   |
|       Non-agency mortgage-backed     |   |                   | 2,275  |   |                                            |   | - |   |   |   | 2,275 |   |   |   | - |   |
|       Corporate                      |   |                   | 801    |   |                                            |   | - |   |   |   | 801 |   |   |   | - |   |

----

|                                        |   |                   |   |   | Carrying value at March 31, 2011 |                                |
|---------------------------------------------|--------|------------------------|--------|--------|----------------------------------|-------------------------------------|
|                                        |   |                   |   |   | Quoted Prices                    |                                |   |   |   |   |   |   |
|                                        |   |                   |   |   | in Active                        |                                |   | Significant |   |   |   |   |
|                                        |   |                   |   |   | Markets for                      |                                |   | Other |   |   | Significant |   |
|                                        |   | Balance as of          |   |   | Identical                        |                                |   | Observable |   |   | Unobservable |   |
|                                        |   | March 31,              |   |   | Assets                           |                                |   | Inputs |   |   | Inputs |   |
| Description                                 |   | 2011                   |   |   | (Level 1)                        |                                |   | (Level 2) |   |   | (Level 3) |   |
|                                        |   | (Dollars in thousands) |   |   |                             |                                |   |   |   |   |   |   |
| Assets:                                     |   |                   |   |   |                             |                                |   |   |   |   |   |   |
|   Impaired Loans, net of          |   | $                      | 1,427  |   |                             | $                                   | - |   |   | $ | 1,427 |   |   | $ | - |   |
|     valuation allowance |   |                   |   |   |                             |                                |   |   |   |   |   |   |   |   |   |   |
|   Other real estate owned         |   | $                      | 3,525  |   |                             | $                                   | - |   |   | $ | 3,485 |   |   | $ | 40 |   |
|                                        |   |                   |   |   |                             |                                |   |   |   |   |   |   |   |   |   |   |
|                                        |   |                   |   |   |                             |                                |   |   |   |   |   |   |   |   |   |   |
|                                        |   |                   |   |   |                             | Carrying value at December 31, 2010 |   |
|                                        |   |                   |   |   |                             | Quoted Prices                       |   |   |   |   |   |   |   |   |   |
|                                        |   |                   |   |   |                             | in Active                           |   |   | Significant |   |   |   |   |   |
|                                        |   |                   |   |   |                             | Markets for                         |   |   | Other |   |   | Significant |   |
|                                        |   | Balance as of          |   |   | Identical                        |                                |   | Observable |   |   | Unobservable |   |
|                                        |   | December 31,           |   |   | Assets                           |                                |   | Inputs |   |   | Inputs |   |
| Description                                 |   |                   | 2010   |   |                             | (Level 1)                           |   |   | (Level 2) |   |   | (Level 3) |   |
|                                        |   | (Dollars in thousands) |   |   |                             |                                |   |   |   |   |   |   |   |   |   |
| Assets:                                     |   |                   |   |   |                             |                                |   |   |   |   |   |   |   |   |   |   |
|   Impaired Loans, net of          |   | $                      | 1,208  |   |                             | $                                   | - |   |   | $ | 1,043 |   |   | $ | 165 |   |
|     valuation allowance |   |                   |   |   |                             |                                |   |   |   |   |   |   |   |   |   |   |
|   Other real estate owned         |   | $                      | 3,425  |   |                             | $                                   | - |   |   | $ | 2,925 |   |   | $ | 500 |   |
|                                        |   |                   |   |   |                             |                                |   |   |   |   |   |   |   |   |   |   |

----

----

----

|   | · | changes in general economic and business conditions in our market area; |
|--------|--------|-------------------------------------------------------------------------|

|   | · | level of market interest rates; |
|--------|--------|---------------------------------|

|   | · | risks inherent in making loans such as repayment risks and fluctuating collateral values; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Government intervention in the U.S. financial system; |
|--------|--------|-------------------------------------------------------|

|   | · | The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, and securities) with which the Company and the Bank must comply; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | successfully manage the Company’s growth and implement its growth strategies; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | the successful management of interest rate risk; including changes in interest rates and interest rate policies; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | the value of securities held in the Company’s investment portfolio; |
|--------|--------|---------------------------------------------------------------------------|

|   | · | rely on the Company’s Management team, including its ability to attract and retain key personnel; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | continue to attract low cost core deposits to fund asset growth; |
|--------|--------|------------------------------------------------------------------|

|   | · | changes in banking regulations, generally accepted accounting principles and; |
|--------|--------|-------------------------------------------------------------------------------|

|   | · | compete with other banks and financial institutions and companies outside of the banking industry, including those companies that have substantially greater access to capital and other resources; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | the ability to rely on third party vendors that perform critical services for the Company; |
|--------|--------|--------------------------------------------------------------------------------------------|

|   | · | technology utilized by the Company; |
|--------|--------|-------------------------------------|

|   | · | maintain expense controls and asset qualities as new branches are opened or acquired; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | demand, development and acceptance of new products and services; |
|--------|--------|------------------------------------------------------------------|

|   | · | The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | maintain capital levels adequate to support the Company’s growth; and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | plan for changing trends in customer profiles and behavior. |
|--------|--------|-------------------------------------------------------------|

----

----

----

----

----

|   | · | A decrease in the provision for loan losses of $150 thousand. |
|--------|--------|---------------------------------------------------------------|

|   | · | A decrease in interest expense of $148 thousand. |
|--------|--------|--------------------------------------------------|

|   | · | An increase in non-interest income of $6 thousand. |
|--------|--------|----------------------------------------------------|

|   | · | A decrease of $93 thousand in interest income due to the mix of earning assets which produced lower earning asset yields. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------|

|   | · | An increase in non-interest expense of $66 thousand. |
|--------|--------|------------------------------------------------------|

|   | · | An increase in income taxes of $19 thousand as a result of the higher pre-tax income. The effective income tax rate for the three months ended March 31, 2011 of 22.98% as compared to 24.75% for the three months ended March 31, 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Reconciliation of GAAP Net Interest Income to Tax-exempt Net Interest Income |
|------------------------------------------------------------------------------|
|                                                                         |   |   |   |   |   |   |
|                                                                         |   | Three Months Ended |
|                                                                         |   | March 31, 2011 |   |   | March 31, 2010 |   |
|                                                                         |   | (Dollars in thousands) |
| Net interest income, GAAP basis                                              |   |   | 2,974 |   |   |   | 2,919 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Tax benefit from tax-exempt securities                                       |   |   | 132 |   |   |   | 84 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Net interest income, tax-exempt basis                                        |   |   | 3,106 |   |   |   | 3,003 |   |
|                                                                         |   |   |   |   |   |   |   |   |
| Tax-exempt securities tax benefit is computed at the statutory rate of 34%.  |   |

----

----

|                                                                                            |   | Three Months Ended March 31, |    |
|-------------------------------------------------------------------------------------------------|--------|------------------------------|---------|
|                                                                                            |   | 2011                         |    |   | 2010 |   |
|                                                                                            |   | Average                      |    |   |   |   |   | Average |   |   | Average |   |   |   |   |   | Average |   |
| (Dollars in Thousands)                                                                          |   | Balance                      |    |   | Interest |   |   | Yield/Rate |   |   | Balance |   |   | Interest |   |   | Yield/Rate |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| ASSETS:                                                                                         |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest earning assets:                                                                        |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing deposits with other banks and                                                  |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    other short-term investments                                                  |   | $                            | 1,847   |   |   | $ | 4 |   |   |   | 0.88 | % |   | $ | 1,091 |   |   | $ | 4 |   |   |   | 1.39 | % |
| Loans (1)                                                                                       |   |                         | 201,985 |   |   |   | 3,241 |   |   |   | 6.51 | % |   |   | 215,749 |   |   |   | 3,420 |   |   |   | 6.43 | % |
| Investment securities available for sale  (2)                                         |   |                         | 85,528  |   |   |   | 874 |   |   |   | 4.09 | % |   |   | 72,812 |   |   |   | 742 |   |   |   | 4.08 | % |
| Federal funds sold                                                                              |   |                         | 11,578  |   |   |   | 7 |   |   |   | 0.24 | % |   |   | 7,586 |   |   |   | 5 |   |   |   | 0.24 | % |
|    Total interest earning assets                                                 |   | $                            | 300,938 |   |   | $ | 4,126 |   |   |   | 5.56 | % |   | $ | 297,238 |   |   | $ | 4,171 |   |   |   | 5.69 | % |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total average non-earning assets                                                                |   |                         | 30,435  |   |   |   |   |   |   |   |   |   |   |   | 27,832 |   |   |   |   |   |   |   |   |   |
| Less: allowance for credit losses                                                               |   |                         | 2,205   |   |   |   |   |   |   |   |   |   |   |   | 2,762 |   |   |   |   |   |   |   |   |   |
|    Net average non-earning assets                                                |   |                         | 28,230  |   |   |   |   |   |   |   |   |   |   |   | 25,070 |   |   |   |   |   |   |   |   |   |
|    TOTAL AVERAGE ASSETS                                                          |   | $                            | 329,168 |   |   |   |   |   |   |   |   |   |   | $ | 322,308 |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS'                                                                   |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|    EQUITY:                                                                       |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing liabilities:                                                                   |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Interest bearing demand                                                                         |   | $                            | 40,450  |   |   | $ | 17 |   |   |   | 0.17 | % |   | $ | 37,569 |   |   | $ | 16 |   |   |   | 0.17 | % |
| Savings                                                                                         |   |                         | 72,509  |   |   |   | 113 |   |   |   | 0.63 | % |   |   | 66,460 |   |   |   | 167 |   |   |   | 1.02 | % |
| Time deposits                                                                                   |   |                         | 129,465 |   |   |   | 852 |   |   |   | 2.67 | % |   |   | 132,177 |   |   |   | 948 |   |   |   | 2.91 | % |
| Other borrowings                                                                                |   |                         | 10,777  |   |   |   | 38 |   |   |   | 1.43 | % |   |   | 10,699 |   |   |   | 37 |   |   |   | 1.44 | % |
|    Total interest bearing liabilities                                            |   | $                            | 253,201 |   |   | $ | 1,020 |   |   |   | 1.63 | % |   | $ | 246,905 |   |   | $ | 1,168 |   |   |   | 1.92 | % |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noninterest bearing liabilities:                                                                |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Noininterest bearing demand                                                                     |   |                         | 32,757  |   |   |   |   |   |   |   |   |   |   |   | 33,322 |   |   |   |   |   |   |   |   |   |
| Other liabilities                                                                               |   |                         | 2,621   |   |   |   |   |   |   |   |   |   |   |   | 2,614 |   |   |   |   |   |   |   |   |   |
|    Total noninterest bearing liabilities                                         |   |                         | 35,378  |   |   |   |   |   |   |   |   |   |   |   | 35,936 |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stockholders' equity                                                                            |   |                         | 40,589  |   |   |   |   |   |   |   |   |   |   |   | 39,467 |   |   |   |   |   |   |   |   |   |
|    TOTAL LIABILITIES AND STOCKHOLDERS'                                           |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|        EQUITY                                                |   | $                            | 329,168 |   |   |   |   |   |   |   |   |   |   | $ | 322,308 |   |   |   |   |   |   |   |   |   |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net interest income                                                                             |   |                         |    |   |   | $ | 3,106 |   |   |   |   |   |   |   |   |   |   | $ | 3,003 |   |   |   |   |   |
| Net interest spread                                                                             |   |                         |    |   |   |   |   |   |   |   | 3.93 | % |   |   |   |   |   |   |   |   |   |   | 3.77 | % |
| Net interest margin                                                                             |   |                         |    |   |   |   |   |   |   |   | 4.19 | % |   |   |   |   |   |   |   |   |   |   | 4.10 | % |
|                                                                                            |   |                         |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (1) Includes Loans Held for Sale and average daily balance of non-accrual loans.                |   |                         |    |   |   |
| (2) Income and yield are reported on a tax equivalent basis assuming a federal tax rate of 34%. |   |                         |    |   |   |

----

|                                                          |   | Three months ended |
|---------------------------------------------------------------|--------|--------------------|
| (Dollars in thousands)                                        |   | March 31,          |   |   | March 31, |   |   | % |
|                                                          |   | 2011               |   |   | 2010 |   |   | Change |
|                                                          |   |               |   |   |   |   |   |   |
| Noninterest Income                                            |   |               |   |   |   |   |   |   |   |
|    Service charges on deposit accounts         |   | $                  | 239 |   |   | $ | 261 |   |   |   | -8.4 | % |
|    Net gain on sales of loans                  |   |               | 14 |   |   |   | 10 |   |   |   | 40.0 | % |
|    Net gain on sale of securities              |   |               | - |   |   |   | 4 |   |   |   | -100.0 | % |
|    Net gain on sale of other real estate owned |   |               | 7 |   |   |   | - |   |   |   | 100.0 | % |
|    Income from bank owned life ins.            |   |               | 72 |   |   |   | 68 |   |   |   | 5.9 | % |
|    ATM fee income                              |   |               | 182 |   |   |   | 150 |   |   |   | 21.3 | % |
|    Other income                                |   |               | 49 |   |   |   | 64 |   |   |   | -23.4 | % |
|       Total noninterest income  |   | $                  | 563 |   |   | $ | 557 |   |   |   | 1.1 | % |

|   | · | Service charges on deposit accounts decreased $22 thousand for the three months ended March 31, 2011 to $239 thousand from $261 at March 31, 2010, chiefly due to changes in the Bank’s customer behavior, revised policies regarding overdraft accounts and the continuing popularity of “totally free” checking products. The revised overdraft policies limited the daily amount of overdraft fees that a customer could be assessed, the automated closure of long-term overdrawn checking accounts, and providing customers’ information on overdraft fees charged to their account in the current cycle and for the year-to-date. Management is also exploring other deposit account changes in response to the effects of Federal regulations. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net gain on sales of loans increased $4 thousand for the three months ended March 31, 2011 to $14 thousand from $10 thousand at March 31, 2010. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | Net gain on sale of securities $4 thousand in income was realized in the three months ended March 31, 2010 as a result of Agency securities being called at par value. The Company has not sold securities during the three months ended March 31, 2011 or March 31, 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net gain on sale of real estate owned increased $7 thousand for the three months ended March 31, 2011 as compared to the three months ended March 31, 2010. The Bank did not have any property sales in the first quarter of 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | ATM fee income increased $32 thousand for the three months ended March 31, 2011 to $182 thousand from $150 thousand at March 31, 2010 as a result of increased ATM and point of sale transactions by the Bank’s customers and fees received from non-customers using the Bank’s ATMs. A portion of this increase is the result of changes management has made to the existing Bank/interchange relationships. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other income decreased $15 thousand for the three months ended March 31, 2011 to $49 thousand from $64 thousand at March 31, 2010. Other income generally consists of incidental fees and services that tend to be variable in nature. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                          |   | Three months ended |
|---------------------------------------------------------------|--------|--------------------|
| (Dollars in thousands)                                        |   | March 31,          |   |   | March 31, |   |   | % |
|                                                          |   | 2011               |   |   | 2010 |   |   | Change |
| Noninterest Expense                                           |   |               |   |   |   |   |   |   |   |
|    Salaries and employee benefits              |   | $                  | 1,369 |   |   | $ | 1,364 |   |   |   | 0.4 | % |
|    Net occupancy expense                       |   |               | 149 |   |   |   | 153 |   |   |   | -2.6 | % |
|    Equipment expense                           |   |               | 122 |   |   |   | 131 |   |   |   | -6.9 | % |
|    FDIC Insurance                              |   |               | 201 |   |   |   | 156 |   |   |   | 28.8 | % |
|    Data Processing                             |   |               | 67 |   |   |   | 75 |   |   |   | -10.7 | % |
|    Other operating expense                     |   |               | 526 |   |   |   | 489 |   |   |   | 7.6 | % |
|       Total noninterest expense |   | $                  | 2,434 |   |   | $ | 2,368 |   |   |   | 2.8 | % |

|   | · | Salaries and employee benefits increased $5 thousand for the three months ended March 31, 2011 to $1.369 million from $1.364 million at March 31, 2010. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Net occupancy expense decreased $4 thousand for the three months ended March 31, 2011 to $149 thousand from $153 thousand at March 31, 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Equipment expense decreased $9 thousand for the three months ended March 31, 2011 to $122 thousand from $131 thousand at March 31, 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | FDIC deposit insurance increased $45 thousand for the three months ended March 31, 2011 to $201 thousand from $156 thousand at March 31, 2010. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Data processing expense decreased $8 thousand for the three months ended March 31, 2011 to $67 thousand from $75 thousand at March 31, 2010. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Other operating expense increased $37 thousand for the three months ended March 31, 2011 to $526 thousand from $489 thousand at March 31, 2010. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Collateralized Lines of Credit           |   |   |       |
|------------------------------------------|--------|--------|------------|
| Federal Home Loan Bank of Atlanta        |   | $      | 45,063,472 |   |
| Federal Reserve Bank of Richmond         |   |   | 3,742,657  |   |
| Less: Outstanding advances               |   |   | (5,000,000 | ) |
| Sub-total Collateralized Lines of Credit |   | $      | 43,806,129 |   |
|                                     |   |   |       |   |
| Unsecured, Short-term Lines              |   |   |       |   |
| CenterState Bank                         |   | $      | 6,000,000  |   |
| Community Bankers Bank                   |   |   | 11,400,000 |   |
| First Tennessee Bank NA                  |   |   | 10,000,000 |   |
| Sub-total Unsecured, Short-term Lines    |   | $      | 27,400,000 |   |
|                                     |   |   |       |   |
| Total Available Lines of Credit          |   | $      | 71,206,129 |   |

----

----

|              |   |         |   |   |       |   |   | Total number     |   |   | Maximum number |   |
|-------------------|--------|--------------|--------|--------|------------|--------|--------|------------------|--------|--------|----------------|--------|
|              |   |         |   |   |       |   |   | of shares        |   |   | of shares that |   |
|              |   | Total number |   |   | Average    |   |   | purchased as     |   |   | may yet be     |   |
|              |   | of shares    |   |   | price paid |   |   | part of publicly |   |   | purchased      |   |
| Period            |   | purchased    |   |   | per share  |   |   | announced plan   |   |   | under the plan |   |
| January 1 to      |   |         |   |   |       |   |   |             |   |   |           |   |
| January 31, 2011  |   |         | 5,000  |   |       | $      | 13.00  |             |   |   | 5,000          |   |   |   | 30,000 |   |
| February 1 to     |   |         |   |   |       |   |   |             |   |   |           |   |   |   |   |   |
| February 28, 2011 |   |         | -      |   |       |   | -      |             |   |   | 0              |   |   |   | 30,000 |   |
| March 1 to        |   |         |   |   |       |   |   |             |   |   |           |   |   |   |   |   |
| March 31, 2011    |   |         | -      |   |       |   | -      |             |   |   | 0              |   |   |   | 30,000 |   |
| Total             |   |         | 5,000  |   |       | $      | 13.00  |             |   |   | 5,000          |   |   |   | 30,000 |   |

----

----

|                                      | CITIZENS BANCORP OF VIRGINIA, INC.                                                                                                                                       |
|-------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                      |                           (Registrant) |   |
|                                      |                                                                                                                                                                     |   |
|                                      |                                                                                                                                                                     |   |
| Date:    May 13, 2011 | /s/ Joseph D. Borgerding                                                                                                                                                 |   |
|                                      | Joseph D. Borgerding                                                                                                                                                     |   |
|                                      | President and Chief Executive Officer                                                                                                                                    |   |
|                                      |                                                                                                                                                                     |   |
|                                      |                                                                                                                                                                     |   |
| Date:    May 13, 2011 | /s/ Ronald E. Baron                                                                                                                                                      |   |
|                                      | Ronald E. Baron                                                                                                                                                          |   |
|                                      | Senior Vice President and Chief Financial Officer                                                                                                                        |

----

|   | 31.1   | Rule 13a-14(a) Certification of Principal Executive Officer            |
|--------|--------|------------------------------------------------------------------------|
|   |   |                                                                   |
|   | 31.2   | Rule 13a-14(a) Certification of Principal Financial Officer            |
|   |   |                                                                   |
|   | 32.1   | Statement of Principal Executive Officer Pursuant to 18 U.S.C. ss.1350 |
|   |   |                                                                   |
|   | 32.2   | Statement of Principal Financial Officer Pursuant to 18 U.S.C. ss.1350 |

----