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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

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FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OF
THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal
year ended December 31, 2007
Commission File Number: 0-28846

CENTRUE FINANCIAL CORPORATION


(Exact name of
Registrant as specified in its charter)


|                                  |  |                                  
|--------------------------------- |  | ---------------------------------
|Delaware                          |  | 36-3145350                       
|(State or other
  jurisdiction of |  | (I.R.S. Employer
  Identification
|incorporation or
  organization)  |  | Number)                          

122
West Madison Street, Ottawa, Illinois 61350
(Address of principal executive offices, including zip code)

(815)
431-2720(Registrants telephone number, including area code)

Securities
registered pursuant to Section 12(b) of the Act:

|                                 |  |                          
|-------------------------------- |  | -------------------------
|                                 |  | Name
  of Each Exchange  
|Title of Exchange Class          |  | which
  Registered       
|                                 |  |                          
|Common Stock ($1.00 par
  value) |  | The
  NASDAQ Stock Market

Securities
registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a
well-known seasoned issuer as defined in Rule 403 of the Securities Act.  Yes o No þ

Indicate by check mark if the registrant is not
required to file reports pursuant to Section 13 or Section 15 (d) of the
Exchange Act.  Yes o No þ

Indicate by check mark whether the Registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period
that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent
filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. o.

Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer, or a
smaller reporting company. See the definitions of large accelerated filer,
accelerated filer and smaller reporting company in Rule 12b-2 of the
Exchange Act.

| |                           |                               | 
| | ------------------------- | ----------------------------- | 
| | Large accelerated filer o | Accelerated filer þ           | 
| | Non-accelerated filer   o | Smaller reporting
  company o | 

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

As of February 25, 2008, the Registrant had issued and
outstanding 6,054,246 shares of the Registrants Common Stock. The aggregate
market value of the voting stock held by non-affiliates of the Registrant as of
June 30, 2007, the last business day of the Registrants most recently
completed second quarter, was $109,668,167.*

|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | Based on the last reported price of $20.05 of an
  actual transaction in the Registrants Common Stock on June 30, 2007, and
  reports of beneficial ownership filed by directors and executive officers of
  the Registrant. Shares of Common Stock held by any executive officer or
  director of the Registrant have been excluded from the foregoing computation
  because such persons may be deemed to be affiliates; provided, however, such
  determination of shares owned by affiliates does not constitute an admission
  of affiliate status or beneficial interest in shares of the Registrants
  Common Stock.

DOCUMENTS
INCORPORATED BY REFERENCE

Certain portions of the Proxy Statement for the 2008
Annual Meeting of Stockholders (the 2008 Proxy Statement) are incorporated by
reference into Part III of this Form 10-K.

As used in this report, the terms we, us, our,
Centrue and the Company mean Centrue Financial Corporation and its subsidiary,
unless the context indicates another meaning, and the term Common Stock means
our common stock, par value $1.00 per share.

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CENTRUE
FINANCIAL CORPORATIONForm
10-K Index

|         |                                                                                                                  |      | 
|-------- | ---------------------------------------------------------------------------------------------------------------- | ---- | 
|         |                                                                                                                  | Page
|         |                                                                                                                  |     
|         |                                                                                                                  |      | 
|PART I   |                                                                                                                  |      | 
|        
|Item 1.  | Business                                                                                                         | 1    | 
|Item 1A. | Risk
  Factors                                                                                                   | 12   | 
|Item 1B. | Unresolved
  Staff Comments                                                                                      | 16   | 
|Item 2.  | Properties                                                                                                       | 16   | 
|Item 3.  | Legal
  Proceedings                                                                                              | 16   | 
|Item 4.  | Submission
  of Matters to a Vote of Security Holders                                                            | 16   | 
|         |                                                                                                                  |      | 
|PART II  |                                                                                                                  |      | 
|         |                                                                                                                  |      | 
|Item 5.  | Market
  for Registrants Common Equity, Related Stockholder Matters and Issuer
  Purchases of Equity Securities | 17   | 
|Item 6.  | Selected
  Consolidated Financial Data                                                                           | 20   | 
|Item 7.  | Managements
  Discussion and Analysis of Financial Condition and Results of Operations                          | 21   | 
|Item 7A. | Quantitative
  and Qualitative Disclosures about Market Risk                                                     | 49   | 
|Item 8.  | Financial
  Statements and Supplementary Data                                                                    | 49   | 
|Item 9.  | Changes
  in and Disagreements with Accountants on Accounting and Financial Disclosure                           | 94   | 
|Item 9A. | Controls
  and Procedures                                                                                        | 94   | 
|Item 9B. | Other
  Information                                                                                              | 94   | 
|         |                                                                                                                  |      | 
|PART III |                                                                                                                  |      | 
|         |                                                                                                                  |      | 
|Item 10. | Directors,
  Executive Officers and Corporate Governance                                                         | 95   | 
|Item 11. | Executive
  Compensation                                                                                         | 95   | 
|Item 12. | Security
  Ownership of Certain Beneficial Owners and Management and Related Stockholder
  Matters               | 95   | 
|Item 13. | Certain
  Relationships and Related Transactions, and Director Independence                                      | 96   | 
|Item 14. | Principal
  Accountant Fees and Services                                                                         | 96   | 
|Item 15. | Exhibits
  and Financial Statement Schedules                                                                     | 96   | 

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

PART
I

|        |         
|------- | --------
|Item 1. | Business

THE
COMPANY

Centrue
Financial Corporation

Centrue
Financial Corporation (the Company) is a bank holding company incorporated in
Delaware in 1982 for the purpose of becoming a holding company registered under
the Bank Holding Company Act of 1956, as amended (the Act). The Company is a
publicly traded banking company with assets of $1.4 billion at year-end 2007
and is headquartered in Ottawa, Illinois.
On November 13, 2006, the Company (formerly known as UnionBancorp, Inc.
now known as Centrue Financial Corporation) merged with Centrue Financial
Corporation (former Centrue), parent of Centrue Bank with the Company being the
surviving entity in the merger. Operating results of former Centrue are
included in the consolidated financial statements since the date of the
acquisition. As a result of this merger, the Company solidified its market
share in the northern and central Illinois markets, expanded its customer base
to enhance deposit fee income, marketed additional products and services to new
customers and reduced operating costs through economies of scale.

The
Company operates one wholly owned subsidiary: Centrue Bank (the Bank),
employing 344 full-time equivalent employees at December 31, 2007. The Company
has responsibility for the overall conduct, direction, and performance of its
subsidiary. The Company provides various services, establishes Company-wide
policies and procedures, and provides other resources as needed, including
capital.

Subsidiary

At December 31, 2007, the Bank had $1.4 billion in
total assets, $1.0 billion in total deposits, and 35 offices (33 full-service
bank branches and 2 back-room sales support non-banking facilities) located in
markets extending from the far western and southern suburbs of the Chicago
metropolitan area across Central and Northern Illinois down to the metropolitan
St. Louis area.

The Bank is engaged in commercial and retail banking
and offers a broad range of lending, depository, and related financial
services, including accepting deposits; commercial and industrial, consumer,
and real estate lending; trust and asset management services; and other banking
services tailored for consumer, commercial and industrial, and public or
governmental customers.

Competition

The Companys market area is highly competitive with
numerous commercial banks, savings and loan associations and credit unions. In
addition, financial institutions, based in surrounding communities and in the
southern and western metro area of Chicago and the suburban metro area of St.
Louis, actively compete for customers within the Companys market area. The
Company also faces competition from finance companies, insurance companies,
mortgage companies, securities brokerage firms, money market funds, loan
production offices and other providers of financial services.

The Company competes for loans principally through the
range and quality of the services it provides and through competitive interest
rates and loan fees. The Company believes that its long-standing presence in
the communities it serves and personal service philosophy enhance its ability
to compete favorably in attracting and retaining individual and business
customers. The Company actively solicits deposit-related customers and competes
for deposits by offering customers personal attention, professional service and
competitive interest rates.

1.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

Under the Gramm-Leach-Bliley Act of 1999, effective
March 2000, securities firms and insurance companies that elect to become
financial holding companies may acquire banks and other financial institutions.
The Gramm-Leach-Bliley Act, and future action stemming from the Act, is
expected to continue to significantly change the competitive environment in
which the Company and Centrue Bank conduct business. The financial services
industry is also likely to become more competitive as further technological
advances enable more companies to provide financial services. These
technological advances may diminish the importance of depository institutions
and other financial intermediaries in the transfer of funds between parties.

SUPERVISION
AND REGULATION

General

Financial institutions and their holding companies are
extensively regulated under federal and state law. As a result, the growth and
earnings performance of the Company can be affected not only by management
decisions and general economic conditions, but also by the requirements of
applicable state and federal statutes and regulations and the policies of
various governmental regulatory authorities, including the Illinois Department
of Financial and Professional Regulation (the DFPR), the Board of Governors
of the Federal Reserve System (the Federal Reserve), the Federal Deposit
Insurance Corporation (the FDIC), the Internal Revenue Service and state
taxing authorities and the Securities and Exchange Commission (the SEC). The
effect of applicable statutes, regulations and regulatory policies can be
significant, and cannot be predicted with a high degree of certainty.

Federal and state laws and regulations generally
applicable to financial institutions, such as the Company and its subsidiary,
regulate, among other things, the scope of business, investments, reserves
against deposits, capital levels relative to operations, the nature and amount
of collateral for loans, the establishment of branches, mergers, consolidations
and dividends. The system of supervision and regulation applicable to the
Company and its subsidiary establishes a comprehensive framework for their
respective operations and is intended primarily for the protection of the
FDICs deposit insurance funds and the depositors, rather than the
shareholders, of financial institutions.

The following is a summary of the material elements of
the regulatory framework that applies to the Company and its subsidiaries. It
does not describe all of the statutes, regulations and regulatory policies that
apply to the Company and its subsidiaries, nor does it restate all of the
requirements of the statutes, regulations and regulatory policies that are
described. As such, the following is qualified in its entirety by reference to
the applicable statutes, regulations and regulatory policies. Any change in
applicable law, regulations or regulatory policies may have a material effect
on the business of the Company and its subsidiaries.

The
Company

General. The
Company, as the sole stockholder of Centrue Bank, is a bank holding company. As
a bank holding company, the Company is registered with, and is subject to
regulation by, the Federal Reserve under the Bank Holding Company Act, as
amended (the BHCA). In accordance with Federal Reserve policy, the Company is
expected to act as a source of financial strength to Centrue Bank and to commit resources to support Centrue Bank in circumstances where the Company might not
do so absent such policy. Under the BHCA, the Company is subject to periodic
examination by the Federal Reserve and is required to file with the Federal
Reserve periodic reports of operations and such additional information as the
Federal Reserve may require. The Company is also subject to regulation by the
DFPR under the Illinois Bank Holding Company Act, as amended.

2.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
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|                                                                         

Investments and Activities.
Under the BHCA, a bank holding company must obtain Federal Reserve approval
before: (i) acquiring, directly or indirectly, ownership or control of any
voting shares of another bank or bank holding company if, after the
acquisition, it would own or control more than 5% of the shares of the other
bank or bank holding company (unless it already owns or controls the majority
of such shares); (ii) acquiring all or substantially all of the assets of
another bank; or (iii) merging or consolidating with another bank holding
company. Subject to certain conditions (including certain deposit concentration
limits established by the BHCA), the Federal Reserve may allow a bank holding
company to acquire banks located in any state of the United States without
regard to whether the acquisition is prohibited by the law of the state in
which the target bank is located. In approving interstate acquisitions,
however, the Federal Reserve is required to give effect to applicable state law
limitations on the aggregate amount of deposits that may be held by the
acquiring bank holding company and its insured depository institution
affiliates in the state in which the target bank is located (provided that
those limits do not discriminate against out-of-state depository institutions
or their holding companies) and state laws which require that the target bank
have been in existence for a minimum period of time (not to exceed five years)
before being acquired by an out-of-state bank holding company.

The BHCA also generally prohibits the Company from
acquiring direct or indirect ownership or control of more than 5% of the voting
shares of any company which is not a bank and from engaging in any business
other than that of banking, managing and controlling banks or furnishing
services to banks and their subsidiaries. This general prohibition is subject
to a number of exceptions. The principal exception allows bank holding
companies to engage in, and to own shares of companies engaged in, certain
businesses found by the Federal Reserve to be so closely related to banking
.... as to be a proper incident thereto. Under current regulations of the
Federal Reserve, the Company is permitted to engage in a variety of
banking-related businesses, including the operation of a thrift, consumer
finance or equipment leasing business, the operation of a computer service
bureau (including software development), and the operation of mortgage banking
and brokerage businesses. The BHCA generally does not place territorial
restrictions on the domestic activities of non-bank subsidiaries of bank
holding companies.

In November, 1999, the Gramm-Leach-Bliley Act (GLB
Act) was signed into law. Under the GLB Act, bank holding companies that meet
certain standards and elect to become financial holding companies are
permitted to engage in a wider range of activities than those permitted for
bank holding companies, including securities and insurance activities.
Specifically, a bank holding company that elects to become a financial holding
company may engage in any activity that the Federal Reserve Board, in
consultation with the Secretary of the Treasury, determines is (i) financial in
nature or incidental thereto, or (ii) complementary to any such
financial-in-nature activity, provided that such complementary activity does
not pose a substantial risk to the safety and soundness of depository institutions
or the financial system generally. A bank holding company may elect to become a
financial holding company only if each of its depository institution
subsidiaries is well-capitalized, well-managed, and has a Community
Reinvestment Act rating of satisfactory or better at their most recent
examination.

The GLB Act specifies many activities that are
financial in nature, including lending, exchanging, transferring, investing for
others, or safeguarding money or securities; underwriting and selling insurance;
providing financial, investment or economic advisory services; underwriting,
dealing in, or making a market in securities; and those activities currently
permitted for bank holding companies that are so closely related to banking or
managing or controlling banks, as to be a proper incident thereto.

3.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

The GLB Act changed federal laws to facilitate
affiliation between banks and entities engaged in securities and insurance activities.
The law also established a system of functional regulation under which banking
activities, securities activities, and insurance activities conducted by
financial holding companies and their subsidiaries and affiliates will be
separately regulated by banking, securities, and insurance regulators,
respectively.

Federal law also prohibits any person or company from
acquiring control of a bank or bank holding company without prior notice to
the appropriate federal bank regulator. Control is defined in certain cases
as the acquisition of 10% or more of the outstanding shares of a bank or bank
holding company.

Capital Requirements. Bank
holding companies are required to maintain minimum levels of capital in
accordance with Federal Reserve capital adequacy guidelines. If capital falls
below minimum guideline levels, a bank holding company, among other things, may
be denied approval to acquire or establish additional banks or non-bank
businesses.

The Federal Reserves capital guidelines establish the
following minimum regulatory capital requirements for bank holding companies: a
risk-based requirement expressed as a percentage of total risk-weighted assets,
and a leverage requirement expressed as a percentage of total assets. The
risk-based requirement consists of a minimum ratio of total capital to total
risk-weighted assets of 8%, at least one-half of which must be Tier 1 capital.
The leverage requirement consists of a minimum ratio of Tier 1 capital to total
assets of 3% for the most highly rated companies, with a minimum requirement of
4% for all others. For purposes of these capital standards, Tier 1 capital
consists primarily of permanent stockholders equity less intangible assets
(other than certain mortgage servicing rights and purchased credit card
relationships). Total capital consists primarily of Tier 1 capital plus certain
other debt and equity instruments which do not qualify as Tier 1 capital and a
portion of the companys allowance for loan and lease losses.

The risk-based and leverage standards described above
are minimum requirements. Higher capital levels will be required if warranted
by the particular circumstances or by the risk profiles of individual banking
organizations. For example, the Federal Reserves capital guidelines contemplate
that additional capital may be required to take adequate account of, among
other things, interest rate risk, or the risks posed by concentrations of
credit, nontraditional activities or securities trading activities. Further,
any banking organization experiencing or anticipating significant growth would
be expected to maintain capital ratios, including tangible capital positions (i.e.,
Tier 1 capital less all intangible assets), well above the minimum levels.

4.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

As of December 31, 2007, the Company had regulatory
capital as follows:

| |         |  |               |  |               | 
| | ------- |  | ------------- |  | ------------- | 
| |         |  | Risk-Based    |  | Leverage      | 
| |         |  | Capital Ratio |  | Capital Ratio | 
| |         |  |               |  |               | 
|
| | Company |  | 10.2%         |  | 7.7%          | 

The risk-based capital ratio and the leverage capital
ratio were 2.2% and 3.7% respectively, in excess of the Federal Reserves
minimum requirements.  See Note 16 in
the Notes in Consolidated Financial Statements for further information.

Dividends.The Company is organized under the Delaware General Corporation Law (the
DGCL). The DGCL allows the Company to pay dividends only out of its surplus
(as defined and computed in accordance with the provisions of the DGCL) or if
the Company has no such surplus, out of its net profits for the fiscal year in
which the dividend is declared and/or the preceding fiscal year.

Additionally, the Federal Reserve has issued a policy
statement with regard to the payment of cash dividends by bank holding
companies. The policy statement provides that a bank holding company should not
pay cash dividends which exceed its net income or which can only be funded in
ways that weaken the bank holding companys financial health, such as by
borrowing. The Federal Reserve also possesses enforcement powers over bank
holding companies and their non-bank subsidiaries to prevent or remedy actions
that represent unsafe or unsound practices or violations of applicable statutes
and regulations. Among these powers is the ability to proscribe the payment of
dividends by banks and bank holding companies.

Federal Securities Regulation.
The Companys common stock is registered with the SEC under the Securities Act
of 1933, as amended, and the Securities Exchange Act of 1934, as amended (the
Exchange Act). Consequently, the Company is subject to the information, proxy
solicitation, insider trading and other restrictions and requirements of the
SEC under the Exchange Act.

The SEC and the NASDAQ have adopted regulations and
policies under the Sarbanes-Oxley Act of 2002 that will apply to Centrue
Financial Corporation as a registered company under the Securities Exchange Act
of 1934 and a NASDAQ-traded company. The stated goals of these Sarbanes-Oxley
requirements are to increase corporate responsibility, provide for enhanced
penalties for accounting and auditing improprieties at publicly traded
companies and to protect investors by improving the accuracy and reliability of
corporate disclosures pursuant to the securities laws. The SEC and NASDAQ
Sarbanes-Oxley-related regulations and policies include very specific
additional disclosure requirements and new corporate governance rules.

The Sarbanes-Oxley Act of 2002 was enacted in response
to public concerns regarding corporate accountability in connection with recent
accounting scandals.  The stated goals
of the Sarbanes-Oxley Act are to increase corporate responsibility, to provide
for enhanced penalties for accounting and auditing improprieties at publicly
traded companies, and to protect investors by improving the accuracy and reliability
of corporate disclosures pursuant to the securities laws. The Sarbanes-Oxley
Act generally applies to all companies that file or are required to file
periodic reports with the SEC, under Securities Exchange Act of 1934.

5.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

The Sarbanes-Oxley Act includes very specific
additional disclosure requirements and new corporate governance rules requiring
the SEC and securities exchanges to adopt extensive additional disclosure,
corporate governance and other related rules, and mandates further studies of
certain issues by the SEC.  The
Sarbanes-Oxley Act represents significant federal involvement in matters
traditionally left to state regulatory systems, such as the regulation of the
accounting profession, and to state corporate law, such as the relationship
between a board of directors and management and between a board of directors
and its committees.  Sarbanes-Oxley
section 404 requires significant oversight of a public companys internal
control over the financial statements.
For accelerated filers, the rules require them to provide managements
report on internal control over financial reporting by December 31, 2007.  The rule further requires an accelerated
filer to have an external auditors attestation report on internal control over
financial reporting as of December 31, 2007. The Company incurred approximately
$272,000 in additional expenses to comply with the provisions of the
Sarbanes-Oxley Act.

Centrue
Bank

Centrue Bank is an Illinois-chartered bank, the
deposit accounts of which are insured by the FDIC. Centrue Bank is also a
member of the Federal Reserve System (member bank). As an Illinois-chartered,
FDIC-insured member bank, Centrue Bank is subject to the examination,
supervision, reporting and enforcement requirements of the DFPR, as the
chartering authority for Illinois banks, the Federal Reserve, as the primary
federal regulator of member banks, and the FDIC, as administrator of deposit
insurance.

Deposit Insurance. As
an FDIC-insured institution, Centrue Bank is required to pay deposit insurance
premium assessments to the FDIC.

Pursuant to the Federal Deposit Insurance Reform Act
of 2005 (the FDIRA) in 2006, the previously separate deposit insurance funds
for banks and savings associations were merged into a single deposit insurance
fund administered by the FDIC.  Centrue
Banks deposits are insured up to applicable limitations by that deposit
insurance fund.

Following the adoption of the FDIRA, the FDIC has the
opportunity, through its rulemaking authority, to better price deposit
insurance for risk than was previously authorized.  The FDIC adopted regulations that create a system of risk-based
assessments.  Under the new regulations,
there are four risk categories, and each insured institution will be assigned
to a risk category based on capital levels and supervisory ratings.  Well-capitalized institutions with CAMELS
composite ratings of 1 or 2 will be placed in Risk Category I while other
institutions will be placed in Risk Categories II, III or IV depending on their
capital levels and CAMEL composite ratings.
The current assessment rates established by the FDIC provide that the
highest rated institutions, those in Risk Category I, will pay premiums of between
0.05% and 0.07% of deposits and the lowest rated institutions, those in Risk
Category IV, will pay premiums of 0.43% of deposits. The assessment rates may
be changed by the FDIC as necessary to maintain the insurance fund at the
reserve ratio designated by the FDIC, which currently is 1.25% of insured
deposits.  The FDIC may set the reserve
ratio annually at between 1.15% and 1.50% of insured deposits. Deposit
insurance assessments will be collected for a quarter, at the end of the next
quarter.  Assessments are based on
deposit balances at the end of the quarter, except for institutions with $1
billion or more in assets, such as Centrue Bank, and any institution that
becomes insured on or after January 1, 2007 which will have their assessment
base determined using average daily balances of insured deposits.

6.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
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In 2006, the FDIC adopted a final rule allocating a
one-time assessment credit among insured financial institutions.  This credit may be used to offset deposit
insurance assessments (not to include FICO assessments) beginning in 2007. The
Company began taking advantage of this credit in 2007 and expects to realize
benefit from this credit thru the second quarter of 2009.

The FDIC may terminate the deposit insurance of any
insured depository institution if the FDIC determines, after a hearing, that
the institution (i) has engaged or is engaging in unsafe or unsound practices,
(ii) is in an unsafe or unsound condition to continue operations or (iii) has
violated any applicable law, regulation, order, or any condition imposed in
writing by, or written agreement with, the FDIC. The FDIC may also suspend
deposit insurance temporarily during the hearing process for a permanent
termination of insurance, if the institution has no tangible capital.
Management of the Company is not aware of any activity or condition that could
result in termination of the deposit insurance of Centrue Bank.

FICO Assessments.
FDIC insured institutions are also subject to assessments to cover interest
payments due on the outstanding obligations of the Financing Corporation
(FICO). FICO was created in 1987 to finance the recapitalization of the
Federal Savings and Loan Insurance Corporation. These FICO assessments are in
addition to amounts assessed by the FDIC for deposit insurance until the final
maturity of the outstanding FICO obligations in 2019. FDIC insured institutions
will share the cost of the interest on the FICO bonds on apro rata basis. During the
year ended December 31, 2007, the FICO assessment rate for DIF members ranged
between approximately 0.0114% of deposits and approximately 0.0122% of
deposits. During the year ended December 31, 2007, Centrue Bank paid FICO
assessments totaling $121,829.  For the
first quarter of 2008, the rate established by the FDIC for the FICO assessment
is 0.0114% of deposits.

Supervisory Assessments.
All Illinois banks are required to pay supervisory assessments to the DFPR to
fund the operations of the DFPR. The amount of the assessment is calculated
based on the institutions total assets, including consolidated subsidiaries,
as reported to the DFPR. During the year ended December 31, 2007, Centrue Bank
paid supervisory assessments to the DFPR totaling $194,836.

Capital Requirements.
The Federal Reserve has established the following minimum capital standards for
state-chartered Federal Reserve System member banks, such as Centrue Bank: a
leverage requirement consisting of a minimum ratio of Tier 1 capital to total
assets of 3% for the most highly-rated banks with a minimum requirement of at
least 4% for all others, and a risk-based capital requirement consisting of a
minimum ratio of total capital to total risk-weighted assets of 8%, at least
one-half of which must be Tier 1 capital. For purposes of these capital
standards, Tier 1 capital and total capital consist of substantially the same
components as Tier 1 capital and total capital under the Federal Reserves
capital guidelines for bank holding companies (see The CompanyCapital
Requirements).

The capital requirements described above are minimum
requirements. Higher capital levels will be required if warranted by the
particular circumstances or risk profiles of individual institutions. For example,
the regulations of the Federal Reserve provide that additional capital may be
required to take adequate account of, among other things, interest rate risk or
the risks posed by concentrations of credit, nontraditional activities or
securities trading activities.

7.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

During the year ended December 31, 2007, Centrue Bank
was not required by the Federal Reserve to increase its capital to an amount in
excess of the minimum regulatory requirement. As of December 31, 2007, Centrue
Bank had regulatory capital as follows:

| |              |  |               |  |               | 
| | ------------ |  | ------------- |  | ------------- | 
| |              |  | Risk-Based    |  | Leverage      | 
| |              |  | Capital Ratio |  | Capital Ratio | 
| |              |  |               |  |               | 
|
| | Centrue Bank |  | 11.0%         |  | 8.3%          | 

The risk-based capital ratio and the leverage capital
ratio are 3.0% and 4.3% in excess of the Federal Reserves minimum
requirements.  See Note 16 in the Notes
in Consolidated Financial Statements for further information.

Federal law provides the federal banking regulators
with broad power to take prompt corrective action to resolve the problems of
undercapitalized institutions. The extent of the regulators powers depends on
whether the institution in question is well capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized or
critically undercapitalized, in each case as defined by regulation. Depending
upon the capital category to which an institution is assigned, the regulators
corrective powers include: requiring the institution to submit a capital restoration
plan; limiting the institutions asset growth and restricting its activities;
requiring the institution to issue additional capital stock (including
additional voting stock) or to be acquired; restricting transactions between
the institution and its affiliates; restricting the interest rate the
institution may pay on deposits; ordering a new election of directors of the
institution; requiring that senior executive officers or directors be
dismissed; prohibiting the institution from accepting deposits from
correspondent banks; requiring the institution to divest certain subsidiaries;
prohibiting the payment of principal or interest on subordinated debt; and
ultimately, appointing a receiver for the institution. As of December 31, 2007,
Centrue Bank was considered well capitalized.

Additionally, institutions insured by the FDIC may be
liable for any loss incurred by, or reasonably expected to be incurred by, the
FDIC in connection with the default of commonly controlled FDIC insured
depository institutions or any assistance provided by the FDIC to commonly
controlled FDIC insured depository institutions in danger of default.

Dividends. Under the
Illinois Banking Act, Illinois-chartered banks may not pay dividends in excess
of their net profits then on hand, after deducting losses and bad debts. The
Federal Reserve Act also imposes limitations on the amount of dividends that
may be paid by state member banks, such as Centrue Bank. Generally, a member
bank may pay dividends out of its undivided profits, in such amounts and at
such times as the banks board of directors deems prudent. Without prior
Federal Reserve approval, however, a state member bank may not pay dividends in
any calendar year which, in the aggregate, exceed such banks calendar
year-to-date net income plus such banks retained net income for the two
preceding calendar years.

The payment of dividends by any financial institution
or its holding company is affected by the requirement to maintain adequate
capital pursuant to applicable capital adequacy guidelines and regulations, and
a financial institution generally is prohibited from paying any dividends if,
following payment thereof, the institution would be undercapitalized. As
described above, Centrue Bank exceeded its minimum capital requirements under
applicable guidelines and had approximately $5.03 million available to be paid
as dividends to the Company as of December 31, 2007. Notwithstanding the
availability of funds for dividends, however, the Federal Reserve may prohibit
the payment of any dividends by Centrue Bank if the Federal Reserve determines
such payment would constitute an unsafe or unsound practice.

8.

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|                                                                         
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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

Insider Transactions.
Centrue Bank is subject to certain restrictions imposed by federal law on
extensions of credit to the Company, on investments in the stock or other
securities of the Company and the acceptance of the stock or other securities
of the Company as collateral for loans. Certain limitations and reporting
requirements are also placed on extensions of credit by Centrue Bank to its
directors and officers, to directors and officers of the Company, to principal
stockholders of the Company, and to related interests of such directors,
officers and principal stockholders. In addition, federal law and regulations
may affect the terms upon which any person becoming a director or officer of
the Company or a principal stockholder of the Company may obtain credit from
the banks with which Centrue Bank maintains a correspondent relationship.

Safety and Soundness Standards.
The federal banking agencies have adopted guidelines which establish
operational and managerial standards to promote the safety and soundness of
federally insured depository institutions. The guidelines set forth standards
for internal controls, information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, fees and benefits, asset quality and earnings.

In general, the safety and soundness guidelines
prescribe the goals to be achieved in each area, and each institution is
responsible for establishing its own procedures to achieve those goals. If an
institution fails to comply with any of the standards set forth in the
guidelines, the institutions primary federal regulator may require the
institution to submit a plan for achieving and maintaining compliance. If an
institution fails to submit an acceptable compliance plan, or fails in any
material respect to implement a compliance plan that has been accepted by its
primary federal regulator, the regulator is required to issue an order
directing the institution to cure the deficiency. Until the deficiency cited in
the regulators order is cured, the regulator may restrict the institutions
rate of growth, require the institution to increase its capital, restrict the
rates the institution pays on deposits or require the institution to take any
action the regulator deems appropriate under the circumstances. Noncompliance
with the standards established by the safety and soundness guidelines may also
constitute grounds for other enforcement action by the federal banking
regulators, including cease and desist orders and civil money penalty
assessments.

Branching Authority.
Illinois banks, such as Centrue Bank, have the authority under Illinois law to
establish branches anywhere in the State of Illinois, subject to receipt of all
required regulatory approvals. Additionally, Centrue Bank has authority under
Missouri law to establish branches anywhere in the State of Missouri, subject
to receipt of all required regulatory approvals.

Under the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the Riegle-Neal Act), both state and national banks
are allowed to establish interstate branch networks through acquisitions of
other banks, subject to certain conditions, including certain limitations on
the aggregate amount of deposits that may be held by the surviving bank and all
of its insured depository institution affiliates.  Illinois law permits interstate mergers, subject to certain conditions,
including a prohibition against interstate mergers involving an Illinois bank
that has been in existence and continuous operation for fewer than five years.

9.

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|                                                                         
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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

The establishment of new interstate branches or the
acquisition of individual branches of a bank in another state (rather than the
acquisition of an out-of-state bank in its entirety) is allowed by the
Riegle-Neal Act only if specifically authorized by state law. Certain states
permit out-of-state banks to establish de novo branches or acquire branches
from another bank although the laws of some of these states require a
reciprocal provision under the law of the state where the bank establishing or
acquiring the branch is chartered. Illinois law permits out-of-state banks to
establish branches in Illinois in this manner, and Illinois-chartered banks may
branch into other states in this manner if the law of the state in which the
branch will be established or acquired so authorizes even if the law of such
state requires a reciprocal provision under Illinois law.

State Bank Activities.
Under federal law and FDIC regulations, FDIC insured state banks are
prohibited, subject to certain exceptions, from making or retaining equity
investments of a type, or in an amount, that are not permissible for a national
bank. Federal law and FDIC regulations also prohibit FDIC insured state banks
and their subsidiaries, subject to certain exceptions, from engaging as
principal in any activity that is not permitted for a national bank or its
subsidiary, respectively, unless the bank meets, and continues to meet, its
minimum regulatory capital requirements and the FDIC determines the activity
would not pose a significant risk to the deposit insurance fund of which the
bank is a member.

The GLB Act also authorizes insured state banks to
engage in financial activities, through subsidiaries, similar to the activities
permitted for financial holding companies. If a state bank wants to establish a
subsidiary engaged in financial activities, it must meet certain criteria,
including that it and all of its affiliated insured depository institutions are
well-capitalized and have a Community Reinvestment Act rating of at least
satisfactory and that it is well-managed. There are capital deduction and
financial statement requirements and financial and operational safeguards that
apply to subsidiaries engaged in financial activities. Such a subsidiary is
considered to be an affiliate of the bank and there are limitations on certain
transactions between a bank and a subsidiary engaged in financial activities of
the same type that apply to transactions with a banks holding company and its
subsidiaries.

Reserve Requirement.
Federal Reserve regulations, as presently in effect, require depository
institutions to maintain non-interest earning reserves against their
transaction accounts (primarily NOW and regular checking accounts), as follows:

| |   |                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | for the first $9.3 million of net transaction
  accounts, there is no reserve;                                                                                                                           
| |   |                                                                                                                                                                                                          
| |  | for net transaction accounts totaling over $9.3
  million and up to and including $43.9 million, a reserve of 3%; and                                                                                    
| |   |                                                                                                                                                                                                          
| |  | for net transaction accounts totaling in excess of
  $43.9 million, a reserve requirement of $1.038 million plus 10% against that
  portion of the total transaction accounts greater than $43.9 million.

The dollar amounts and percentages reported here are
all subject to adjustment by the Federal Reserve. The effect of maintaining the
required non-interest earning reserves is to reduce Centrue Banks interest
earning assets.

Wealth Management Division

Centrue Bank, through its wealth management division,
conducts a full service trust business in the State of Illinois, pursuant to a
certificate of authority issued to the Commissioner under the Illinois
Corporate Fiduciaries Act (the Fiduciaries Act). The wealth management
division is subject to periodic examination by the DFPR and the DFPR has the
authority to take action against it to enforce compliance with the laws
applicable to its operations.

10.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

EXECUTIVE
OFFICERS

The term of office for the
executive officers of the Company is from the date of election until the next
annual organizational meeting of the Board of Directors. In addition to the
information provided in the 2008 Proxy Statement, the names and ages of the
executive officers of the Company as of December 31, 2007, as well as the
offices of the Company and the Subsidiary held by these officers on that date,
and principal occupations for the past five years are set forth below.

Thomas A. Daiber, 50, is the President & Chief Executive
Officer of Centrue Financial Corporation and Centrue Bank. Mr. Daiber joined
the former Centrue Financial in October of 2003 as its President and Chief
Executive Officer. Mr. Daiber had previously served as Chairman, President and
Chief Executive Officer of Aviston Financial Corporation and Chairman and Chief
Executive Officer of the State Bank of Aviston from October 2002 to October
2003. Mr. Daiber served as Allegiant Bancorp, Inc.s Chief Financial Officer
from May of 1999 until March of 2003.

Kurt R. Stevenson, 41, is the Senior Executive Vice President &
Chief Financial Officer of Centrue Financial Corporation and Centrue Bank and
has held that role since 2003. Prior to that, Mr. Stevenson served as the
Companys Vice President and Chief Financial Officer since June 2000. Mr.
Stevenson also acted as the interim President immediately prior to the 2006
merger and as the interim Chief Operating Officer in 2007.

Everett J. Solon, 54, is a Market President (currently responsible
for the Companys Streator, Dwight, Ottawa and Peru locations), a position held
since 2003. In 2007, he also acted as the Companys Head of Mortgage Banking.
Before consolidating into one bank charter in 2003, Mr. Solon had served as the
President and Chief Executive Officer of UnionBank since 1994.

Donald M. Davis, 47, is a Market President (currently responsible for the Companys St.
Louis market area), a position held since he joined the former Centrue Bank in
2006. He had previously worked for National City Bank as its Senior Vice
President of Commercial Real Estate since 2005. Mr. Davis worked for Allegiant
Bancorp, Inc. from 1997 to 2005 as its Senior Vice President/Commercial Business
Development Officer.

Steven E. Flahaven, 52, is the Companys Executive Vice President
& Head of Commercial Banking, a position held since 2006. Beginning in
2004, he acted as the Senior Vice President and Senior Commercial Loan Officer.
Mr. Flahaven joined UnionBank in 2002 as its Vice President and Senior Lender.

Ricky R. Parks, 42, is the Market President for the Companys Fairview Heights, Aviston,
Belleville, Effingham and St. Rose locations. Mr. Parks joined the former
Centrue Bank in January of 2004 as a Senior Vice President and Senior Lender
and in October of 2004 was named its Regional Bank President. Prior to joining
Centrue, Mr. Parks worked for Union Planters Bank from September of 1991 until
January of 2004 in the Metro-East St. Louis market and held the position of
Senior Vice President & Commercial Team Leader prior to his departure.

Robert
L. Davidson, 62, was promoted to Executive Vice President,
Chief Investment Officer and ALCO Manager in January of 2006. He had previously
served as the Companys Senior Vice President, Chief Investment Officer and
ALCO Manager since 2001. Mr. Davidson became employed with UnionBancorp in 1995
as the Investment Officer as a result of the acquisition of Prairie Bancorp and
previously worked for Van Kampen Merritt Investment Advisory, Inc.

11.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

Roger D.
Dotson, 60, is the Companys Executive Vice President, a
position held since late 2007. He had previously served as the Companys Head
of Retail Banking. Mr. Dotson joined the former Centrue Bank as their Regional
President in 2005. Prior to joining the Company, Mr. Dotson served as the
President & CEO of Illinois Community Bank located in Effingham, Illinois.

Heather
M. Hammitt, 33,
is the Companys Executive Vice President & Head of Human Resources &
Corporate Communication. Ms. Hammitt joined UnionBancorp in March of 1998 and
has served in various positions of management in human resources department
during that time.

Kenneth A.
Jones, 44, is the Companys Executive Vice President &
Chief Credit Officer. Mr. Jones joined UnionBank in October 2000 and prior to
his current position he served in the role of Commercial Collector.

Diane F.
Leto, 46, is the Companys Executive Vice President &
Head of Operations. She has been with the Company since June of 2004. Prior to
joining the Company Ms. Leto was the Senior Vice President of Operations for
Castle Bank located in Dekalb, Illinois.

Michael
A. OGorman, 41, is
the Market President for the Companys Kankakee region. Mr. OGorman joined the
former Centrue Bank in January of 2004 as the President of Centrue North. Prior
to joining Centrue, Mr. OGorman worked for National City Bank in Kankakee as a
Community Bank President.

Available
Information

Our Internet address is www.centrue.com. There
we make available, free of charge, our annual report on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and any amendments to those
reports, as soon as reasonably practicable after we electronically file such
material with, or furnish it to, the SEC. Our SEC reports can be accessed
through the investor relations section of our Web site. The information found
on our Web site is not part of this or any other report we file with or furnish
to the SEC.

|         |             
|-------- | ------------
|Item 1A. | Risk Factors

An investment in the Companys common stock is subject
to risks inherent to the Companys business.
The material risk and uncertainties that management believes affect the
Company are described below.  Before
making an investment decision, you should carefully consider the risks and
uncertainties described below, together with all of the other information
included or incorporated by reference in this report.  The risks and uncertainties described below are not the only ones
facing the Company. Additional risks and uncertainties that management is not
aware of or focused on or that management currently deems immaterial may also
impair the Companys business operations.
This report is qualified in its entirety by these risk factors. See
also, Special Note Regarding Forward-Looking Statements.

If any of the following risks actually occur, the
Companys financial condition and results of operations could be materially and
adversely affected. If this were to happen, the value of the Companys common
stock could decline significantly, and you could lose all or part of your
investment.

12.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

References to we, us, and our in this section
refer to the Company and its subsidiary, unless otherwise specified or unless
the context otherwise requires.

Risks
Related to the Companys Business

We are subject to interest rate risk.

The Companys earnings and cash flows are largely dependent
upon its net interest income. Interest rates are highly sensitive to many
factors that are beyond the Companys control, including general economic
conditions and policies of various governmental and regulatory agencies and, in
particular, the Federal Reserve. Changes in monetary policy, including changes
in interest rates, could influence not only the interest the Company receives
on loans and securities and the amount of interest it pays on deposits and
borrowings, but such changes could also affect (i) the Companys ability to
originate loans and obtain deposits, (ii) the fair value of the Companys
financial assets and liabilities, and (iii) the average duration of the
Companys mortgage-backed securities portfolio and other interest-earning assets.  If the interest rates paid on deposits and
other borrowings increase at a faster rate than the interest rates received on
loans and other investments, the Companys net interest income, and therefore
earnings, could be adversely affected. Earnings could also be adversely
affected if the interest rates received on loans and other investments fall
more quickly than the interest rates paid on deposits and other borrowings.

Although management believes it has implemented
effective asset and liability management strategies to reduce the potential
effects of changes in interest rates on the Companys results of operations,
any substantial, unexpected, prolonged change in market interest rates could
have a material adverse effect on the Companys financial condition and results
of operations. Also, the Companys interest rate risk modeling techniques and
assumptions likely may not fully predict or capture the impact of actual
interest rate changes on the Companys balance sheet. See Part II sections Net
Interest Income and Interest Rate Risk in Managements Discussion and
Analysis of Financial Condition and Results of Operations, for further
discussion related to the Companys management of interest rate risk.

We are subject to lending risk.

As of December 31, 2007 approximately 76.8% of the
Companys loan portfolio consisted of commercial, financial, and agricultural,
real estate construction, and commercial real estate loans (collectively,
commercial loans).  Commercial loans
are generally viewed as having more inherent risk of default than residential
mortgage loans or retail loans.  Also,
the commercial loan balance per borrower is typically larger than that for
residential mortgage loans and retail loans, inferring higher potential losses
on an individual loan basis.  Because
the Companys loan portfolio contains a number of commercial loans with large
balances, the deterioration of one or a few of these loans could cause a
significant increase in nonperforming loans. An increase in nonperforming loans
could result in a net loss of earnings from these loans, an increase in the
provision for loan losses, and an increase in loan charge offs, all of which
could have a material adverse effect on the Companys financial condition and
results of operations.  See Part II
Loans in Managements Discussion and Analysis of Financial Condition and
Results of Operations, for further discussion of credit risks related to
different loan types.

We are subject to economic conditions of
our geographic market.

The Companys success depends to a large degree on the
general economic conditions of the geographic markets served by the Bank in the
States of Illinois and Missouri and, to a lesser extent, contiguous states.

13.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

The local economic conditions on these areas have a
significant impact on the generation of the Banks commercial, real estate
commercial, and real estate construction loans; the ability of borrowers to
repay these loans; and the value of the collateral securing these loans.  Adverse changes in the economic conditions
of the counties in which we operate could also negatively impact the financial
results of the Companys operations and have a negative effect on its
profitability. For example, these factors could lead to reduced interest income
and an increase in the provision for loan losses.

A portion of the loans in the Companys portfolio is
secured by real estate. Most of these loans are secured by properties located
in the north central, north west, east central, south central and St. Louiss
suburban east counties of Illinois, as well as, the St. Louis metro area of
Missouri. Negative conditions in the real estate markets where collateral for a
mortgage loan is located could adversely affect the borrowers ability to repay
the loan and the value of the collateral securing the loan. Real estate values
are affected by various factors, including changes in general or regional
economic conditions, supply and demand for properties and governmental rules or
policies.

Our allowance for loan losses may be
insufficient.

Managing the Companys allowance for loan losses is
based upon, among other things, (1) historical experience, (2) an evaluation of
local and national economic conditions, (3) regular reviews of delinquencies
and loan portfolio quality, (4) current trends regarding the volume and
severity of past due and problem loans, (5) the existence and effect of
concentrations of credit, and (6) results of regulatory examinations. Based
upon such factors, management makes various assumptions and judgments about the
ultimate collectibility of the respective loan portfolios.  Although the Company believes that the
allowance for loan losses is adequate, there can be no assurance that such
allowance will prove sufficient to cover future losses. Future adjustments may
be necessary if economic conditions change or adverse developments arise with
respect to nonperforming or performing loans or if regulatory supervision
changes.  Material additions to the
allowance for loan losses would result in a material decrease in the Companys
net income, and possibly its capital, and could result in the inability to pay
dividends, among other adverse consequences.

Mergers and Acquisitions may disrupt our
business and dilute stockholder value.

The Company regularly evaluates mergers and
acquisition opportunities and conducts due diligence activities related to
possible transactions with other financial institutions and financial services
companies.  As a result, negotiations
may take place and future mergers or acquisitions involving cash, debt, or
equity securities may occur at any time.
The Company seeks merger or acquisition partners that are culturally
similar, have experienced management, and possess either significant market
presence or have potential for improved profitability through financial
management, economies of scale, or expanded services.

Acquiring or merging with other banks, businesses, and
acquiring branches involves potential adverse impact to the Companys financial
results and various other risks commonly associated with mergers and
acquisitions, including, among other things:

| |   |                                                                                                                                                         
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Difficulty in estimating the value of the target
  company                                                                                              
| |   |                                                                                                                                                         
| |  | Payment of a premium over book and market values
  that may dilute the Companys tangible book value and earnings per share in
  the short and long term
| |   |                                                                                                                                                         
| |  | Potential exposure to unknown or contingent
  liabilities of the target company                                                                         

14.

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|CENTRUE FINANCIAL CORPORATIONSECURITIES AND EXCHANGE COMMISSION
FORM 10-K
|                                                                         

| |   |                                                                                                                                                    
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Exposure to potential asset quality issues of the
  target company                                                                                 
| |   |                                                                                                                                                    
| |  | There may be volatility in reported income as
  goodwill impairment losses could occur irregularly and in varying amounts                          
| |   |                                                                                                                                                    
| |  | Difficulty and expense of integrating the operations
  and personnel of the target company                                                         
| |   |                                                                                                                                                    
| |  | Inability to realize the expected revenue increases,
  cost savings, increases in geographic or product presence, and/or other
  projected benefits
| |   |                                                                                                                                                    
| |  | Potential disruption to the Companys business                                                                                                     
| |   |                                                                                                                                                    
| |  | Potential diversion of the Companys managements
  time and attention                                                                             
| |   |                                                                                                                                                    
| |  | The possible loss of key employees and customers of
  the target company                                                                           
| |   |                                                                                                                                                    
| |  | Potential changes in banking or tax laws or
  regulations that may affect the target company                                                       

Details of the Companys recent acquisition activity
are presented in Note 2, Business Acquisitions and Divestitures, of the notes
to consolidated financial statements within Part II, Item 8.

Our information systems may experience an
interruption or breach in security.

The Company relies heavily on communications and
information systems to conduct its business. Any failure, interruption, or
breach in security of these systems could result in failures or disruptions in
the Companys customer relationship management, general ledger, deposit, loan,
and other systems.  While the Company
has policies and procedures designed to prevent or limit the effect of the
failure, interruption, or security breach of its information systems, we cannot
assure you that any such failures, interruptions, or security breaches will not
occur or, if they do occur, that they will be adequately addressed.  The occurrence of any failures,
interruptions, or security breaches of the Companys information systems could
damage the Companys reputation, result in a loss of customer business, subject
the Company to additional regulatory scrutiny, or expose the Company to civil
litigation and possible financial liability, any of which could have a material
adverse effect on the Companys financial condition and results of operations.

Risks
Associated With The Companys Industry

We operate in a highly regulated industry.

The banking industry is heavily regulated. The banking
business of the Company and the Bank are subject, in certain respects, to
regulation by the Federal Reserve, the FDIC, the Office of the Comptroller of
the Currency, the IDFPR and the SEC.
The Companys success depends not only on competitive factors but also
on state and federal regulations affecting banks and bank holding companies.
The regulations are primarily intended to protect depositors, not stockholders
or other security holders. The ultimate effect of recent and proposed changes
to the regulation of the financial institution industry cannot be
predicted.  Regulations now affecting
the Company may be modified at any time, and there is no assurance that such
modifications, if any, will not adversely affect the Companys business.

We operate in an industry that is
significantly affected by general business and economic conditions.

The Companys operations and profitability are
impacted by general business and economic conditions in the United States and
abroad.  These conditions include
short-term and long-term interest rates, inflation, money supply, political
issues, legislative and regulatory changes, fluctuations in both debt and
equity capital markets, broad trends in industry and finance, and the strength
of the U. S. economy and the local economies in which the Company operates, all of which
are beyond the Companys control. A deterioration in economic conditions could
result in an increase in loan delinquencies and nonperforming assets, decreases
in loan collateral values, and a decrease in demand for the Companys products
and services among other things, any of which could have a material adverse
impact on the Companys financial condition and results of operations.

15.

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|                                    
|------------------------------------
|Centrue
  Financial Corporation     
|Securities
  And Exchange Commission
|Form 10-K                           
|                                    

|         |                          
|-------- | -------------------------
|Item 1B. | Unresolved Staff Comments
|         |                          
|None.    |                          
|         |                          
|Item 2.  | Properties               

At December 31, 2007, the Company operated 35 offices
(32 full-service bank branches and 2 back-room sales support nonbanking
facilities in Illinois and 1 full-service bank branch in Missouri). The
principal offices of the Company are located in Ottawa, Illinois.  All of the Companys offices are owned by
Centrue Bank and are not subject to any mortgage or material encumbrance, with
the exception of four offices that are leased: one is located in LaSalle County
in Illinois, one in Will County in Illinois, one in St. Clair County in
Illinois and one in St. Louis County in Missouri.  The Company believes that its current facilities are adequate for
its existing business.

|             |  |                                                                                                                                                                                               |  |                                                                                                                      
|------------ |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------
|AFFILIATE    |  | MARKETS
  SERVED                                                                                                                                                                              |  | PROPERTY/TYPE
  LOCATION                                                                                             
|             |  |                                                                                                                                                                                               |  |                                                                                                                      
|             |  |                                                                                                                                                                                               |  |                                                                                                                      
|The Company  |  |                                                                                                                                                                                               |  | Administrative
  Office:  Ottawa, IL                                                                                 
|             |  |                                                                                                                                                                                               |  |                                                                                                                      
|Centrue Bank |  | Bureau, Champaign,
  Clinton,
  DeKalb, Effingham, Grundy, 
  Iroquois, Jo Daviess, Kane, 
  Kankakee, Kendall, LaSalle, 
  Livingston, St. Clair, Whiteside 
  and Will Counties in Illinois |  | Main Office: Streator, IL
  Thirty-three banking offices and two 
  non-banking offices located in markets 
  served.
|             |  |                                                                                                                                                                                               |  |                                                                                                                      
|             |  | St. Louis County in
  Missouri                                                                                                                                                                |  | .                                                                                                                    

In addition to the banking locations listed above,
Centrue Bank owns thirty-three automated teller machines, some of which are
housed within banking offices and some of which are independently located.

At December 31, 2007, the properties and equipment of
the Company had an aggregate net book value of approximately $35.6 million.

|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings

Neither the Company nor its subsidiary are involved in
any pending legal proceedings other than routine legal proceedings occurring in
the normal course of business, which, in the opinion of management, in the
aggregate, are not material to the Companys consolidated financial condition.

|        |                                                      
|------- | -----------------------------------------------------
|Item 4. | Submission of Matters to a Vote of
  Security Holders
|        |                                                      
|None.   |                                                      

16.

---



|                                    
|------------------------------------
|Centrue
  Financial Corporation     
|Securities
  And Exchange Commission
|Form 10-K                           
|                                    

PART II

|        |                                                                                                               
|------- | --------------------------------------------------------------------------------------------------------------
|Item 5. | Market For Registrants Common
  Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

The Companys Common Stock was held by approximately
1,080 stockholders of record as of February 25, 2008, and is traded on The
NASDAQ Stock Market under the symbol TRUE.
The table below indicates the high and low sales prices of the Common
Stock as reported by NASDAQ for transactions of which the Company is aware, and
the dividends declared per share for the Common Stock during the periods
indicated.  Because the Company is not
aware of the price at which certain private transactions in the Common Stock
have occurred, the prices shown may not necessarily represent the complete
range of prices at which transactions in the Common Stock have occurred during
such periods.

|               |  |             |       |      |   |           |  |   |      | 
|-------------- |  | ----------- | ----- | ---- | - | --------- |  | - | ---- | 
|               |  | Stock Sales |       |      |  
|               |  |             |       | Cash |  
|               |  | High        |       | Low  |   | Dividends | 
|               |  |             |       |      |   |           | 
|2007           |  |             |       |      |   |           |  |   |      | 
|First Quarter  |  | $           | 19.93 |      | $ | 18.99     |  | $ | 0.12 | 
|Second Quarter |  |             | 20.55 |      |   | 18.50     |  |   | 0.13 | 
|Third Quarter  |  |             | 20.31 |      |   | 18.95     |  |   | 0.13 | 
|Fourth Quarter |  |             | 24.90 |      |   | 19.19     |  |   | 0.13 | 
|               |  |             |       |      |   |           |  |   |      | 
|2006           |  |             |       |      |   |           |  |   |      | 
|First Quarter  |  | $           | 21.48 |      | $ | 20.12     |  | $ | 0.11 | 
|Second Quarter |  |             | 21.12 |      |   | 19.44     |  |   | 0.12 | 
|Third Quarter  |  |             | 20.17 |      |   | 17.44     |  |   | 0.12 | 
|Fourth Quarter |  |             | 20.00 |      |   | 18.30     |  |   | 0.12 | 
|               |  |             |       |      |   |           |  |   |      | 

The holders of the Common Stock are entitled to
receive dividends as declared by the board of directors of the Company, which
considers payment of dividends quarterly.
Upon the consummation of the acquisition of Prairie in 1996,
preferential dividends were required to be paid or accrued quarterly, with
respect to the outstanding shares of Preferred Stock.  The ability of the Company to pay dividends in the future will be
primarily dependent upon its receipt of dividends from Centrue Bank.  In determining cash dividends, the Board of
Directors considers the earnings, capital requirements, debt and dividend
servicing requirements, financial ratio guidelines it has established,
financial condition of the Company and other relevant factors.  Centrue Banks ability to pay dividends to
the Company and the Companys ability to pay dividends to its stockholders are
also subject to certain regulatory restrictions.

The Company has paid regular cash dividends on the
Common Stock since it commenced operations in 1982. There can be no assurance,
however, that any such dividends will be paid by the Company or that such
dividends will not be reduced or eliminated in the future.  The timing and amount of dividends will
depend upon the earnings, capital requirements and financial condition of the
Company and Centrue Bank, as well as the general economic conditions and other
relevant factors affecting the Company and its subsidiaries.  In 1996, the Company entered into a new loan
agreement in connection with the acquisition of Prairie and Country, replacing
the Companys prior loan agreement.  The
loan agreement contains no direct prohibitions against the payment by the Company
of dividends, but indirectly restricts such dividends through the required
maintenance of minimum capital ratios.
In addition, the terms of the Series A Preferred Stock, and the Series B
Preferred Stock issued to certain of Prairies preferred stockholders prohibit
the payment of dividends by the Company on the Common Stock during any period
for which dividends on the respective series of Preferred Stock are in arrears.

17.

---



|                                    
|------------------------------------
|Centrue
  Financial Corporation     
|Securities
  And Exchange Commission
|Form 10-K                           
|                                    

The following graph shows a
comparison of cumulative total returns for Centrue Financial Corporation, the
NASDAQ Stock Market (US Companies) and an index of SNL Midwest Bank Stocks for
the five-year period beginning January 1, 2003 and ending on December 31, 2007.  The graph was prepared at our request by SNL
Financial LC, Charlottesville, Virginia.

COMPARISON OF
CUMULATIVE TOTAL RETURN
(ASSUMES $100 INVESTED ON JANUARY 1, 2003)

(PERFORMANCE GRAPH)

|                              |  |               |        |          |   |          |  |          |        |          |   |          |  |   |        |  |   |        | 
|----------------------------- |  | ------------- | ------ | -------- | - | -------- |  | -------- | ------ | -------- | - | -------- |  | - | ------ |  | - | ------ | 
|                              |  | Period Ending |       
|                              |  |               |       
|Index                         |  | 12/31/02      |        | 12/31/03 |   | 12/31/04 |  | 12/31/05 |        | 12/31/06 |   | 12/31/07 | 
|                              |  |               |        |          |   |          |  |          |        |          |   |          |  |   |        |  |   |        | 
|Centrue Financial Corporation |  | $             | 100.00 |          | $ | 146.48   |  | $        | 145.17 |          | $ | 148.49   |  | $ | 138.95 |  | $ | 164.79 | 
|NASDAQ Composite              |  |               | 100.00 |          |   | 150.01   |  |          | 162.89 |          |   | 165.13   |  |   | 180.85 |  |   | 198.60 | 
|SNL Midwest Bank              |  |               | 100.00 |          |   | 128.00   |  |          | 144.44 |          |   | 139.18   |  |   | 160.87 |  |   | 125.39 | 

18.

---



|                                    
|------------------------------------
|Centrue
  Financial Corporation     
|Securities
  And Exchange Commission
|Form 10-K                           
|                                    

The following table provides information
about purchases of the Companys common stock by the Company during the fourth
quarter 2007:

|                   |  |                                     |  |                             |       |                                                                                              |  |                                                                                            |  |  |         |  | 
|------------------ |  | ----------------------------------- |  | --------------------------- | ----- | -------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------ |  |  | ------- |  | 
|Period             |  | Total Number of 
  Shares Purchased |  | Average Price Paidper Share |       | Total Number of 
  Shares Purchased 
  as Part of Publicly 
  Announced Plans 
  or Programs |  | Maximum Number 
  of Shares that May 
  Yet Be Purchased 
  Under the Plans or 
  Programs | 
|                   |  |                                     |  |                             |       |                                                                                              |  |                                                                                            | 
|10/01/07 10/31/07 |  | 6,000                               |  | $                           | 19.95 |                                                                                              |  | 6,000                                                                                      |  |  | 644,160 |  | 
|                   |  |                                     |  |                             |       |                                                                                              |  |                                                                                            |  |  |         |  | 
|11/01/07 11/30/07 |  | 170,462                             |  |                             | 21.33 |                                                                                              |  | 170,462                                                                                    |  |  | 473,698 |  | 
|                   |  |                                     |  |                             |       |                                                                                              |  |                                                                                            |  |  |         |  | 
|12/01/07 12/31/07 |  | 20,120                              |  |                             | 22.34 |                                                                                              |  | 20,120                                                                                     |  |  | 453,578 |  | 
|                   |  |                                     |  |                             |       |                                                                                              |  |                                                                                            |  |  |         |  | 
|                   |  |                                     |  |                             |       |                                                                                              |  |                                                                                            | 
|Total (1)          |  | 196,582                             |  | $                           | 21.39 |                                                                                              |  | 196,582                                                                                    |  |  | 453,578 |  | 
|                   |  |                                     |  |                             |       |                                                                                              |  |                                                                                            | 

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The Company repurchased
  196,582 shares of stock during the quarter ended December 31, 2007 at an
  average price of $21.39.  The 2006
  repurchase program approved on November 13, 2006 provided for the Company to
  repurchase up to 5% or 370,000 shares of common stock.  This plan was completed in the fourth
  quarter 2007.  The 2007 repurchase
  program approved on July 24, 2007 authorized the Company to repurchase an additional
  500,000 shares, or approximately 8% of the Companys currently issued and
  outstanding shares, in the open market or privately negotiated transactions
  over an 18 month period commencing immediately following the completion of
  the 2006 stock repurchase program. The expiration date of this program is
  January 24, 2009. Unless terminated earlier by resolution of our board of
  directors, the programs will expire on the earlier of such expiration date or
  when we have repurchased all shares authorized for repurchase under the
  program.

19.

---



|                                    
|------------------------------------
|Centrue
  Financial Corporation     
|Securities
  And Exchange Commission
|Form 10-K                           
|                                    

|        |                        
|------- | -----------------------
|Item 6. | Selected Financial Data

The following table presents selected consolidated
financial data for the five years ended December 31, 2007:

|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|------------------------------------------------------------ |  | ---- | --------- | ---- | - | --------- | - | ---- | --------- | ---- | - | --------- | - | - | --------- | -
|                                                             |  | 2007 |           | 2006 |   | 2005      |   | 2004 |           | 2003 |  
|                                                             |  |      |           |      |   |           |   |      |           |      |  
|Statement of Income Data                                     |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Interest income                                              |  | $    | 83,576    |      | $ | 43,858    |   | $    | 34,697    |      | $ | 34,898    |   | $ | 41,075    |  
|Interest expense                                             |  |      | 44,735    |      |   | 21,351    |   |      | 13,704    |      |   | 13,231    |   |   | 15,946    |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Net interest income                                          |  |      | 38,841    |      |   | 22,507    |   |      | 20,993    |      |   | 21,667    |   |   | 25,129    |  
|Provision for loan losses                                    |  |      | 675       |      |   | (1,275    | ) |      | 250       |      |   | 1,924     |   |   | 8,236     |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Net interest income after provision for loan
losses          |  |      | 38,166    |      |   | 23,782    |   |      | 20,743    |      |   | 19,743    |   |   | 16,893    |  
|Noninterest income                                           |  |      | 15,665    |      |   | 6,688     |   |      | 6,298     |      |   | 12,378    |   |   | 11,971    |  
|Noninterest expense                                          |  |      | 37,333    |      |   | 22,723    |   |      | 21,343    |      |   | 24,860    |   |   | 26,306    |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Income before income taxes                                   |  |      | 16,498    |      |   | 7,747     |   |      | 5,698     |      |   | 7,261     |   |   | 2,558     |  
|Provision (benefit) for income taxes                         |  |      | 5,175     |      |   | 2,145     |   |      | 1,319     |      |   | 2,173     |   |   | 67        |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Income from continuing operations (after
taxes)              |  |      | 11,323    |      |   | 5,602     |   |      | 4,379     |      |   | 5,088     |   |   | 2,491     |  
|Loss on discontinued operations                              |  |      |          |      |   | (415      | ) |      | (206      | )    |   | (285      | ) |   | (361      | )
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Net income                                                   |  | $    | 11,323    |      | $ | 5,187     |   | $    | 4,173     |      | $ | 4,803     |   | $ | 2,130     |  
|Preferred stock dividends                                    |  |      | 207       |      |   | 207       |   |      | 207       |      |   | 207       |   |   | 193       |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Net income for common stockholders                           |  | $    | 11,116    |      | $ | 4,980     |   | $    | 3,966     |      | $ | 4,596     |   | $ | 1,937     |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Per Share Data                                               |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Basic earnings per common shares from continuing
operations  |  | $    | 1.75      |      | $ | 1.31      |   | $    | 1.06      |      | $ | 1.21      |   | $ | 0.57      |  
|Basic earnings per common share                              |  |      | 1.75      |      |   | 1.21      |   |      | 1.01      |      |   | 1.14      |   |   | 0.48      |  
|Diluted earnings per common share from continuing
operations |  |      | 1.74      |      |   | 1.30      |   |      | 1.04      |      |   | 1.19      |   |   | 0.56      |  
|Diluted earnings per common share                            |  |      | 1.74      |      |   | 1.20      |   |      | 0.99      |      |   | 1.12      |   |   | 0.48      |  
|Dividends per common stock                                   |  |      | 0.51      |      |   | 0.48      |   |      | 0.44      |      |   | 0.40      |   |   | 0.35      |  
|Dividend payout ratio for common stock                       |  |      | 29.17     | %    |   | 27.05     | % |      | 43.39     | %    |   | 35.10     | % |   | 74.39     | %
|Book value per common stock                                  |  | $    | 19.50     |      | $ | 18.23     |   | $    | 17.23     |      | $ | 17.30     |   | $ | 16.77     |  
|Basic weighted average common shares
outstanding             |  |      | 6,341,693 |      |   | 4,119,235 |   |      | 3,943,741 |      |   | 4,033,608 |   |   | 3,997,464 |  
|Diluted weighted average common shares
outstanding           |  |      | 6,380,016 |      |   | 4,163,836 |   |      | 4,002,908 |      |   | 4,109,999 |   |   | 4,069,220 |  
|Period-end common shares outstanding                         |  |      | 6,071,546 |      |   | 6,455,068 |   |      | 3,806,876 |      |   | 4,032,144 |   |   | 4,026,850 |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Balance Sheet Data                                           |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Securities                                                   |  | $    | 249,331   |      | $ | 298,692   |   | $    | 196,440   |      | $ | 191,661   |   | $ | 252,248   |  
|Loans                                                        |  |      | 957,285   |      |   | 836,944   |   |      | 417,525   |      |   | 419,275   |   |   | 476,812   |  
|Allowance for loan losses                                    |  |      | 10,755    |      |   | 10,835    |   |      | 8,362     |      |   | 9,732     |   |   | 9,011     |  
|Total assets                                                 |  |      | 1,364,999 |      |   | 1,283,025 |   |      | 676,222   |      |   | 669,546   |   |   | 793,422   |  
|Total deposits                                               |  |      | 1,033,022 |      |   | 1,026,610 |   |      | 543,841   |      |   | 512,477   |   |   | 638,032   |  
|Stockholders equity                                         |  |      | 118,876   |      |   | 118,191   |   |      | 66,075    |      |   | 70,247    |   |   | 68,047    |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Earnings Performance Data                                    |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Return on average total assets                               |  |      | 0.85      | %    |   | 0.69      | % |      | 0.63      | %    |   | 0.65      | % |   | 0.28      | %
|Return on average stockholders
equity                       |  |      | 9.53      |      |   | 6.69      |   |      | 6.06      |      |   | 7.06      |   |   | 3.16      |  
|Net interest margin ratio                                    |  |      | 3.35      |      |   | 3.41      |   |      | 3.56      |      |   | 3.34      |   |   | 3.65      |  
|Efficiency ratio                                             |  |      | 66.67     |      |   | 76.81     |   |      | 77.78     |      |   | 82.90     |   |   | 72.25     |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Asset Quality Ratios                                         |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Nonperforming assets to total end of period
assets           |  |      | 0.51      | %    |   | 1.08      | % |      | 0.62      | %    |   | 0.69      | % |   | 1.10      | %
|Nonperforming loans to total end of period
loans             |  |      | 0.43      |      |   | 1.40      |   |      | 0.96      |      |   | 1.00      |   |   | 1.78      |  
|Net loan charge-offs to total average
loans                  |  |      | 0.08      |      |   | 0.22      |   |      | 0.39      |      |   | 0.23      |   |   | 1.18      |  
|Allowance for loan losses to total loans                     |  |      | 1.12      |      |   | 1.29      |   |      | 2.00      |      |   | 2.32      |   |   | 1.89      |  
|Allowance for loan losses to nonperforming
loans             |  |      | 262.96    |      |   | 92.14     |   |      | 208.84    |      |   | 231.60    |   |   | 106.30    |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Capital Ratios                                               |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  
|Average equity to average assets                             |  |      | 8.90      | %    |   | 10.35     | % |      | 10.39     | %    |   | 9.27      | % |   | 8.87      | %
|Total capital to risk adjusted assets                        |  |      | 10.23     |      |   | 11.94     |   |      | 13.33     |      |   | 14.30     |   |   | 12.15     |  
|Tier 1 leverage ratio                                        |  |      | 7.69      |      |   | 7.90      |   |      | 9.03      |      |   | 9.54      |   |   | 7.60      |  
|                                                             |  |      |           |      |   |           |   |      |           |      |   |           |   |   |           |  

|    |                                                                                                                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Calculated as noninterest
  expense less amortization of intangibles and expenses related to other real
  estate owned divided by the sum of net interest income before provisions for
  loan losses and total noninterest income excluding securities gains and
  losses and gains on sale of assets.

20.

---



|                                    
|------------------------------------
|Centrue
  Financial Corporation     
|Securities
  And Exchange Commission
|Form 10-K                           
|                                    

|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and
  Analysis of Financial Condition and Results of Operations

The following discussion
provides an analysis of the Companys results of operations and financial
condition of Centrue Financial Corporation for the three years ended December
31, 2007. Managements discussion and analysis (MD&A) should be read in
conjunction with Selected Consolidated Financial Data, the consolidated
financial statements of the Company, and the accompanying notes thereto.  Unless otherwise stated, all earnings per
share data included in this section and throughout the remainder of this
discussion are presented on a fully diluted basis.  All financial information is in thousands (000s), except per
share data.

21.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And
  Analysis Of Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Safe Harbor Statement Under the Private Securities Litigation
Reform Act of 1995

This report contains certain
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Act of 1934 as
amended.  The Company intends such
forward-looking statements to be covered by the safe harbor provisions for
forward-looking statements contained in the Private Securities Litigation
Reform Act of 1995 and is including this statement for purposes of these safe
harbor provisions.  Forward-looking
statements, which are based on certain assumptions and describe future plans,
strategies, and expectations of the Company, are generally identified by the
use of words such as believe, expect, intend, anticipate, estimate,
project, planned or potential or similar expressions.

The Companys ability to
predict results, or the actual effect of future plans or strategies, is
inherently uncertain.  Factors which
could have a material adverse effect on the operations and future prospects of
the Company and the subsidiaries include, but are not limited to, changes in:
interest rates; general economic conditions; legislative/regulatory changes;
monetary and fiscal policies of the U.S. government, including policies of the
U.S. Treasury and the Federal Reserve Board; the quality and composition of the
loan or securities portfolios; demand for loan products; deposit flows; competition;
demand for financial services in the Companys market areas; the Companys
implementation of new technologies; the Companys ability to develop and
maintain secure and reliable electronic systems; and accounting principles,
policies, and guidelines.  These risks
and uncertainties should be considered in evaluating forward-looking statements
and undue reliance should not be placed on such statements.

Critical Accounting Policies and Estimates

Note 1 to our Consolidated
Financial Statements for the year ended December 31, 2007 contains a summary of
our significant accounting policies.
Various elements of our accounting policies, by their nature, are
inherently subject to estimation techniques, valuation assumptions and other
subjective assessments.  Our policy with
respect to the methodologies used to determine the allowance for loan losses is
our most critical accounting policy.
The policy is important to the presentation of our financial condition
and results of operations, and it involves a higher decree of complexity and
requires management to make difficult and subjective judgments, which often
require assumptions or estimates about highly uncertain matters.   The use of different judgments, assumptions
and estimates could result in material differences in our results of operations
or financial condition.

The following is a
description of our critical accounting policy and an explanation of the methods
and assumptions underlying its application.

Allowance for Loan Losses:
The allowance for loan losses represents managements estimate of probable
credit losses inherent in the loan portfolio.
Estimating the amount of the allowance for loan losses requires
significant judgment and the use of estimates related to the amount and timing
of expected future cash flows on impaired loans, estimated losses on pools of
homogeneous loans based on historical loss experience, and consideration of
current economic trends and conditions, all of which may be susceptible to
significant change.  The loan portfolio
also represents the largest asset type on the consolidated balance sheet.  Loan losses are charged off against the
allowance, while recoveries of amounts previously charged off are credited to
the allowance.  A provision for loan
losses is charged to operations based on managements periodic evaluation of
the factors previously mentioned, as well as other pertinent factors.

22.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And
  Analysis Of Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

The allowance for loan losses is based on an
estimation computed pursuant to the requirements of Financial Accounting
Standards Board (FASB) Statement No. 5, Accounting for Contingencies and FASB Statements Nos. 114 and 118, Accounting by Creditors for Impairment of a
Loan, the analysis of the allowance for loan losses consists of three
components: (i) specific credit allocation established for expected losses
resulting from analysis developed through specific credit allocations on
individual loans for which the recorded investment in the loan exceeds its fair
value; (ii) general portfolio allocation based on historical loan loss
experience for each loan category; and (iii) subjective reserves based on
general economic conditions as well as specific economic factors in markets in
which the Company operates.

The specific credit allocation component of the
allowances for loan losses is based on an analysis of individual loans and
historical loss experience for each loan category.   The specific credit allocations are based on regular analysis of
all loans over a fixed-dollar amount where the internal credit rating is at or
below a predetermined classification.
These analyses involve a high degree of judgment in estimating the amount
of loss associated with specific loans, including estimating the amount and
timing of future cash flows and collateral values.

The general portfolio allocation component of the
allowance for loan losses is determined statistically using a loss analysis
that examines historical loan loss experience.
The loss analysis is performed quarterly and loss factors are updated
regularly based on actual experience.
The general portfolio allocation element of the allowance for loan
losses also includes consideration of the amounts necessary for concentrations
and changes in portfolio mix and volume.

There are many factors affecting the allowance for
loan losses; some are quantitative while others require qualitative
judgment.  The process for determining
the allowance (which management believes adequately considers all of the
potential factors which might possibly result in credit losses) includes
subjective elements and, therefore, may be susceptible to significant
change.  To the extent actual outcomes
differs from management estimates, additional provision for credit losses could
be required that could adversely affect the Companys earnings or financial
position in future periods.

Goodwill: Costs
in excess of the estimated fair value of identified assets acquired through
purchase transactions are recorded as an asset of the Company.   As per Statement of Financial Accounting
Standards No. 142, Goodwill and Other Intangible Assets, an annual impairment
analysis is required to be performed to determine if the asset is impaired and
needs to be written down to its fair value.
This assessment is conducted as of December 31 of each year or more
frequently if conditions warrant.  Per
the December 31, 2007 analysis, no impairment was identified as a result of
these tests.   In making these
impairment analyses, management must make subjective assumptions regarding the
fair value of the Companys assets and liabilities.   It is possible that these judgments may change over time as
market conditions or Company strategies change, and these changes may cause the
Company to record impairment changes to adjust the goodwill to its estimated
fair value.

Deferred Income Taxes:
Deferred income tax assets and liabilities are computed for differences between
the financial statement and tax basis of assets and liabilities that will
result in taxable or deductible amounts in the future based on enacted tax laws
and rates applicable to the periods in which the differences are expected to
affect taxable income.  Deferred tax
assets are also recognized for operating loss and tax credit
carryforwards.  Valuation allowances are
established when necessary to reduce deferred tax assets to an amount expected
to be realized.   Income tax expense is
the tax payable or refundable for the period plus or minus the change during
the period in deferred tax assets and liabilities.

23.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And
  Analysis Of Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

General

Centrue Financial Corporation (the Company) is a
bank holding company organized under the laws of the State of Delaware.  On November 13, 2006, the Company (formerly
known as UnionBancorp, Inc. now known as Centrue Financial Corporation) merged
with Centrue Financial Corporation (former Centrue), parent of Centrue Bank
with the Company being the surviving entity in the merger.  Operating results of former Centrue are
included in the consolidated financial statements since the date of the
acquisition.  The Company provides a
full range of products and services to individual and corporate customers
located in the north central, east central, south central, suburban west area
of Chicago, suburban metro east area of St. Louis, and northwest Illinois
areas. These products and services include demand, time, and savings deposits;
lending; mortgage banking, brokerage, asset management, and trust
services.  The Company is subject to
competition from other financial institutions, including banks, thrifts and
credit unions, as well as nonfinancial institutions providing financial
services.  Additionally, the Company and
its subsidiary Centrue Bank (the Bank) are subject to regulations of certain
regulatory agencies and undergo periodic examinations by those regulatory
agencies.

Merger,
Acquisition and Divestiture Activity

Completed
Transactions

On June 15, 2007, in order to integrate operations and
streamline its retail distribution channel, the Company consolidated its Dwight
In-Store and Coal City In-Store Illinois branches into nearby main bank
locations.

On August 31, 2007, in order to integrate operations
and streamline its retail distribution channel, the Company closed its Urbana,
Illinois branch location. Customers of this location will continue to be
served by our nearby Champaign branch location.

Announced
Transactions

On October 24, 2007, the Company entered into an
agreement to sell its Hanover & Elizabeth, Illinois branches to Apple River
State Bank headquartered in Apple River, Illinois.  The Definitive Purchase and Assumption Agreement entered into
calls for Apple River to assume approximately $25,300 in deposits and
$12,700 in loans.  The transaction
is expected to be completed late in the first quarter of 2008.

On December 28, 2007, the Company entered into an
agreement to sell its Manlius & Tampico, Illinois branches to Peoples
National Bank headquartered in Kewanee, Illinois.  The Definitive Purchase and Assumption Agreement entered into
calls for Peoples National to assume approximately $31,300 in deposits
and $25,900 in loans.  The
transaction is expected to be completed late in the second quarter of 2008.

24.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And
  Analysis Of Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Results
of Operations

Net Income

2007 compared to 2006.
Net income equaled $11,323 or $1.74 per diluted share for the year ended
December 31, 2007 as compared to net income of $5,187 or $1.20 per diluted
share for the year ended December 31, 2006. Net income for continuing
operations equaled $11,323 or $1.74 per diluted share as compared to net income
of $5,602 or $1.30 per diluted share.
This represents a 118.3% increase in net income and a 45.0% increase in
diluted per share earnings in the current fiscal year over fiscal 2006.

The Companys annual results
for continuing operations improved in 2007 versus 2006 due to volume related
increases in net interest income and other fee based revenue largely related to a
full years operating results from the Centrue merger and organic loan growth
generated in the St. Louis market.
These improvements were partially offset by increases in noninterest
expenses associated with operating twenty-one additional branches resulting
from the merger and an increased provision for loan losses.

Return on average assets was 0.85% for the year ended
December 31, 2007 compared to 0.69% for the same period in 2006.  Return on average stockholders equity was
9.53% for the year ended December 31, 2007 compared to 6.69% for the same
period in 2006.

2006
compared to 2005. Net income equaled $5,187 or $1.20 per
diluted share for the year ended December 31, 2006 as compared to net income of
$4,173 or $0.99 per diluted share for the year ended December 31, 2005. During
the period, the Company reported a net loss of $415 or $0.10 per diluted share
for discontinued operations related to the sale of the insurance line as
compared to a net loss of $206 or $0.05 per diluted share for 2005.

Net income for continuing operations equaled $5,602 or
$1.30 per diluted share as compared to net income of $4,379 or $1.04 per
diluted share.  This represents a 27.9%
increase in net income and a 25.0% increase in diluted per share earnings in
the current fiscal year over fiscal 2005.

The Companys annual results
for continuing operations were higher in 2006 versus 2005 due primarily to
several key issues.  First, due to
general improvement in asset quality, the Company decreased the provision for
loan losses.  Second, volume related
increases in net interest income and other fee based revenue largely related to
operating results from the Centrue merger being recorded for the last 49 days
of the year. Finally, salaries and benefit costs were lower due to a reduction
in work force implemented in the fourth quarter of 2005.  These were partially offset by increases in
occupancy, furniture and equipment expenses related to operations for the last
49 days from the Centrue merger. In addition, performance for the full year of
2006 was negatively impacted by integration and related costs recorded in the
fourth quarter specific to the Centrue merger.

Return on average assets was 0.69% for the year ended
December 31, 2006 compared to 0.63% for the same period in 2005.  Return on average stockholders equity was
6.69% for the year ended December 31, 2006 compared to 6.06% for the same
period in 2005.

25.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And
  Analysis Of Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Net Interest Income/ Margin

Net interest income is the difference between income
earned on interest-earning assets and the interest expense incurred for the
funding sources used to finance these assets.
Changes in net interest income generally occur due to fluctuations in
the volume of earning assets and paying liabilities and rates earned and paid,
respectively, on those assets and liabilities.
The net yield on total interest-earning assets, also referred to as net
interest margin, represents net interest income divided by average
interest-earning assets.  Net interest
margin measures how efficiently the Company uses its earning assets and
underlying capital.  The Companys
long-term objective is to manage those assets and liabilities to provide the
largest possible amount of income while balancing interest rate, credit,
liquidity and capital risks.  For
purposes of this discussion, both net interest income and margin have been
adjusted to a fully tax equivalent basis for certain tax-exempt securities and
loans.

2007
compared to 2006.Net interest income, on a tax
equivalent basis, was $39,958 for the year ended December 31, 2007, compared
with $23,099 earned during the same period in 2006. This represented an
increase of $16,859 or 72.9%.  The
improvement in net interest income was largely related to an increase in
earning assets due to the addition of the former Centrues loan and investment
portfolios for a full year in 2007 and organic loan growth generated primarily
in the St. Louis market. This was offset by increases in deposit balances and a
shift in the mix of funding liabilities from lower costing non-interest bearing
deposits to higher costing time deposits.

The $40,238 increase in interest income resulted from
improvements of $37,453 related to volume and $2,785 due to rates. The majority
of the change in interest income was related to a $437,690 improvement in
average loans largely related to the 2006 merger and organic loan growth
generated from the St. Louis market. Also, contributing were yield increases of
42 basis points in the loan portfolio and 29 basis points in the security
portfolio.

The $23,379 increase in interest expense resulted from
increases of $20,381 due to volume and $2,998 associated with rate.  The majority of the change was attributable
to a $487,557 increase in average interest-bearing liabilities related to the
2006 merger and 69 basis point increase in rates paid on total time
deposits.

The net interest margin decreased 6 basis points to
3.35% for the year ended December 31, 2007 from 3.41% during the same period in
2006. Adversely impacting margin levels was a funding shift into higher costing
time and wholesale deposits away from lower costing non-maturing deposits. The
changes in deposit composition, as well as a generally higher cost of funds
during the year, put pressure on the margin. Due largely to continued
competition in pricing loans and deposits, and the recent economic downturn,
the margin will likely remain under pressure throughout 2008.

2006
compared to 2005.Net interest income, on a tax
equivalent basis, was $23,099 for the year ended December 31, 2006, compared
with $21,587 earned during the same period in 2005. This represented an
increase of $1,512 or 7.0%. The increase in net interest income is attributable
to the year-over-year improvement in income earned on interest earning assets
totaling $9,156 exceeding the year-over-year increase of interest expense paid
on interest bearing liabilities totaling $7,644.

The $9,156 increase in interest income resulted from
improvements of $4,066 related to volume and $5,090 due to rates.  The majority of the change in interest
income was related to yield increases of 63 basis points in the loan portfolio
and 89 basis points in the security portfolio. Also, contributing was the
$71,445 improvement in earning-assets largely related to the merger with
Centrue in the fourth quarter.

26.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And
  Analysis Of Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

The $7,644 increase in interest expense resulted from
increases of $5,535 associated with rate and $2,109 due to volume.  The majority of the change was attributable
to a 118 basis point increase in rates paid on total time deposits due to
repricing of short-term instruments in a higher interest rate environment.  Also contributing to the increase was higher
expense caused by the addition of interest-bearing liabilities largely related
to the merger with Centrue in the fourth quarter.

The net interest margin decreased 15 basis points to
3.41% for the year ended December 31, 2006 from 3.56% during the same period in
2005. The decrease resulted primarily from the result of an inverted yield
curve and competitive pressures in pricing loans and deposits.

27.

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|                                                                 
|-----------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                    
|MANAGEMENTs DISCUSSION AND ANALYSIS OF
  FINANCIAL CONDITION AND
|RESULTS OF OPERATIONS                                            
|(In Thousands, Except Share Data)                                
|                                                                 

AVERAGE BALANCE SHEET
AND ANALYSIS OF NET INTEREST INCOME

|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|------------------------------------------------------------ |  | ---------------------------------- | --------- | -------- | - | ------- |  | ------- | ---- | -------- | - | ------- | - | ------- | ------ | -------- |  | ------- | - | - | ------- | - | - | ------ |  |  | ---- | -
|                                                             |  | For
  the Years Ended December 31, |          
|                                                             |  |                                    |          
|                                                             |  |                                    |           | 2007     |   |         |  |         |      | 2006     |   |         |   |         |        | 2005     |  |         |  
|                                                             |  |                                    |           | Interest |   |         |  |         |      | Interest |   |         |   |         |        | Interest |  |         |  
|                                                             |  | Average                            |           | Income/  |   | Average |  | Average |      | Income/  |   | Average |   | Average |        | Income/  |  | Average |  
|                                                             |  | Balance                            |           | Expense  |   | Rate    |  | Balance |      | Expense  |   | Rate    |   | Balance |        | Expense  |  | Rate    |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |  
|ASSETS                                                       |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Interest-earning assets                                      |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Interest-earning deposits                                    |  | $                                  | 2,362     |          | $ | 33      |  |         | 1.40 | %        | $ | 736     |   | $       | 16     |          |  | 2.18    | % | $ | 147     |   | $ | 7      |  |  | 4.65 | %
|Securities                                                   |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Taxable                                                      |  |                                    | 237,078   |          |   | 12,473  |  |         | 5.26 |          |   | 183,443 |   |         | 8,785  |          |  | 4.79    |   |   | 169,468 |   |   | 6,331  |  |  | 3.73 |  
|Non-taxable                                                  |  |                                    | 40,950    |          |   | 2,248   |  |         | 5.49 |          |   | 21,711  |   |         | 1,478  |          |  | 6.81    |   |   | 21,076  |   |   | 1,504  |  |  | 7.14 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Total securities (tax equivalent)                            |  |                                    | 278,028   |          |   | 14,721  |  |         | 5.29 |          |   | 205,154 |   |         | 10,263 |          |  | 5.00    |   |   | 190,544 |   |   | 7,835  |  |  | 4.11 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Federal funds sold                                           |  |                                    | 10,811    |          |   | 545     |  |         | 5.04 |          |   | 6,846   |   |         | 364    |          |  | 5.31    |   |   | 3,785   |   |   | 115    |  |  | 3.23 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Loans                                                        |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Commercial                                                   |  |                                    | 180,714   |          |   | 14,962  |  |         | 8.28 |          |   | 121,435 |   |         | 8,957  |          |  | 7.38    |   |   | 117,571 |   |   | 8,131  |  |  | 6.92 |  
|Real estate                                                  |  |                                    | 708,734   |          |   | 53,480  |  |         | 7.55 |          |   | 334,119 |   |         | 23,529 |          |  | 7.03    |   |   | 277,267 |   |   | 17,640 |  |  | 6.36 |  
|Installment and other                                        |  |                                    | 13,210    |          |   | 952     |  |         | 7.21 |          |   | 9,414   |   |         | 1,326  |          |  | 14.08   |   |   | 16,945  |   |   | 1,571  |  |  | 9.27 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Gross
  loans (tax equivalent)                               |  |                                    | 902,658   |          |   | 69,394  |  |         | 7.69 |          |   | 464,968 |   |         | 33,812 |          |  | 7.27    |   |   | 411,783 |   |   | 27,342 |  |  | 6.64 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Total interest-earnings assets                               |  |                                    | 1,193,859 |          |   | 84,693  |  |         | 7.09 |          |   | 677,704 |   |         | 44,455 |          |  | 6.56    |   |   | 606,259 |   |   | 35,299 |  |  | 5.82 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Noninterest-earning assets                                   |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Cash and cash equivalents                                    |  |                                    | 31,692    |          |   |         |  |         |      |          |   | 18,818  |   |         |        |          |  |         |   |   | 18,874  |   |   |        |  |  |      |  
|Premises and equipment, net                                  |  |                                    | 35,747    |          |   |         |  |         |      |          |   | 16,618  |   |         |        |          |  |         |   |   | 13,782  |   |   |        |  |  |      |  
|Other assets                                                 |  |                                    | 73,579    |          |   |         |  |         |      |          |   | 36,074  |   |         |        |          |  |         |   |   | 24,138  |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Total non-interest-earning assets                            |  |                                    | 141,018   |          |   |         |  |         |      |          |   | 71,510  |   |         |        |          |  |         |   |   | 56,794  |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Total assets                                                 |  | $                                  | 1,334,877 |          |   |         |  |         |      |          | $ | 749,214 |   |         |        |          |  |         |   | $ | 663,053 |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|LIABILITIES AND STOCKHOLDERS EQUITY                         |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Interest-bearing liabilities                                 |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|NOW accounts                                                 |  | $                                  | 105,417   |          | $ | 1,740   |  |         | 1.65 | %        | $ | 74,328  |   | $       | 1,313  |          |  | 1.77    | % | $ | 72,722  |   | $ | 915    |  |  | 1.26 | %
|Money market accounts                                        |  |                                    | 126,614   |          |   | 4,861   |  |         | 3.84 |          |   | 62,778  |   |         | 1,876  |          |  | 2.99    |   |   | 59,160  |   |   | 1,080  |  |  | 1.83 |  
|Savings deposits                                             |  |                                    | 96,838    |          |   | 655     |  |         | 0.68 |          |   | 45,343  |   |         | 315    |          |  | 0.69    |   |   | 42,122  |   |   | 212    |  |  | 0.50 |  
|Time $100,000 and over                                       |  |                                    | 226,605   |          |   | 12,010  |  |         | 5.30 |          |   | 209,030 |   |         | 9,093  |          |  | 4.35    |   |   | 148,238 |   |   | 4,522  |  |  | 3.05 |  
|Other time deposits                                          |  |                                    | 387,530   |          |   | 18,294  |  |         | 4.72 |          |   | 137,470 |   |         | 5,608  |          |  | 4.14    |   |   | 136,745 |   |   | 4,181  |  |  | 3.06 |  
|Federal funds purchased and repurchase agreements            |  |                                    | 43,859    |          |   | 1,881   |  |         | 4.29 |          |   | 9,947   |   |         | 407    |          |  | 4.09    |   |   | 6,243   |   |   | 197    |  |  | 3.16 |  
|Advances from FHLB                                           |  |                                    | 64,964    |          |   | 2,834   |  |         | 4.36 |          |   | 46,499  |   |         | 1,823  |          |  | 3.92    |   |   | 54,571  |   |   | 2,128  |  |  | 3.91 |  
|Notes payable                                                |  |                                    | 32,428    |          |   | 2,460   |  |         | 7.59 |          |   | 11,303  |   |         | 921    |          |  | 8.15    |   |   | 9,176   |   |   | 477    |  |  | 5.20 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Total interest-bearing liabilities                           |  |                                    | 1,084,255 |          |   | 44,735  |  |         | 4.13 |          |   | 596,698 |   |         | 21,356 |          |  | 3.58    |   |   | 528,977 |   |   | 13,712 |  |  | 2.59 |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Noninterest-bearing liabilities                              |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Noninterest-bearing deposits                                 |  |                                    | 120,355   |          |   |         |  |         |      |          |   | 68,650  |   |         |        |          |  |         |   |   | 61,040  |   |   |        |  |  |      |  
|Other liabilities                                            |  |                                    | 11,459    |          |   |         |  |         |      |          |   | 6,355   |   |         |        |          |  |         |   |   | 4,133   |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Total noninterest-bearing liabilities                        |  |                                    | 131,814   |          |   |         |  |         |      |          |   | 75,005  |   |         |        |          |  |         |   |   | 65,173  |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Stockholders equity                                         |  |                                    | 118,808   |          |   |         |  |         |      |          |   | 77,511  |   |         |        |          |  |         |   |   | 68,903  |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Total liabilities and stockholders equity                   |  | $                                  | 1,334,877 |          |   |         |  |         |      |          | $ | 749,214 |   |         |        |          |  |         |   | $ | 663,053 |   |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Net interest income (tax equivalent)                         |  |                                    |           |          | $ | 39,958  |  |         |      |          |   |         |   | $       | 23,099 |          |  |         |   |   |         |   | $ | 21,587 |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Net interest income (tax equivalent) to total earning assets |  |                                    |           |          |   |         |  |         | 3.35 | %        |   |         |   |         |        |          |  | 3.41    | % |   |         |   |   |        |  |  | 3.56 | %
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  
|Interest-bearing liabilities to earning assets               |  |                                    | 90.82     | %        |   |         |  |         |      |          |   | 88.05   | % |         |        |          |  |         |   |   | 87.25   | % |   |        |  |  |      |  
|                                                             |  |                                    |           |          |   |         |  |         |      |          |   |         |   |         |        |          |  |         |   |   |         |   |   |        |  |  |      |  

|    |                                                                                                                                                              
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Average balance and average rate on securities classified as
  available-for-sale are based on historical amortized cost balances.                           
|   
|(2) | Interest
  income and average rate on non-taxable securities are reflected on a tax
  equivalent basis based upon a statutory federal income tax rate of 34%.
|   
|(3) | Nonaccrual
  loans are included in the average balances.                                                                                                     
|   
|(4) | Overdraft
  loans are excluded in the average balances.                                                                                                      

28.

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|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

The Companys
net interest income is affected by changes in the amount and mix of
interest-earning assets and interest-bearing liabilities, referred to as
volume change.  It is also affected by
changes in yields earned on interest-earning assets and rates paid on
interest-bearing deposits and other borrowed funds referred to as rate
change.  The following table reflects
the changes in net interest income stemming from changes in interest rates and
from asset and liability volume, including mix.  Any variance attributable jointly to volume and rate changes is
allocated to the volume and rate variances in proportion to the relationship of
the absolute dollar amount of the change in each.

RATE/VOLUME ANALYSIS OF
NET INTEREST INCOME

|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|------------------------------------------------- |  | ---------------------------------- | ------ | ----------------------- | - | ----- | - | ------ | ------ | ---- | - | ----- | - | - | ----- | - | - | ----- | -
|                                                  |  | For
  the Years Ended December 31, |       
|                                                  |  |                                    |       
|                                                  |  | 2007
  Compared to 2006            |        | 2006
  Compared to 2005 |  
|                                                  |  |                                    |        |                         |  
|                                                  |  | Change
  Due to                    |        | Change
  Due to         |  
|                                                  |  |                                    |        |                         |  
|                                                  |  | Volume                             |        | Rate                    |   | Net   |   | Volume |        | Rate |   | Net   |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |  
|Interest-income:                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|Interest-earning deposits                         |  | $                                  | 23     |                         | $ | (6    | ) | $      | 17     |      | $ | 14    |   | $ | (5    | ) | $ | 9     |  
|Investment securities:                            |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|Taxable                                           |  |                                    | 2,822  |                         |   | 866   |   |        | 3,688  |      |   | 552   |   |   | 1,902 |   |   | 2,454 |  
|Non-taxable                                       |  |                                    | 1,056  |                         |   | (286  | ) |        | 770    |      |   | 83    |   |   | (109  | ) |   | (26   | )
|Federal funds sold                                |  |                                    | 200    |                         |   | (19   | ) |        | 181    |      |   | 139   |   |   | 110   |   |   | 249   |  
|Loans                                             |  |                                    | 33,352 |                         |   | 2,230 |   |        | 35,582 |      |   | 3,278 |   |   | 3,192 |   |   | 6,470 |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|Total interest income                             |  |                                    | 37,453 |                         |   | 2,785 |   |        | 40,238 |      |   | 4,066 |   |   | 5,090 |   |   | 9,156 |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|Interest expense:                                 |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|NOW accounts                                      |  |                                    | 513    |                         |   | (86   | ) |        | 427    |      |   | 21    |   |   | 377   |   |   | 398   |  
|Money market accounts                             |  |                                    | 2,451  |                         |   | 534   |   |        | 2,985  |      |   | 70    |   |   | 726   |   |   | 796   |  
|Savings deposits                                  |  |                                    | 348    |                         |   | (8    | ) |        | 340    |      |   | 17    |   |   | 86    |   |   | 103   |  
|Time, $100,000 and over                           |  |                                    | 8,554  |                         |   | 1,553 |   |        | 10,107 |      |   | 2,022 |   |   | 2,322 |   |   | 4,344 |  
|Other time deposits                               |  |                                    | 4,652  |                         |   | 844   |   |        | 5,496  |      |   | 21    |   |   | 1,633 |   |   | 1,654 |  
|Federal funds purchased and repurchase agreements |  |                                    | 1,454  |                         |   | 20    |   |        | 1,474  |      |   | 140   |   |   | 70    |   |   | 210   |  
|Advances from FHLB                                |  |                                    | 806    |                         |   | 205   |   |        | 1,011  |      |   | (311  | ) |   | 6     |   |   | (305  | )
|Notes payable                                     |  |                                    | 1,603  |                         |   | (64   | ) |        | 1,539  |      |   | 129   |   |   | 315   |   |   | 444   |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|Total interest expense                            |  |                                    | 20,381 |                         |   | 2,998 |   |        | 23,379 |      |   | 2,109 |   |   | 5,535 |   |   | 7,644 |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  
|Net interest income                               |  | $                                  | 17,072 |                         | $ | (213  | ) | $      | 16,859 |      | $ | 1,957 |   | $ | (445  | ) | $ | 1,512 |  
|                                                  |  |                                    |        |                         |   |       |   |        |        |      |   |       |   |   |       |   |   |       |  

Provision
for Loan Losses.
The amount of the provision for
loan losses is based on managements evaluations of the loan portfolio, with
particular attention directed toward nonperforming, impaired and other
potential problem loans.  During these
evaluations, consideration is also given to such factors as managements
evaluation of specific loans, the level and composition of impaired loans, other
nonperforming loans, other identified potential problem loans, historical loss
experience, results of examinations by regulatory agencies, results of the
independent asset quality review process, the market value of collateral, the
estimate of discounted cash flows, the strength and availability of guarantees,
concentrations of credits, and various other factors, including concentration
of credit risk in various industries and current economic conditions.

29.

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|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

2007
compared to 2006.  The
2007 provision for loan losses charged to operating expense totaled $675, an
increase of $1,950 in comparison to recording a negative provision of ($1,275)
in the 2006 period. The increase in the provision was the result of identifying
and addressing problem credits and the recent deteriorating economic conditions
in a timely fashion. Results for 2006 included negative provisions largely due
to the pay-off of one $4,400 loan relationship that was classified as impaired
in late 2005 with a specific reserve allocation of $1,500. The following
factors also impacted 2007 provision levels:

| |   |                                                                                                   
| | - | --------------------------------------------------------------------------------------------------
| |  | decrease
  in nonperforming and action list loans since year-end;                                 
|
| |  | decrease
  in the level of past due loans;                                                        
|
| |  | higher
  than anticipated recoveries; and                                                         
|
| |  | many
  loans that were charged off during 2007 had previously been allocated a
  specific reserve.

Net charge-offs for the year
ended December 31, 2007 were $755 compared with $1,019 in the same period of
2006.  Annualized net charge-offs
decreased to 0.09% of average loans for 2007 compared to 0.22% in the same
period in 2006.

Management remains watchful
of credit quality issues.   Should the
economic climate deteriorate from current levels, borrowers may experience
difficulty, and the level of nonperforming loans, charge-offs and delinquencies
could rise and require further increases in the provision.

2006
compared to 2005.  The
2006 provision for loan losses charged to operating expense totaled ($1,275), a
decrease of $1,525 in comparison to the $250 recorded during the same period
for 2005. The decrease in the provision for loan losses was largely based on
the pay-off of one $4,400 loan relationship that was classified as impaired as
of year-end 2005 with a specific reserve allocation of $1,500. Also
contributing to managements decision to make the reverse provision were
continued improvements in the quality of the loan portfolio, and favorable loan
loss experience. Furthermore, this was positively impacted by loan resolutions,
either through charge-off of nonbankable assets or through successful workout
strategies that were executed throughout 2006.
Net charge-offs for the year ended December 31, 2006 were $1,019
compared with $1,620 in the same period of 2005.  Annualized net charge-offs decreased to 0.22% of average loans
for 2006 compared to 0.39% in the same period in 2005.

Management remains watchful
of credit quality issues.   Should the
economic climate deteriorate from current levels, borrowers may experience
difficulty, and the level of nonperforming loans, charge-offs and delinquencies
could rise and require further increases in the provision.

30.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Noninterest
Income.  Noninterest income consists of a wide
variety of fee-based revenues from bank-related service charges on deposits and
mortgage revenues. Also included in this category are revenues generated by the
Companys brokerage, trust and asset management services as well as increases
in cash surrender value on bank-owned life insurance.  The following table summarizes the Companys noninterest income:

NONINTEREST INCOME
(Dollars in Thousands)

|                                                    |  |                            |        |      |   |       |   |   |       |  
|--------------------------------------------------- |  | -------------------------- | ------ | ---- | - | ----- | - | - | ----- | -
|                                                    |  | Years
  Ended December 31, |       
|                                                    |  | 2007                       |        | 2006 |   | 2005  |  
|                                                    |  |                            |        |      |   |       |  
|                                                    |  |                            |        |      |   |       |  
|Service charges                                     |  | $                          | 6,789  |      | $ | 2,473 |   | $ | 1,996 |  
|Trust income                                        |  |                            | 942    |      |   | 858   |   |   | 811   |  
|Mortgage banking income                             |  |                            | 1,743  |      |   | 1,113 |   |   | 1,350 |  
|Brokerage commissions and fees                      |  |                            | 795    |      |   | 326   |   |   | 513   |  
|Bank owned life insurance                           |  |                            | 991    |      |   | 628   |   |   | 545   |  
|Securities losses                                   |  |                            | (29    | )    |   | (104  | ) |   | (79   | )
|Gain on sale of assets                              |  |                            | 1,107  |      |   | (14   | ) |   | 4     |  
|Other income                                        |  |                            | 3,327  |      |   | 1,408 |   |   | 1,158 |  
|                                                    |  |                            |        |      |   |       |   |   |       |  
|                                                    |  |                            |        |      |   |       |   |   |       |  
|Total noninterest income from continuing operations |  | $                          | 15,665 |      | $ | 6,688 |   | $ | 6,298 |  
|                                                    |  |                            |        |      |   |       |   |   |       |  
|Amounts reclassed to discontinued operations        |  |                            |       |      |   |      |   |   | 1,304 |  
|                                                    |  |                            |        |      |   |       |   |   |       |  
|                                                    |  |                            |        |      |   |       |   |   |       |  
|Previously reported noninterest income levels       |  | $                          | 15,665 |      | $ | 6,688 |   | $ | 7,602 |  
|                                                    |  |                            |        |      |   |       |   |   |       |  

2007
compared to 2006.
Noninterest income from continuing operations totaled $15,665 for the
year ended December 31, 2007, as compared to $6,688 for the same period in
2006.  This represented an increase of
$8,977 or 134.2% in 2007 over the prior period.  Excluding net securities losses and the gains on sale of other
assets, noninterest income shows a year-over-year increase of $7,781 or
114.3%.

The growth was
primarily the result of improvements in service charges and NSF fees on deposit
accounts, electronic banking services (included in other income), and revenue
generated from the mortgage banking division as a result of a full years
activity from the November 2006 merger. Also contributing to the increase were
gains on sale of properties held in other real estate (included in the category
gain on sale of assets), increased revenue generated from the brokerage
product line, and income earned on accrued interest related to a federal tax
refund.

2006
compared to 2005.
Noninterest income for
continuing operations totaled $6,688 for the year ended December 31, 2006, as
compared to $6,298 for the same timeframe in 2005.  This represented an increase of $390 or 6.2% in 2006 over the prior
period.  Excluding net securities losses
and the gains on sale of other assets, noninterest income shows a
year-over-year increase of $433 or 6.8%.
The increase reflected higher service charges and fees received on items
drawn on customer accounts with insufficient funds (included in service
charges), and variable-related improvement in electronic banking card-based
fees. Also contributing to the change was the recognition of revenue generated
from the Centrue merger for 49 days.

These
improvements were partially offset by declines in revenue generated from the
brokerage product line due to a change in the mix of products sold during the
year and the mortgage banking division. The decrease in mortgage banking
income, which includes gains generated from the sale of loans and net servicing
revenue (after amortization of mortgage servicing rights), was due to a
shortfall in the production of new mortgage loans originated. The remaining
categories remained relatively stable with only slight year-over-year changes.

31.

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|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Noninterest
Expense.
Noninterest expense for continuing operations is comprised primarily of
compensation and employee benefits, occupancy and other operating expense.  The following table summarizes the Companys
noninterest expense:

NONINTEREST EXPENSE
(Dollars in Thousands)

|                                                    |  |                            |        |      |   |        |  |   |        | 
|--------------------------------------------------- |  | -------------------------- | ------ | ---- | - | ------ |  | - | ------ | 
|                                                    |  | Years
  Ended December 31, |       
|                                                    |  | 2007                       |        | 2006 |   | 2005   | 
|                                                    |  |                            |        |      |   |        | 
|                                                    |  |                            |        |      |   |        |  |   |        | 
|Salaries and employee
  benefits                    |  | $                          | 17,635 |      | $ | 12,181 |  | $ | 12,546 | 
|Occupancy expense, net                              |  |                            | 4,043  |      |   | 1,714  |  |   | 1,488  | 
|Furniture and equipment
  expenses                  |  |                            | 2,621  |      |   | 2,276  |  |   | 1,852  | 
|Marketing                                           |  |                            | 1,035  |      |   | 697    |  |   | 491    | 
|Supplies and printing                               |  |                            | 653    |      |   | 421    |  |   | 343    | 
|Telephone                                           |  |                            | 834    |      |   | 490    |  |   | 425    | 
|Data processing                                     |  |                            | 1,650  |      |   | 788    |  |   | 490    | 
|Amortization of intangible
  assets                 |  |                            | 2,308  |      |   | 416    |  |   | 120    | 
|Other expense                                       |  |                            | 6,554  |      |   | 3,740  |  |   | 3,588  | 
|                                                    |  |                            |        |      |   |        |  |   |        | 
|                                                    |  |                            |        |      |   |        |  |   |        | 
|Total noninterest expense for continuing operations |  | $                          | 37,333 |      | $ | 22,723 |  | $ | 21,343 | 
|                                                    |  |                            |        |      |   |        |  |   |        | 
|Amounts reclassed to
  discontinued operations      |  |                            |       |      |   |       |  |   | 1,622  | 
|                                                    |  |                            |        |      |   |        |  |   |        | 
|                                                    |  |                            |        |      |   |        |  |   |        | 
|Previously reported
  noninterest expense levels    |  | $                          | 37,333 |      | $ | 22,723 |  | $ | 22,965 | 
|                                                    |  |                            |        |      |   |        |  |   |        | 

2007
compared to 2006.
Noninterest expense for continuing operations totaled $37,333 for the
year ended December 31, 2007, as compared to $22,723 for the same period in
2006.  This represented an increase of
$14,610 or 64.3% in 2007 from 2006.

The increase
was experienced in all categories and primarily due to higher costs associated
with operating twenty-one additional branches for a full years activity from
the November 2006 merger. Also contributing were increases in professional fees
related to Sarbanes-Oxley compliance, core deposit amortization, accelerated
depreciation expense for assets being phased out, and valuation adjustments
taken on properties held in other real estate taken in light of recent economic
downturns. Offsetting these increases were cost savings related to the
completion of integration activities which reduced operating costs and
fifty-four full-time equivalent employees.

2006
compared to 2005.  Noninterest expense for continuing
operations totaled $22,723 for the year ended December 31, 2006, as compared to
$21,343 for the same timeframe in 2005.
This represented an increase of $1,380 or 6.5% in 2006 from 2005.

Adversely
impacting expense levels was approximately $767 in acquisition and integration
costs related to accelerated share-based compensation, employee bonus and
severance payments, contract termination costs, marketing related advertising
and promotional items, and accelerated depreciation expense for assets being phased out.  Also contributing to the increase were costs
associated with the operation of twenty-one additional branches resulting from
the Centrue merger.  These increased
costs were offset by $1,608 in savings from salaries and employee benefits
expense related to a reduction in work force plan implemented during the fourth
quarter of 2005 intended to realign expense levels with revenue levels.  The remaining categories remained
relatively stable with only slight year-over-year changes.

32.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Applicable
Income Taxes.
Income tax expense for the
periods included benefits for tax-exempt income, tax-advantaged investments and
general business tax credits offset by the effect of nondeductible expenses. The
following table shows the Companys income before income taxes, as well as
applicable income taxes and the effective tax rate for each of the past three
years:

|                                                        |  |                            |        |      |   |       |   |   |       |  
|------------------------------------------------------- |  | -------------------------- | ------ | ---- | - | ----- | - | - | ----- | -
|                                                        |  | Years
  Ended December 31, |       
|                                                        |  | 2007                       |        | 2006 |   | 2005  |  
|                                                        |  |                            |        |      |   |       |  
|                                                        |  |                            |        |      |   |       |   |   |       |  
|Income from continuing
  operations before income taxes |  | $                          | 16,498 |      | $ | 7,747 |   | $ | 5,698 |  
|Applicable income taxes                                 |  |                            | 5,175  |      |   | 2,145 |   |   | 1,319 |  
|Effective tax rates                                     |  |                            | 31.4   | %    |   | 27.7  | % |   | 23.2  | %

The Company recorded income
tax expense of $5,175 and $2,145 for 2007 and 2006, respectively.  Effective tax rates equaled 31.4% and 27.7%
respectively, for such periods.  During
the second quarter of 2005, the Company recorded a $251 reduction in state
income taxes due to the receipt of a tax refund related to amended tax returns
outstanding from prior years.  Excluding
this refund, the effective tax rate for 2005 would have been 27.0%.

The Companys effective tax
rate was lower than statutory rates due to several factors.   First, the Company derives interest income
from municipal securities and loans, which are exempt from federal tax and
certain U. S. government agency securities, which are exempt from state
tax.   Second, the level of tax-exempt
income has decreased as a percentage of taxable income. Finally, the Company
derives income from bank owned life insurance policies, which is exempt from
federal and state tax.

Preferred
Stock Dividends. The Company paid $207 of
preferred stock dividends in 2007, 2006 and 2005.

Earnings Review by Business Segment

The Companys
internal reporting and planning process focuses on four primary lines of
business (Segment(s)): Retail, Commercial, Treasury and Wealth Management.   See Note 21 of the Notes to Consolidated
Financial Statements for the presentation of the condensed income statement and
total assets for each Segment.

The financial
information presented was derived from the Companys internal profitability
reporting system that is used by management to monitor and manage the financial
performance of the Company.   This
information is based on internal management accounting policies which have been
developed to reflect the underlying economics of the Segments and, to the
extent practicable, to portray the Segment as if it operated on a stand alone
basis.   Thus, each Segment, in addition
to its direct revenues and expenses, assets and liabilities, includes an
allocation of shared support function expenses.   The Retail, Commercial, Treasury, and Wealth Management Segments
also include funds transfer adjustments to appropriately reflect the cost of
funds on loans made and funding credits on deposits generated.   Apart from these adjustments, the
accounting policies used are similar to those described in Note 1 of the Notes
to Consolidated Financial Statements.

Since there
are no comprehensive authorities for management accounting equivalent to U.S.
generally accepted accounting principles, the information presented is not
necessarily comparable with similar information from other financial
institutions.  In addition,
methodologies used to measure, assign and allocate certain items may change
from time-to-time to reflect, among other things, accounting estimate
refinements, changes in risk profiles, changes in customers or product lines
and changes in management structure.

33.

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|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Retail
Segment. The
Retail Segment (Retail) provides retail banking services to individual
customers through the Companys branch locations in Illinois and Missouri.  The services provided by this Segment
include direct and indirect lending, checking, savings, money market and CD
accounts, safe deposit rental, ATMs and other traditional and electronic
banking services.

Retail
represented 14.7% of total segment net income in 2007, 14.0% in 2006 and 2.9%
in 2005.  Retail assets were $306,156 at
December 31, 2007 and represented 22.4% of total consolidated assets.  This compared to $240,872 at December 31,
2006 and $99,916 at December 31, 2005.

The
growth from 2006 to 2007 was primarily the result of operating twenty-one
additional branches for a full years activity from the November 2006
merger.   This increased the net
interest income, other revenue and other expense categories.

Commercial
Segment.
The Commercial Segment (Commercial) provides commercial banking services
to business customers served through the Companys full service branch channels
located in Illinois and Missouri.   The
services provided by this Segment include lending, business checking and
deposits, cash management, and other traditional as well as electronic
commercial banking services.

Commercial
represented 91.1% of total segment net income in 2007, 114.5% in 2006 and 95.9%
in 2005.   Commercial assets were $741,861
at December 31, 2007 and represented 54.3% of total consolidated assets.   This compared to $686,495 at December 31,
2006 and $330,240 at December 31, 2005.

The
growth from 2006 to 2007 was primarily the result of the increase in earning
asset portfolio due to the addition of the former Centrues loan portfolio for
a full year and organic growth generated primarily in the St. Louis
market. The increase in the provision
was the result of identifying and addressing problem credits and the recent
deteriorating economic conditions in a timely fashion. Results for 2006 included negative provisions largely due to the
pay-off of one $4,400 loan relationship that was classified as impaired in late
2005 with a specific reserve allocation of $1,500.

Treasury Segment.
The Treasury Segment (Treasury) is the area
of the bank responsible for managing the investment portfolio and acquiring
funding for loan activity.   In 2007,
the reduction in the investment portfolio was caused by the selling of
investments and using the proceeds to fund the loan growth experienced in the
Commercial Segment.   Net interest
income grew as a result of having the combined investment portfolio for a full
year after the merge in November 2006.

Treasury
represented (13.0%) of total segment net income in 2007, (1.2%) in 2006 and
(2.3%) in 2005.   Treasury assets were
$268,484 at December 31, 2007 representing 19.7% of total consolidated
assets.   This compared to $328,841 at
December 31, 2006 and $216,355 at December 31, 2005.

Wealth
Management Segment.  The Wealth Management Segment (Wealth) provides trust services,
estate administration, financial planning, employee benefit plan
administration, asset management, and brokerage transaction services.

34.

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|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

Wealth
represented 1.6% of total segment net income in 2007, (10.3%) in 2006 and
(15.3%) in 2005.   Wealth assets were
$1,289 at December 31, 2007 and represented 0.1% of total consolidated
assets.   This compared to $1,330 at
December 31, 2006 and $3,723 at December 31, 2005.

The
improvement in earnings from 2006 to 2007 was the result of the sale of the
Insurance business unit in late 2006.
See Note 22 in the Notes to Consolidated Financial Statements for
additional details on this transaction.
Additionally in 2007, the revenue increased due to increased revenue
from the brokerage product line.

Interest Rate Sensitivity Management

The business of the Company
and the composition of its balance sheet consist of investments in
interest-earning assets (primarily loans and securities) which are primarily
funded by interest-bearing liabilities (deposits and borrowings).  All of the financial instruments of the
Company are for other than trading purposes.
Such financial instruments have varying levels of sensitivity to changes
in market rates of interest.  The
operating income and net income of Centrue Bank depends, to a substantial
extent, on rate differentials, i.e., the differences between the income
Centrue Bank receives from loans, securities, and other earning assets and the
interest expense they pay to obtain deposits and other liabilities.  These rates are highly sensitive to many
factors that are beyond the control of Centrue Bank, including general economic
conditions and the policies of various governmental and regulatory authorities.

The Company measures its
overall interest rate sensitivity through a net interest income analysis.  The net interest income analysis measures
the change in net interest income in the event of hypothetical changes in
interest rates.  This analysis assesses
the risk of changes in net interest income in the event of a sudden and
sustained 100 to 200 basis point increase in market interest rates or a 100 to
200 basis point decrease in market rates.
The interest rates scenarios are used for analytical purposes and do not
necessarily represent managements view of future market movements.

35.

---



|                                                                 
|-----------------------------------------------------------------
|Centrue Financial Corporation                                    
|Managements Discussion And Analysis Of
  Financial Condition And
|Results Of Operations                                            
|(In Thousands, Except Share Data)                                
|                                                                 

The tables below present the
Companys projected changes in net interest income for 2007 and 2006 for the
various rate shock levels.

|                  |  |                          |        |        |   |        |   |  |       |  
|----------------- |  | ------------------------ | ------ | ------ | - | ------ | - |  | ----- | -
|December 31, 2007 |  | Net
  Interest Income    |       
|                  |  |                          |       
|                  |  | Amount                   |        | Change |   | Change |  
|                  |  |                          |        |        |   |        |  
|                  |  | (Dollars
  in Thousands) |       
|                  |  |                          |       
|+200 bp           |  | $                        | 41,670 |        | $ | 305    |   |  | 0.74  | %
|+100 bp           |  |                          | 41,874 |        |   | 509    |   |  | 1.23  |  
|Base              |  |                          | 41,365 |        |   |       |   |  |      |  
|-100 bp           |  |                          | 39,955 |        |   | (1,410 | ) |  | (3.41 | )
|-200 bp           |  |                          | 38,256 |        |   | (3,109 | ) |  | (7.51 | )

Based on the
Companys model at December 31, 2007, the effect of an immediate 200 basis
point increase in interest rates would increase the Companys net interest income
by 0.74% or approximately $305.  The
effect of an immediate 200 basis point decrease in rates would decrease the
Companys net interest income by $3,109 or 7.52%.

In January,
2008, the Federal Reserve reduced rates by 125 basis points.  The effect these rate adjustments have had
is to increase pressure on our margin for 2008.     Management had forecasted some of this rate reduction and took
immediate steps to lessen the impact of the additional reductions that were
announced.   The mix of our funding portion
of the balance sheet has been adjusted to lessen the impact the reductions
would have on our asset rate sensitive portion of the balance sheet by taking
advantage of the wider spreads in various sectors.   Additionally, the steepening of the yield curve has also been
advantageous to lessening the impact that the rate reductions will have during
2008.

|                  |  |                          |        |        |   |        |   |  |        |  
|----------------- |  | ------------------------ | ------ | ------ | - | ------ | - |  | ------ | -
|December 31, 2006 |  | Net
  Interest Income    |       
|                  |  |                          |       
|                  |  | Amount                   |        | Change |   | Change |  
|                  |  |                          |        |        |   |        |  
|                  |  | (Dollars
  in Thousands) |       
|                  |  |                          |        |        |   |        |   |  |        |  
|+200 bp           |  | $                        | 42,539 |        | $ | 2,214  |   |  | 5.49   | %
|+100 bp           |  |                          | 41,482 |        |   | 1,157  |   |  | 2.87   |  
|Base              |  |                          | 40,325 |        |   |       |   |  |       |  
|-100 bp           |  |                          | 38,795 |        |   | (1,530 | ) |  | (3.79  | )
|-200 bp           |  |                          | 35,980 |        |   | (4,345 | ) |  | (10.77 | )

Based on the
Companys model at December 31, 2006, the effect of an immediate 200 basis
point increase in interest rates would increase the Companys net interest
income by 5.49% or approximately $2,214.
The effect of an immediate 200 basis point decrease in rates would
decrease the Companys net interest income by $4,345 or 10.77%.

Financial Condition

Loans
and Asset Quality.  Outstanding loans totaled $957.3 million at December 31, 2007
compared to $836.9 million at December 31, 2006, representing an increase of
$120.4 million or 14.4%.  The loan
growth was largely generated in the St. Louis market and was concentrated in
commercial real estate lending activity.
The Company has no direct exposure to sub prime mortgages.

The
Company offers a broad range of products, including agribusiness, commercial,
residential, and installment loans, designed to meet the credit needs of its
borrowers. The Companys loans are diversified by borrower and industry group.

36.

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|                                                               
|---------------------------------------------------------------
|Centrue Financial Corporation                                  
|Managements Discussion And Analysis Of Financial Condition And
|Results Of Operations                                          
|(In Thousands, Except Share Data)                              
|                                                               

The following
table describes the composition of loans by major categories outstanding:

(Dollars in Thousands)
LOAN PORTFOLIO

|                          |  |                              |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|------------------------- |  | ---------------------------- | ------- | ---- | - | ------- | - | ---- | ------- | ---- | - | ------- | - | - | ------- | -
|                          |  | Aggregate
  Principal Amount |        
|                          |  | December
  31,               |        
|                          |  |                              |        
|                          |  | 2007                         |         | 2006 |   | 2005    |   | 2004 |         | 2003 |  
|                          |  |                              |         |      |   |         |   |      |         |      |  
|                         
|Commercial                |  | $                            | 181,210 |      | $ | 154,829 |   | $    | 91,537  |      | $ | 91,941  |   | $ | 105,767 |  
|Agricultural              |  |                              | 21,861  |      |   | 23,118  |   |      | 26,694  |      |   | 28,718  |   |   | 33,766  |  
|Real estate:              |  |                              |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Commercial mortgages      |  |                              | 362,920 |      |   | 274,909 |   |      | 126,503 |      |   | 129,597 |   |   | 134,985 |  
|Construction              |  |                              | 159,274 |      |   | 116,608 |   |      | 68,508  |      |   | 38,882  |   |   | 30,674  |  
|Agricultural              |  |                              | 23,560  |      |   | 27,624  |   |      | 33,033  |      |   | 30,601  |   |   | 37,092  |  
|1-4 family mortgages      |  |                              | 198,208 |      |   | 226,884 |   |      | 57,920  |      |   | 77,566  |   |   | 94,163  |  
|Installment               |  |                              | 8,611   |      |   | 11,998  |   |      | 12,747  |      |   | 21,502  |   |   | 37,415  |  
|Other                     |  |                              | 1,641   |      |   | 974     |   |      | 583     |      |   | 468     |   |   | 2,950   |  
|                          |  |                              |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Total loans               |  | $                            | 957,285 |      | $ | 836,944 |   | $    | 417,525 |      | $ | 419,275 |   | $ | 476,812 |  
|Allowance for loan losses |  |                              | (10,755 | )    |   | (10,835 | ) |      | (8,362  | )    |   | (9,732  | ) |   | (9,011  | )
|                          |  |                              |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|                          |  |                              |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Loans, net                |  | $                            | 946,530 |      | $ | 826,109 |   | $    | 409,163 |      | $ | 409,543 |   | $ | 467,801 |  
|                          |  |                              |         |      |   |         |   |      |         |      |   |         |   |   |         |  

|                     |  |                                      |        |      |  |        |   |      |        |      |  |        |   |  |        |  
|-------------------- |  | ------------------------------------ | ------ | ---- |  | ------ | - | ---- | ------ | ---- |  | ------ | - |  | ------ | -
|                     |  | Aggregate
  Principal Amount         |       
|                     |  | Percentage
  of Total Loan Portfolio |       
|                     |  | December
  31,                       |       
|                     |  |                                      |       
|                     |  | 2007                                 |        | 2006 |  | 2005   |   | 2004 |        | 2003 | 
|                     |  |                                      |        |      |  |        |   |      |        |      | 
|                    
|Commercial           |  |                                      | 18.93  | %    |  | 18.50  | % |      | 21.92  | %    |  | 21.93  | % |  | 22.18  | %
|Agricultural         |  |                                      | 2.28   |      |  | 2.76   |   |      | 6.39   |      |  | 6.85   |   |  | 7.08   |  
|Real estate:         |  |                                      |        |      |  |        |   |      |        |      |  |        |   |  |        |  
|Commercial mortgages |  |                                      | 37.91  |      |  | 32.85  |   |      | 30.31  |      |  | 30.91  |   |  | 28.31  |  
|Construction         |  |                                      | 16.64  |      |  | 13.93  |   |      | 16.41  |      |  | 9.27   |   |  | 6.43   |  
|Agricultural         |  |                                      | 2.46   |      |  | 3.30   |   |      | 7.91   |      |  | 7.30   |   |  | 7.78   |  
|1-4 family mortgages |  |                                      | 20.71  |      |  | 27.11  |   |      | 13.87  |      |  | 18.50  |   |  | 19.75  |  
|Installment          |  |                                      | 0.90   |      |  | 1.43   |   |      | 3.05   |      |  | 5.13   |   |  | 7.85   |  
|Other loans          |  |                                      | 0.17   |      |  | 0.12   |   |      | 0.14   |      |  | 0.11   |   |  | 0.62   |  
|                     |  |                                      |        |      |  |        |   |      |        |      |  |        |   |  |        |  
|                     |  |                                      |        |      |  |        |   |      |        |      |  |        |   |  |        |  
|Gross loans          |  |                                      | 100.00 | %    |  | 100.00 | % |      | 100.00 | %    |  | 100.00 | % |  | 100.00 | %
|                     |  |                                      |        |      |  |        |   |      |        |      |  |        |   |  |        |  

As of December
31, 2007 and 2006, commitments of Centrue Bank (and its predecessors) under
standby letters of credit and unused lines of credit totaled approximately
$271,856 and $203,745, respectively.

37.

---



|                                                               
|---------------------------------------------------------------
|Centrue Financial Corporation                                  
|Managements Discussion And Analysis Of Financial Condition And
|Results Of Operations                                          
|(In Thousands, Except Share Data)                              
|                                                               

Stated loan
maturities (including rate loans reset to market interest rates) of the total
loan portfolio, net of unearned income, at December 31, 2007 were as follows:

STATED LOAN MATURITIES (1)(Dollars in Thousands)

|             |  |          |         |          |   |           |  |       |         |  |   |         | 
|------------ |  | -------- | ------- | -------- | - | --------- |  | ----- | ------- |  | - | ------- | 
|             |  | Within   |         | 1
  to 5 |   | After
  5 |  |       |        
|             |  | 1
  Year |         | Years    |   | Years     |  | Total |        
|             |  |          |         |          |   |           |  |       |        
|            
|Commercial   |  | $        | 104,792 |          | $ | 50,621    |  | $     | 25,797  |  | $ | 181,210 | 
|Agricultural |  |          | 15,742  |          |   | 4,718     |  |       | 1,401   |  |   | 21,861  | 
|Real estate  |  |          | 200,713 |          |   | 266,023   |  |       | 277,226 |  |   | 743,962 | 
|Installment  |  |          | 2,856   |          |   | 5,124     |  |       | 2,272   |  |   | 10,252  | 
|             |  |          |         |          |   |           |  |       |         |  |   |         | 
|             |  |          |         |          |   |           |  |       |         |  |   |         | 
|Total        |  | $        | 324,103 |          | $ | 326,486   |  | $     | 306,696 |  | $ | 957,285 | 
|             |  |          |         |          |   |           |  |       |         |  |   |         | 

(1)     
Maturities based upon contractual maturity dates

The maturities
presented above are based upon contractual maturities.  Many of these loans are made on a short-term
basis with the possibility of renewal at time of maturity.  All loans, however, are reviewed on a
continuous basis for creditworthiness.

Rate sensitivities
of the total loan portfolio, net of unearned income, at December 31, 2007 were
as follows:

LOAN REPRICING
(Dollars in Thousands)

|              |  |          |         |          |   |           |  |       |         |  |   |         | 
|------------- |  | -------- | ------- | -------- | - | --------- |  | ----- | ------- |  | - | ------- | 
|              |  | Within   |         | 1
  to 5 |   | After
  5 |  |       |        
|              |  | 1
  Year |         | Years    |   | Years     |  | Total |        
|              |  |          |         |          |   |           |  |       |        
|              |  |          |         |          |   |           |  |       |         |  |   |         | 
|Fixed rate    |  | $        | 81,552  |          | $ | 210,671   |  | $     | 116,007 |  | $ | 408,230 | 
|Variable rate |  |          | 240,817 |          |   | 114,784   |  |       | 189,364 |  |   | 544,965 | 
|Nonaccrual    |  |          | 2,663   |          |   | 1,115     |  |       | 312     |  |   | 4,090   | 
|              |  |          |         |          |   |           |  |       |         |  |   |         | 
|              |  |          |         |          |   |           |  |       |         |  |   |         | 
|Total         |  | $        | 325,032 |          | $ | 326,570   |  | $     | 305,683 |  | $ | 957,285 | 
|              |  |          |         |          |   |           |  |       |         |  |   |         | 

Nonperforming Assets.The Companys financial statements are
prepared on the accrual basis of accounting, including the recognition of
interest income on its loan portfolio, unless a loan is placed on nonaccrual
status.  Loans are placed on nonaccrual
status when there are serious doubts regarding the collectibility of all
principal and interest due under the terms of the loans. If a loan is placed on
nonaccrual status, the loan does not generate current period income for the
Company and any amounts received are generally applied first to principal and
then to interest.  It is the policy of
the Company not to renegotiate the terms of a loan because of a delinquent
status.  Rather, a loan is generally
transferred to nonaccrual status if it is not in the process of collection and
is delinquent in payment of either principal or interest beyond 90 days.

The classification of a loan
as nonaccrual does not necessarily indicate that the principal is
uncollectible, in whole or in part.  The
Bank makes a determination as to collectibility on a case-by-case basis and
considers both the adequacy of the collateral and the other resources of the
borrower in determining the steps to be taken to collect nonaccrual loans.  The final determination as to the steps
taken is made based upon the specific facts of each situation.  Alternatives that are typically considered
to collect nonaccrual loans are foreclosure, collection under guarantees, loan
restructuring, or judicial collection actions.

38.

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|                                                               
|---------------------------------------------------------------
|Centrue Financial Corporation                                  
|Managements Discussion And Analysis Of Financial Condition And
|Results Of Operations                                          
|(In Thousands, Except Share Data)                              
|                                                               

Other nonperforming assets
consist of real estate acquired through loan foreclosures or other workout
situations and other assets acquired through repossessions.

Each of the Companys loans
is assigned a rating based upon an internally developed grading system.  A separate credit administration department
also reviews grade assignments on a quarterly basis.  Management continuously monitors nonperforming, impaired, and
past due loans to prevent further deterioration of these loans.  The Company has an independent loan review
function which is separate from the lending function and is responsible for the
review of new and existing loans.

The following
table sets forth a summary of nonperforming assets:

NONPERFORMING ASSETS
(Dollars in Thousands)

|                                                     |  |                |       |      |   |        |   |      |       |      |   |       |   |   |       |  
|---------------------------------------------------- |  | -------------- | ----- | ---- | - | ------ | - | ---- | ----- | ---- | - | ----- | - | - | ----- | -
|                                                     |  | December
  31, |      
|                                                     |  |                |      
|                                                     |  | 2007           |       | 2006 |   | 2005   |   | 2004 |       | 2003 |  
|                                                     |  |                |       |      |   |        |   |      |       |      |  
|Nonaccrual loans                                     |  | $              | 4,090 |      | $ | 11,759 |   | $    | 3,082 |      | $ | 3,649 |   | $ | 8,149 |  
|Loans 90 days past due and
  still accruing interest |  |                |      |      |   |       |   |      | 922   |      |   | 553   |   |   | 328   |  
|                                                     |  |                |       |      |   |        |   |      |       |      |   |       |   |   |       |  
|Total nonperforming loans                            |  |                | 4,090 |      |   | 11,759 |   |      | 4,004 |      |   | 4,202 |   |   | 8,477 |  
|                                                     |  |                |       |      |   |        |   |      |       |      |   |       |   |   |       |  
|Other real estate owned                              |  |                | 2,937 |      |   | 2,136  |   |      | 203   |      |   | 420   |   |   | 227   |  
|                                                     |  |                |       |      |   |        |   |      |       |      |   |       |   |   |       |  
|                                                     |  |                |       |      |   |        |   |      |       |      |   |       |   |   |       |  
|Total nonperforming assets                           |  | $              | 7,027 |      | $ | 13,895 |   | $    | 4,207 |      | $ | 4,622 |   | $ | 8,704 |  
|                                                     |  |                |       |      |   |        |   |      |       |      |   |       |   |   |       |  
|                                                     |  |                |       |      |   |        |   |      |       |      |   |       |   |   |       |  
|Nonperforming loans to
  total end of period loans   |  |                | 0.43  | %    |   | 1.40   | % |      | 0.96  | %    |   | 1.00  | % |   | 1.78  | %
|Nonperforming assets to
  total end of period loans  |  |                | 0.73  |      |   | 1.66   |   |      | 1.01  |      |   | 1.10  |   |   | 1.83  |  
|Nonperforming assets to
  total end of period assets |  |                | 0.51  |      |   | 1.08   |   |      | 0.62  |      |   | 0.69  |   |   | 1.10  |  

The level of nonperforming
loans at December 31, 2007 decreased 65.2% to $4,090 versus the $11,759 that
existed as of December 31, 2006.  The
decrease of $7,669 was largely related to resolutions of nonbankable loans or
through successful workout strategies executed throughout 2007.  The level of nonperforming loans to total
end of period loans was 0.43% at December 31, 2007, as compared to 1.40% at
December 31, 2006. The reserve coverage ratio (allowance to nonperforming
loans) was reported at 262.96% as of December 31, 2007 as compared to 92.14% as
of December 31, 2006.

Other
Potential Problem Loans. The
Company has other potential problem loans that are currently performing, but
where some concerns exist as to the ability of the borrower to comply with
present loan repayment terms. Excluding nonperforming loans and loans
that management has classified as impaired, these other potential problem loans
totaled $1,485 at December 31, 2007 as compared to $1,757 at December 31, 2006.
The classification of these loans, however, does not imply that management
expects losses on each of these loans, but believes that a higher level of
scrutiny and closer monitoring is prudent under the circumstances. Such
classifications relate to specific concerns for each individual borrower and do
not relate to any concentration risk common to all loans in this group.

39.

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|                                                               
|---------------------------------------------------------------
|Centrue Financial Corporation                                  
|Managements Discussion And Analysis Of Financial Condition And
|Results Of Operations                                          
|(In Thousands, Except Share Data)                              
|                                                               

The following
table sets forth a summary of other real estate owned and other collateral
acquired at December 31, 2007:

OTHER REAL ESTATE OWNED
(Dollars in Thousands)

|                                |  |         |    |            |   |       | 
|------------------------------- |  | ------- | -- | ---------- | - | ----- | 
|                                |  | Number  |    | Net
  Book |  
|                                |  | of      |    | Carrying   |  
|                                |  | Parcels |    | Value      |  
|                                |  |         |    |            |  
|Developed property              |  |         | 15 |            | $ | 1,047 | 
|Vacant land or unsold lots      |  |         | 67 |            |   | 1,890 | 
|                                |  |         |    |            |   |       | 
|Total other real estate
  owned |  |         | 82 |            | $ | 2,937 | 
|                                |  |         |    |            |   |       | 

Allowance for Loan Losses. At December 31, 2007, the
allowance for loan losses was $10,755 or 1.12% of total loans as compared to
$10,835 or 1.29% at December 31, 2006.
The Company recorded a provision of $675 to the allowance for loan
losses in 2007 due to the loan growth of $120,341 experienced in 2007.

In conjunction
with the Centrue merger, the Company acquired $436,459 in net loans. Centrues
allowance for loan losses at the acquisition date, not allocated to impaired
loans, was $4,767. The Company applied the guidance required under the American
Institute of Certified Public Accountants Statement of Position 03-3,
Accounting for Certain Loans or Debt Securities Acquired in a Transfer (SOP
03-3) and determined that certain loans acquired in the merger had evidence of
deterioration of credit quality since origination and were probable that all
contractual required payments would not be collected on these loans. The
Company determined that 54 loans with a book value totaling approximately
$11,796 and a fair value of $9,379 were within the guidelines set forth under
SOP 03-3. The Company recorded these at their fair value and reduced the
allowance for loan losses by $2,416.
Accordingly, the Company recorded $4,767 of allowance for loan losses on
loans not subject to SOP 03-3.

At December 31, 2006, the
allowance for loan losses was $10,835 or 1.29% of total loans as compared to
$8,362 or 2.00% at December 31, 2005.  The
Company recorded a negative provision of ($1,275) to the allowance for loan
losses largely based on the pay-off of one $4,400 loan relationship that was
classified as impaired as of year-end with a specific reserve allocation of
$1,500. Also contributing to managements decision to make the reverse
provision were continued improvements in the quality of the loan portfolio and
favorable loan loss experience.

In originating loans, the
Company recognizes that credit losses will be experienced and the risk of loss
will vary with, among other things, the following:

| |   |                                                                                       
| | - | --------------------------------------------------------------------------------------
| |  | general economic
  conditions;                                                        
| |   |                                                                                       
| |  | the type of loan being
  made;                                                        
| |   |                                                                                       
| |  | the creditworthiness of
  the borrower over the term of the loan; and                 
| |   |                                                                                       
| |  | in the case of a
  collateralized loan, the quality of the collateral for such a loan.

The allowance for loan
losses represents the Companys estimate of the allowance necessary to provide
for probable incurred losses in the loan portfolio by analyzing the following:

| |   |                                                                         
| | - | ------------------------------------------------------------------------
| |  | ultimate collectibility of
  the loans in its portfolio;                
| |   |                                                                         
| |  | incorporating feedback
  provided by internal loan staff;               
| |   |                                                                         
| |  | the independent loan
  review function; and                             
| |   |                                                                         
| |  | information provided by
  examinations performed by regulatory agencies.

40.

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|                                                               
|---------------------------------------------------------------
|Centrue Financial Corporation                                  
|Managements Discussion And Analysis Of Financial Condition And
|Results Of Operations                                          
|(In Thousands, Except Share Data)                              
|                                                               

The Company regularly
evaluates the adequacy of the allowance for loan losses. Commercial credits are
graded using a system that is in compliance with regulatory classifications by
the loan officers and the loan review function validates the officers grades.
In the event that the loan review function downgrades the loan, it is included
in the allowance analysis at the lower grade. To establish the appropriate
level of the allowance, a sample of loans (including impaired and nonperforming
loans) are reviewed and classified as to potential loss exposure.

Based on an estimation
computed pursuant to the requirements of Financial Accounting Standards Board
(FASB) Statement No. 5, Accounting for Contingencies, and FASB Statements
Nos. 114 and 118, Accounting by Creditors for Impairment of a Loan, the
analysis of the allowance for loan losses consists of three components:

| |   |                                                                                                                                                                                                                                 
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | specific credit allocation
  established for expected losses resulting from analysis developed through
  specific credit allocations on individual loans for which the recorded
  investment in the loan exceeds its fair value;
|
| |  | general portfolio
  allocation based on historical loan loss experience for each loan category;
  and                                                                                                                           
|
| |  | subjective reserves based
  on general economic conditions as well as specific economic factors in the
  markets in which the Company operates.                                                                                 

The specific credit
allocation component of the allowance for loan losses is based on a regular
analysis of loans over a fixed-dollar amount where the internal credit rating
is at or below a predetermined classification. The fair value of the loan is
determined based on either the present value of expected future cash flows
discounted at the loans effective interest rate, the market price of the loan,
or, if the loan is collateral dependent, the fair value of the underlying
collateral less cost of sale.

The general portfolio
allocation component of the allowance for loan losses is determined
statistically using a loss migration analysis that examines historical loan
loss experience. The loss migration analysis is performed quarterly and loss
factors are updated regularly based on actual experience. The general portfolio
allocation element of the allowance for loan losses also includes consideration
of the amounts necessary for concentrations and changes in portfolio mix and
volume.

The allowance for loan
losses is based on estimates, and ultimate losses will vary from current
estimates. These estimates are reviewed monthly, and as adjustments, either
positive or negative, become necessary, a corresponding increase or decrease is
made in the provision for loan losses. The methodology used to determine the
adequacy of the allowance for loan losses is consistent with prior years.

Management remains watchful of
credit quality issues.   Should the economic
climate deteriorate from current levels, borrowers may experience difficulty,
and the level of nonperforming loans, charge-offs and delinquencies could rise
and require further increases in the provision.

41.

---



|                                                                                       
|---------------------------------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                                          
|MANAGEMENTS DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)                                                    
|                                                                                       

The following table presents a detailed analysis of
the Companys allowance for loan losses:

ALLOWANCE
FOR LOAN LOSSES
(Dollars in Thousands)

|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|----------------------------------------------------------------- |  | -------------- | ------- | ---- | - | ------- | - | ---- | ------- | ---- | - | ------- | - | - | ------- | -
|                                                                  |  | December
  31,
|                                                                  |  |               
|                                                                  |  | 2007           |         | 2006 |   | 2005    |   | 2004 |         | 2003 |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Beginning balance                                                 |  | $              | 10,835  |      | $ | 8,362   |   | $    | 9,732   |      | $ | 9,011   |   | $ | 6,450   |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Charge-offs:                                                      |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Commercial                                                        |  |                | 797     |      |   | 552     |   |      | 342     |      |   | 1,497   |   |   | 4,791   |  
|Real estate mortgages                                             |  |                | 651     |      |   | 1,044   |   |      | 1,611   |      |   | 389     |   |   | 626     |  
|Installment and other loans                                       |  |                | 119     |      |   | 88      |   |      | 367     |      |   | 578     |   |   | 812     |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Total charge-offs                                                 |  |                | 1,567   |      |   | 1,684   |   |      | 2,320   |      |   | 2,464   |   |   | 6,229   |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Recoveries:                                                       |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Commercial                                                        |  |                | 442     |      |   | 223     |   |      | 394     |      |   | 1,021   |   |   | 415     |  
|Real estate mortgages                                             |  |                | 263     |      |   | 357     |   |      | 208     |      |   | 230     |   |   | 46      |  
|Installment and other loans                                       |  |                | 107     |      |   | 85      |   |      | 98      |      |   | 184     |   |   | 93      |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Total recoveries                                                  |  |                | 812     |      |   | 665     |   |      | 700     |      |   | 1,435   |   |   | 554     |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Net charge-offs                                                   |  |                | 755     |      |   | 1,019   |   |      | 1,620   |      |   | 1,029   |   |   | 5,675   |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Provision for loan losses                                         |  |                | 675     |      |   | (1,275  | ) |      | 250     |      |   | 1,924   |   |   | 8,236   |  
|Reduction due to sale of
  loans                                  |  |                |        |      |   |        |   |      |        |      |   | 174     |   |   |        |  
|Increase due to merger                                            |  |                |        |      |   | 4,767   |   |      |        |      |   |        |   |   |        |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Ending balance                                                    |  | $              | 10,755  |      | $ | 10,835  |   | $    | 8,362   |      | $ | 9,732   |   | $ | 9,011   |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Period end total loans                                            |  | $              | 957,285 |      | $ | 836,944 |   | $    | 417,525 |      | $ | 419,275 |   | $ | 476,812 |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Average loans                                                     |  | $              | 902,658 |      | $ | 464,968 |   | $    | 411,783 |      | $ | 447,605 |   | $ | 482,343 |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|                                                                  |  |                |         |      |   |         |   |      |         |      |   |         |   |   |         |  
|Ratio
  of net charge-offs to average loans                       |  |                | 0.08    | %    |   | 0.22    | % |      | 0.39    | %    |   | 0.23    | % |   | 1.18    | %
|Ratio
  of provision for loan losses to average loans             |  |                | 0.07    |      |   | (0.27   | ) |      | 0.06    |      |   | 0.43    |   |   | 1.71    |  
|Ratio
  of allowance for loan losses to ending total loans        |  |                | 1.12    |      |   | 1.29    |   |      | 2.00    |      |   | 2.32    |   |   | 1.89    |  
|Ratio
  of allowance for loan losses to total nonperforming loans |  |                | 262.96  |      |   | 92.14   |   |      | 208.84  |      |   | 231.60  |   |   | 106.30  |  

42.

---



|                                                                                       
|---------------------------------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                                          
|MANAGEMENTS DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)                                                    
|                                                                                       

The following table sets forth an allocation of the
allowance for loan losses among the various loan categories:

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
(Dollars in Thousands)

|                              |  |                |        |                                    |  |        |   |                                    |        |        |  |                                    |   |        |       |                                    |  |        |   |                                    |       |  |  |        |   |   |       |  |  |        |  
|----------------------------- |  | -------------- | ------ | ---------------------------------- |  | ------ | - | ---------------------------------- | ------ | ------ |  | ---------------------------------- | - | ------ | ----- | ---------------------------------- |  | ------ | - | ---------------------------------- | ----- |  |  | ------ | - | - | ----- |  |  | ------ | -
|                              |  | December
  31, |       
|                              |  | 2007           |        | 2006                               |  | 2005   |   | 2004                               |        | 2003   | 
|                              |  |                |        |                                    |  |        |   |                                    |        |        | 
|                              |  | Amount         |        | Loan
  Category
  to Gross
  Loans |  | Amount |   | Loan
  Category
  to Gross
  Loans |        | Amount |  | Loan
  Category
  to Gross
  Loans |   | Amount |       | Loan
  Category
  to Gross
  Loans |  | Amount |   | Loan
  Category
  to Gross
  Loans |      
|                              |  |                |        |                                    |  |        |   |                                    |        |        |  |                                    |   |        |       |                                    |  |        |   |                                    |      
|                             
|Commercial                    |  | $              | 4,013  |                                    |  | 37.31  | % | $                                  | 4,888  |        |  | 21.84                              | % | $      | 7,386 |                                    |  | 28.32  | % | $                                  | 6,035 |  |  | 28.78  | % | $ | 4,935 |  |  | 29.26  | %
|Real
  estate                 |  |                | 6,553  |                                    |  | 60.93  |   |                                    | 5,668  |        |  | 76.61                              |   |        | 773   |                                    |  | 68.49  |   |                                    | 3,311 |  |  | 65.98  |   |   | 2,846 |  |  | 62.27  |  
|Installment
  and other loans |  |                | 189    |                                    |  | 1.76   |   |                                    | 279    |        |  | 1.55                               |   |        | 203   |                                    |  | 3.19   |   |                                    | 386   |  |  | 5.24   |   |   | 593   |  |  | 8.47   |  
|Unallocated                   |  |                |       |                                    |  |       |   |                                    |       |        |  |                                   |   |        |      |                                    |  |       |   |                                    |      |  |  |       |   |   | 637   |  |  |       |  
|                              |  |                |        |                                    |  |        |   |                                    |        |        |  |                                    |   |        |       |                                    |  |        |   |                                    |       |  |  |        |   |   |       |  |  |        |  
|                              |  |                |        |                                    |  |        |   |                                    |        |        |  |                                    |   |        |       |                                    |  |        |   |                                    |       |  |  |        |   |   |       |  |  |        |  
|Total                         |  | $              | 10,755 |                                    |  | 100.00 | % | $                                  | 10,835 |        |  | 100.00                             | % | $      | 8,362 |                                    |  | 100.00 | % | $                                  | 9,732 |  |  | 100.00 | % | $ | 9,011 |  |  | 100.00 | %
|                              |  |                |        |                                    |  |        |   |                                    |        |        |  |                                    |   |        |       |                                    |  |        |   |                                    |       |  |  |        |   |   |       |  |  |        |  

Securities
Activities.
The Companys consolidated securities portfolio, which represented 23.3% of the Companys average
earning asset base as of December 31, 2007, as compared to 28.7% as of December
31, 2006, is managed to minimize interest rate risk, maintain sufficient
liquidity, and maximize return.  The
portfolio includes several callable agency debentures, adjustable rate mortgage
pass-throughs, and collateralized mortgage obligations.  Corporate bonds consist of investment grade
obligations of public corporations. Equity securities consist primarily of
trust preferred stock as well as CRA, FAMC and IBBI stock.  The Companys financial planning anticipates
income streams generated by the securities portfolio based on normal maturity
and reinvestment.  Securities classified
as available-for-sale, carried at fair value, were $238,661 at December 31,
2007 compared to $290,224 at December 31, 2006.  The Company does not have any securities classified as trading or
held-to-maturity. The Company also holds $10,670, $8,468 and $6,376 of Federal
Reserve and Federal Home Loan Bank stock which is classified as restricted
securities as of December 31, 2007, December 31, 2006 and December 31, 2005,
respectively.

The following table describes the composition of
securities by major category and maturity:

SECURITIES PORTFOLIO
(Dollars in Thousands)

|                                                  |  |                |         |      |  |                    |   |   |         |  |  |                    |   |   |         |  |  |                    |  
|------------------------------------------------- |  | -------------- | ------- | ---- |  | ------------------ | - | - | ------- |  |  | ------------------ | - | - | ------- |  |  | ------------------ | -
|                                                  |  | December
  31, |        
|                                                  |  |                |        
|                                                  |  | 2007           |         | 2006 |  | 2005               |  
|                                                  |  |                |         |      |  |                    |  
|                                                  |  |                | Amount  |      |  | %
  of
  Portfolio |   |   | Amount  |  |  | %
  of
  Portfolio |   |   | Amount  |  |  | %
  of
  Portfolio |  
|                                                  |  |                |         |      |  |                    |   |   |         |  |  |                    |   |   |         |  |  |                    |  
|Available-for-Sale                                |  |                |         |      |  |                    |   |   |         |  |  |                    |   |   |         |  |  |                    |  
|U.S. government agencies                          |  | $              | 103,624 |      |  | 43.42              |   | $ | 126,039 |  |  | 43.43              |   | $ | 30,858  |  |  | 16.24              |  
|U.S. government agency mortgage backed
securities |  |                | 47,784  |      |  | 20.02              |   |   | 69,579  |  |  | 23.97              |   |   | 101,022 |  |  | 53.15              |  
|States and political subdivisions                 |  |                | 41,561  |      |  | 17.41              |   |   | 41,471  |  |  | 14.29              |   |   | 18,400  |  |  | 9.68               |  
|Collateralized mortgage obligations               |  |                | 24,077  |      |  | 10.09              |   |   | 27,237  |  |  | 9.39               |   |   | 20,937  |  |  | 11.02              |  
|Corporate bonds                                   |  |                | 2,741   |      |  | 1.15               |   |   | 8,764   |  |  | 3.02               |   |   | 6,907   |  |  | 3.63               |  
|Other securities                                  |  |                | 18,874  |      |  | 7.91               |   |   | 17,134  |  |  | 5.90               |   |   | 11,940  |  |  | 6.28               |  
|                                                  |  |                |         |      |  |                    |   |   |         |  |  |                    |   |   |         |  |  |                    |  
|                                                  |  |                |         |      |  |                    |   |   |         |  |  |                    |   |   |         |  |  |                    |  
|Total                                             |  | $              | 238,661 |      |  | 100.00             | % | $ | 290,224 |  |  | 100.00             | % | $ | 190,064 |  |  | 100.00             | %
|                                                  |  |                |         |      |  |                    |   |   |         |  |  |                    |   |   |         |  |  |                    |  

43.

---



|                                                                                       
|---------------------------------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                                          
|MANAGEMENTS DISCUSSION AND
  ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)                                                    
|                                                                                       

The following table sets forth the contractual, callable
or estimated maturities and yields of the debt securities portfolio as of
December 31, 2007.  Mortgage backed and
collateralized mortgage obligation securities are included at estimated
maturity.

MATURITY SCHEDULE
(Dollars in Thousands)

|                                                    |  |               |        |                              |  |                               |   |                |         |        |  |       |   |        |        |       |  |        |   |   |        |  |  |       |   |   |         | 
|--------------------------------------------------- |  | ------------- | ------ | ---------------------------- |  | ----------------------------- | - | -------------- | ------- | ------ |  | ----- | - | ------ | ------ | ----- |  | ------ | - | - | ------ |  |  | ----- | - | - | ------- | 
|                                                    |  | Maturing      |       
|                                                    |  |               |       
|                                                    |  | Within 1 Year |        | After 1 but
  Within 5 Years |  | After 5 but
  Within 10 Years |   | After 10 Years |         | Total  | 
|                                                    |  |               |        |                              |  |                               |   |                |         |        | 
|                                                    |  | Amount        |        | Yield                        |  | Amount                        |   | Yield          |         | Amount |  | Yield |   | Amount |        | Yield |  | Amount |  
|                                                    |  |               |        |                              |  |                               |   |                |         |        |  |       |   |        |        |       |  |        |   |   |        |  |  |       |   |   |         | 
|                                                   
|Available-for-Sale                                  |  |               |        |                              |  |                               |   |                |         |        |  |       |   |        |        |       |  |        |   |   |        |  |  |       |   |   |         | 
|U.S. government agencies
  and corporations         |  | $             | 26,139 |                              |  | 4.622                         | % | $              | 74,297  |        |  | 4.678 | % | $      | 3,188  |       |  | 6.000  | % | $ |       |  |  |      | % | $ | 103,624 | 
|U.S. government agency
  mortgage backed securities |  |               | 1,567  |                              |  | 4.622                         |   |                | 291     |        |  | 5.188 |   |        | 8,278  |       |  | 5.065  |   |   | 37,648 |  |  | 5.761 |   |   | 47,784  | 
|States and political
  subdivisions (1)             |  |               | 2,814  |                              |  | 6.594                         |   |                | 28,466  |        |  | 5.668 |   |        | 4,132  |       |  | 6.524  |   |   | 6,149  |  |  | 5.665 |   |   | 41,561  | 
|Collateralized mortgage
  obligations               |  |               |       |                              |  |                              |   |                |        |        |  |      |   |        | 342    |       |  | 5.014  |   |   | 23,735 |  |  | 5.548 |   |   | 24,077  | 
|Corporate bonds                                     |  |               | 765    |                              |  | 4.597                         |   |                | 1,976   |        |  | 5.138 |   |        |       |       |  |       |   |   |       |  |  |      |   |   | 2,741   | 
|                                                    |  |               |        |                              |  |                               |   |                |         |        |  |       |   |        |        |       |  |        |   |   |        |  |  |       |   |   |         | 
|                                                    |  |               |        |                              |  |                               |   |                |         |        |  |       |   |        |        |       |  |        |   |   |        |  |  |       |   |   |         | 
|Total                                               |  | $             | 31,285 |                              |  |                               |   | $              | 105,030 |        |  |       |   | $      | 15,940 |       |  |        |   | $ | 67,532 |  |  |       |   | $ | 219,787 | 
|                                                    |  |               |        |                              |  |                               |   |                |         |        |  |       |   |        |        |       |  |        |   |   |        |  |  |       |   |   |         | 

|    |                                                                                                                                      
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|   
|(1) | Rates on obligations of states and political
  subdivisions have been adjusted to tax equivalent yields using a 34% income
  tax rate

Deposit Activities.
Deposits are attracted through the offering of a broad variety of deposit
instruments, including checking accounts, money market accounts, regular
savings accounts, term certificate accounts (including jumbo certificates in
denominations of $100,000 or more), and retirement savings plans.  The Companys average balance of total
deposits was $1,063,359 for 2007, representing an increase of $465,760 or 77.9%
compared with the average balance of total deposits for 2006 primarily
resulting from $523,630 in deposits added as a result of the Centrue merger.

The following table sets forth certain information
regarding Centrue Banks average deposits:

AVERAGE DEPOSITS
(Dollars in Thousands)

|                                       |  |                                    |           |                |  |                       |   |                  |      |                |   |                       |  |                  |        |                |  |                       |   |   |         |  |  |        |   |  |      |  
|-------------------------------------- |  | ---------------------------------- | --------- | -------------- |  | --------------------- | - | ---------------- | ---- | -------------- | - | --------------------- |  | ---------------- | ------ | -------------- |  | --------------------- | - | - | ------- |  |  | ------ | - |  | ---- | -
|                                       |  | For the Years Ended
  December 31, |          
|                                       |  |                                    |          
|                                       |  | 2007                               |           | 2006           |  | 2005                  |  
|                                       |  |                                    |           |                |  |                       |  
|                                       |  | Average
  Amount                   |           | %
  of
  Total |  | Average
  Rate
  Paid |   | Average
  Amount |      | %
  of
  Total |   | Average
  Rate
  Paid |  | Average
  Amount |        | %
  of
  Total |  | Average
  Rate
  Paid |  
|                                       |  |                                    |           |                |  |                       |   |                  |      |                |   |                       |  |                  |        |                |  |                       |  
|Non-interest-bearing
  demand deposits |  | $                                  | 120,355   |                |  | 11.32                 | % |                  |     | %              | $ | 68,650                |  |                  | 11.49  | %              |  |                      | % | $ | 61,040  |  |  | 11.74  | % |  |     | %
|Savings accounts                       |  |                                    | 96,838    |                |  | 9.11                  |   |                  | 0.68 |                |   | 45,343                |  |                  | 7.59   |                |  | 0.69                  |   |   | 42,122  |  |  | 8.10   |   |  | 0.50 |  
|Interest-bearing demand
  deposits     |  |                                    | 232,031   |                |  | 21.82                 |   |                  | 2.84 |                |   | 137,106               |  |                  | 22.94  |                |  | 2.33                  |   |   | 131,882 |  |  | 25.36  |   |  | 1.51 |  
|Time, less than $100,000               |  |                                    | 387,530   |                |  | 36.44                 |   |                  | 4.72 |                |   | 137,470               |  |                  | 23.00  |                |  | 4.14                  |   |   | 136,745 |  |  | 26.30  |   |  | 3.06 |  
|Time, $100,000 or more                 |  |                                    | 226,605   |                |  | 21.31                 |   |                  | 5.30 |                |   | 209,030               |  |                  | 34.98  |                |  | 4.35                  |   |   | 148,238 |  |  | 28.50  |   |  | 3.05 |  
|                                       |  |                                    |           |                |  |                       |   |                  |      |                |   |                       |  |                  |        |                |  |                       |   |   |         |  |  |        |   |  |      |  
|                                       |  |                                    |           |                |  |                       |   |                  |      |                |   |                       |  |                  |        |                |  |                       |   |   |         |  |  |        |   |  |      |  
|Total deposits                         |  | $                                  | 1,063,359 |                |  | 100.00                | % |                  | 3.53 | %              | $ | 597,599               |  |                  | 100.00 | %              |  | 3.05                  | % | $ | 520,027 |  |  | 100.00 | % |  | 2.10 | %
|                                       |  |                                    |           |                |  |                       |   |                  |      |                |   |                       |  |                  |        |                |  |                       |   |   |         |  |  |        |   |  |      |  

As of December 31, 2007, average time deposits over $100,000
represented 21.31% of total average deposits, compared with 34.98% of total
average deposits as of December 31, 2006. The Companys large denomination time
deposits are generally from customers within the local market areas of its
subsidiary bank and provide a greater degree of stability than is typically
associated with brokered deposit customers with limited business relationships.

44.

---



|                                                               
|---------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                  
|MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|RESULTS OF OPERATIONS                                          
|(IN THOUSANDS, EXCEPT SHARE DATA)                              
|                                                               

The following
table sets forth the remaining maturities for time deposits of $100,000 or more
at December 31, 2007:

TIME DEPOSITS OF $100,000 OR MORE
(Dollars in Thousands)

Maturity Range

|                                        |  |   |         | 
|--------------------------------------- |  | - | ------- | 
|Three months
  or less                  |  | $ | 90,329  | 
|Over three
  months through six months  |  |   | 33,475  | 
|Over six
  months through twelve months |  |   | 50,022  | 
|Over twelve
  months                    |  |   | 27,492  | 
|                                        |  |   |         | 
|                                        |  |   |         | 
|Total                                   |  | $ | 201,318 | 
|                                        |  |   |         | 

Return on Equity and Assets.
The following table presents various ratios for the Company:

RETURN ON EQUITY AND ASSETS

|                                         |  |                                    |       |      |  |       |   |  |       |  
|---------------------------------------- |  | ---------------------------------- | ----- | ---- |  | ----- | - |  | ----- | -
|                                         |  | For the Years Ended
  December 31, |      
|                                         |  |                                    |      
|                                         |  | 2007                               |       | 2006 |  | 2005  |  
|                                         |  |                                    |       |      |  |       |  
|Return on
  average assets               |  |                                    | 0.85  | %    |  | 0.69  | % |  | 0.63  | %
|Return on
  average equity               |  |                                    | 9.53  |      |  | 6.69  |   |  | 6.06  |  
|Average
  equity to average assets       |  |                                    | 8.90  |      |  | 10.35 |   |  | 10.39 |  
|Dividend
  payout ratio for common stock |  |                                    | 29.17 |      |  | 27.05 |   |  | 43.39 |  

Liquidity

The Company manages its
liquidity position with the objective of maintaining sufficient funds to
respond to the needs of depositors and borrowers and to take advantage of
earnings enhancement opportunities. In addition to the normal inflow of funds
from core-deposit growth together with repayments and maturities of loans and
investments, the Company utilizes other short-term funding sources such as
brokered time deposits, securities sold under agreements to repurchase,
overnight federal funds purchased from correspondent banks and the acceptance
of short-term deposits from public entities, and Federal Home Loan Bank
advances.

The Company monitors and
manages its liquidity position on several bases, which vary depending upon the
time period. As the time period is expanded, other data is factored in,
including estimated loan funding requirements, estimated loan payoffs,
investment portfolio maturities or calls, and anticipated depository buildups
or runoffs.

The Company classifies all
of its securities as available-for-sale, thereby maintaining significant
liquidity. The Companys liquidity position is further enhanced by structuring
its loan portfolio interest payments as monthly and by the significant
representation of retail credit and residential mortgage loans in the Companys
loan portfolio, resulting in a steady stream of loan repayments. In managing
its investment portfolio, the Company provides for staggered maturities so that
cash flows are provided as such investments mature.

45.

---



|                                                               
|---------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                  
|MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
|RESULTS OF OPERATIONS                                          
|(IN THOUSANDS, EXCEPT SHARE DATA)                              
|                                                               

The Companys cash flows are comprised of
three classifications: cash flows from operating activities, cash flows from
investing activities, and cash flows from financing activities. Cash flows
provided by operating activities and investing activities offset by cash flows
used in financing activities resulted in a net increase in cash and cash
equivalents of $11,433 from December 31, 2006 to December 31, 2007.

During 2007, the Company experienced net cash
outflows of $76,355 in investing activities primarily due to large increases in
loans. In contrast, net cash inflows of $66,772 were provided by financing
activities due to increases in deposits and advances from the Federal Home Loan
Bank and $21,016 from operating activities largely due to net income.

Centrue Banks
securities portfolio, federal funds sold, and cash and due from bank deposit
balances serve as the primary sources of liquidity for the Company. At December
31, 2007, 21.91% of Centrue Banks interest-bearing liabilities were in the
form of time deposits of $100,000 and over. Management believes these deposits
to be a stable source of funds. However, if a large number of these time
deposits matured at approximately the same time and were not renewed, Centrue
Banks liquidity could be adversely affected. Currently, the maturities of
Centrue Banks large time deposits are spread throughout the year, with 44.9%
maturing in the first quarter of 2008, 16.6% maturing in the second quarter of
2008, 24.8% maturing in the third and fourth quarters of 2008, and the
remaining 13.7% maturing thereafter. Centrue Bank monitors those maturities in
an effort to minimize any adverse effect on liquidity.

The Companys
borrowings included trust preferred securities, notes payable, FHLB advances
and securities sold under agreements to repurchase at December 31, 2007 in the
principal amount of $10,000 each for Centrue Statutory Trust II and Centrue
Statutory Trust III, $12,864 payable to the Companys principal correspondent
bank, $121,615 of FHLB advances, $44,937 of securities sold under agreements to
repurchase, shareholder note for $868 related to the purchase of a previous
acquisition and $70 payable to individuals related to the purchase of the
Howard Marshall Agency. The note to the Companys principal correspondent bank
is renewable annually, requires quarterly interest payments, and is
collateralized by the Companys stock in the Bank. The note related to the purchase
of the Howard Marshall Agency requires monthly principal and interest payments.
The shareholder note requires bi-annual payments of $500 at an imputed interest
rate.

The Companys
principal source of funds for repayment of the indebtedness is dividends from
Centrue Bank. At December 31, 2007, approximately $5,025 was available for
dividends without regulatory approval.

Contractual Obligations

The Company has entered into
contractual obligations and commitments and off-balance sheet financial instruments.
The following tables summarize the Companys contractual cash obligations and
other commitments and off-balance sheet instruments as of December 31, 2007:

46.

---



|                                                                                       
|---------------------------------------------------------------------------------------
|Centrue Financial Corporation                                                          
|Managements Discussion And
  Analysis Of Financial Condition And Results Of Operations
|(In Thousands, Except Share Data)                                                      
|                                                                                       

|                                                |  |                          |         |             |   |             |  |                    |       |       |   |        |  |   |         | 
|----------------------------------------------- |  | ------------------------ | ------- | ----------- | - | ----------- |  | ------------------ | ----- | ----- | - | ------ |  | - | ------- | 
|                                                |  | Payments
  Due by Period |        
|                                                |  |                          |        
|Contractual Obligations                         |  | Within
  1
  Year        |         | 1-3
  Years |   | 4-5
  Years |  | After
  
  5 Years |       | Total |  
|                                                |  |                          |         |             |   |             |  |                    |       |       |  
|                                                |  |                          |         |             |   |             |  |                    |       |       |   |        |  |   |         | 
|Short-term debt                                 |  | $                        | 12,934  |             | $ |            |  | $                  |      |       | $ |       |  | $ | 12,934  | 
|Long-term debt                                  |  |                          |        |             |   | 706         |  |                    | 162   |       |   |       |  |   | 868     | 
|Certificates of deposit                         |  |                          | 485,595 |             |   | 76,193      |  |                    | 3,538 |       |   | 3,313  |  |   | 568,639 | 
|Operating leases                                |  |                          | 410     |             |   | 856         |  |                    | 893   |       |   | 447    |  |   | 2,606   | 
|Severance payments                              |  |                          | 32      |             |   |            |  |                    |      |       |   |       |  |   | 32      | 
|                                                |  |                          |         |             |   |             |  |                    |       |       |   |        |  |   |         | 
|Series B Mandatory
  redeemable preferred stock |  |                          |        |             |   | 831         |  |                    |      |       |   |       |  |   | 831     | 
|Subordinated Debentures                         |  |                          |        |             |   |            |  |                    |      |       |   | 20,620 |  |   | 20,620  | 
|FHLB Advances                                   |  |                          | 103,344 |             |   | 10,204      |  |                    | 3,001 |       |   | 5,066  |  |   | 121,615 | 
|                                                |  |                          |         |             |   |             |  |                    |       |       |   |        |  |   |         | 
|                                                |  |                          |         |             |   |             |  |                    |       |       |   |        |  |   |         | 
|Total contractual cash obligations              |  | $                        | 602,315 |             | $ | 88,790      |  | $                  | 7,594 |       | $ | 29,446 |  | $ | 728,145 | 
|                                                |  |                          |         |             |   |             |  |                    |       |       |   |        |  |   |         | 

Commitments, Contingencies, and Off-Balance Sheet Financial Instruments

Some financial instruments, such as loan commitments, credit lines,
letters of credit, and overdraft protection, are issued to meet customer
financing needs. These are agreements to provide credit or to support the
credit of others, as long as conditions established in the contract are met,
and usually have expiration dates. Commitments may expire without being used.
Off-balance sheet risk to credit loss exists up to the face amount of these
instruments, although material losses are not anticipated. The same credit
policies are used to make such commitments as are used for loans, often
including obtaining collateral at exercise of the commitment. At December 31,
2007, the Company had $262,288 in outstanding loan commitments including
outstanding commitments for various lines of credit. The Company also has
$9,568 of standby letters of credit as of December 31, 2007. See Note 18 of the
Notes to the Consolidated Financial Statements for additional information on
loan commitments and standby letters of credit.

Capital Resources

Stockholders
Equity

The Company is committed to managing capital
for maximum shareholder benefit and maintaining strong protection for
depositors and creditors. Stockholders equity at December 31, 2007 was
$118,876, an increase of $685 or 0.6%, from December 31, 2006. The increase in
stockholders equity was largely the result of net income for the period
partially offset by dividends paid to shareholders and the purchase of treasury
stock. Average equity as a percentage of average assets was 8.90% at December
31, 2007, compared to 10.35% at December 31, 2006. Book value per common share
equaled $19.50 at December 31, 2007, an increase from $18.23 reported at the
end of 2006.

Stock
Repurchase Programs

The 2006 repurchase program
was completed on July 23, 2007. The 2007 repurchase program approved on July
24, 2007 authorized the company to repurchase an additional 500,000 shares, or
approximately 8% of the Companys currently issued and outstanding shares, in
the open market or privately negotiated transactions over an 18 month period.
The expiration date of this program is January 24, 2009. Unless terminated
earlier by resolution of our board of directors, the program will expire on
the earlier of such expiration date or when we have repurchased all shares
authorized for repurchase under the program.

47.

---



|                                                                                       
|---------------------------------------------------------------------------------------
|Centrue Financial Corporation                                                          
|Managements Discussion And
  Analysis Of Financial Condition And Results Of Operations
|(In Thousands, Except Share Data)                                                      
|                                                                                       

Capital
Measurements

The Company and Centrue Bank are expected to
meet a minimum risk-based capital to risk-weighted assets ratio of 8%, of which
at least one-half (or 4%) must be in the form of Tier 1 (core) capital. The
remaining one-half (or 4%) may be in the form of Tier 1 (core) or Tier 2
(supplementary) capital. The amount of loan loss allowance that may be included
in capital is limited to 1.25% of risk-weighted assets. The ratio of Tier 1
(core) and the combined amount of Tier 1 (core) and Tier 2 (supplementary)
capital to risk-weighted assets for the Company was 9.2% and 10.2%,
respectively, at December 31, 2007. The decline in the respective capital
ratios was primarily due to the Company taking advantage of its stock
repurchase plan during the year. The Company is currently, and expects to
continue to be, in compliance with these guidelines.

As of December 31, 2007, the Tier 2
risk-based capital was comprised of $10,755 in allowance for loan losses
(limited to 1.25% of risk-weighted assets). The Series A Preferred Stock is
convertible into common stock, subject to certain adjustments intended
to offset the amount of losses incurred by the Company upon the post-closing
sale of certain securities acquired in conjunction with a previous acquisition.

The following
table sets forth an analysis of the Companys capital ratios:

RISK-BASED
CAPITAL RATIOS(Dollars in
Thousands)

|                          |  |                |           |         |   |             |   |        |         |        |  |     |   |  |     | 
|------------------------- |  | -------------- | --------- | ------- | - | ----------- | - | ------ | ------- | ------ |  | --- | - |  | --- | 
|                          |  | December
  31, |           | Minimum |   | Well        |  
|                          |  |                |           | Capital |   | Capitalized |  
|                          |  | 2007           |           | 2006    |   | 2005        |   | Ratios |         | Ratios | 
|                          |  |                |           |         |   |             |   |        |         |        | 
|                          |  |                |           |         |   |             |   |        |         |        |  |     |   |  |     | 
|Tier 1 risk-based capital |  | $              | 101,831   |         | $ | 99,869      |   | $      | 60,546  |        |  |     |   |  |     | 
|Tier 2 risk-based capital |  |                | 10,755    |         |   | 10,835      |   |        | 6,266   |        |  |     |   |  |     | 
|                          |  |                |           |         |   |             |   |        |         |        |  |     |   |  |     | 
|Total capital             |  | $              | 112,586   |         | $ | 110,704     |   | $      | 66,812  |        |  |     |   |  |     | 
|Risk-weighted assets      |  | $              | 1,102,602 |         | $ | 926,874     |   | $      | 501,342 |        |  |     |   |  |     | 
|Capital ratios:           |  |                |           |         |   |             |   |        |         |        |  |     |   |  |     | 
|Tier 1 risk-based capital |  |                | 9.2       | %       |   | 10.8        | % |        | 12.1    | %      |  | 4.0 | % |  | N/A | 
|Total risk-based capital  |  |                | 10.2      |         |   | 11.9        |   |        | 13.3    |        |  | 8.0 |   |  | N/A | 
|Leverage ratio            |  |                | 7.7       |         |   | 7.9         |   |        | 9.0     |        |  | 4.0 |   |  | N/A | 

Impact of Inflation,
Changing Prices, and Monetary Policies

The financial statements and
related financial data concerning the Company have been prepared in accordance
with accounting principles generally accepted in the United States of America
which require the measurement of financial position and operating results in
terms of historical dollars without considering changes in the relative
purchasing power of money over time due to inflation. The primary effect of
inflation on the operations of the Company is reflected in increased operating
costs. Unlike most industrial companies, virtually all of the assets and
liabilities of a financial institution are monetary in nature. As a result,
changes in interest rates have a more significant effect on the performance of
a financial institution than do the effects of changes in the general rate of
inflation and changes in prices. Interest rates do not necessarily move in the
same direction or in the same magnitude as the prices of goods and services.
Interest rates are highly sensitive to many factors which are beyond the
control of the Company, including the influence of domestic and foreign
economic conditions and the monetary and fiscal policies of the United States
government and federal agencies, particularly the FRB.

48.

---



|                                                                                                                                                            |                                                           
|----------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------
|Item 7A.                                                                                                                                                    | Quantitative and Qualitative Disclosures About Market Risk
|                                                                                                                                                            |                                                           
|The
  discussion under the caption Interest Rate Sensitivity Management contained
  in Item 7 of this Form 10-K is incorporated herein by this reference.
|                                                                                                                                                           
|Item 8.                                                                                                                                                     | Financial Statements and Supplementary Data               

Index to Financial Statements

|                                                                                                            |   
|----------------------------------------------------------------------------------------------------------- | --
|Report of Independent Registered Public
  Accounting Firm                                                   | 50
|                                                                                                            |   
|Consolidated Balance Sheets (December 31,
  2007 and 2006)                                                  | 52
|                                                                                                            |   
|Consolidated Statements of Income 
  (For the years ended December 31, 2007, 2006 and 2005)                 | 53
|                                                                                                            |   
|Consolidated Statements of Stockholders
  Equity 
  (For the years ended December 31, 2007, 2006 and 2005) | 55
|                                                                                                            |   
|Consolidated Statements of Cash Flows 
  (For the years ended December 31, 2007, 2006 and 2005)             | 57
|                                                                                                            |   
|Notes                                                                                                       | 59

Supplementary
Data

The Supplementary Financial
Information required to be included in this Item 8 is hereby incorporated by
reference by Note 24 to the Notes to Consolidated Financial Statements
contained herein.

49.

---



|                            
|----------------------------
|(CROWE(TM) LOGO)            
|                            
|Crowe Chizek and Company LLC
|Member Horwath International

Report of Independent Registered Public Accounting
Firm

Audit Committee
Board of Directors and Stockholders
Centrue Financial Corporation
Ottawa, Illinois

We have audited the
accompanying consolidated balance sheets of Centrue Financial Corporation (the
Company) as of December 31, 2007 and 2006, and the related consolidated
statements of income, stockholders equity and cash flows for each of the years
in the three-year period ended December 31, 2007. We also have audited Centrue
Financial Corporations internal control over financial reporting as of
December 31, 2007, based on criteria established in Internal ControlIntegrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway
Commission (COSO). The Companys management is responsible for these financial
statements, for maintaining effective internal control over financial
reporting, and for its assessment of the effectiveness of internal control over
financial reporting, included in the accompanying Managements Report On
Internal Control Over Financial Reporting as disclosed in Item 9A of Form 10-K.
Our responsibility is to express an opinion on these financial statements and
an opinion on the companys internal control over financial reporting based on
our audits.

We conducted our audits in
accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free of
material misstatement and whether effective internal control over financial
reporting was maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our audit of internal control
over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness
exists, and testing and evaluating the design and operating effectiveness of
internal control based on the assessed risk. Our audits also included
performing such other procedures as we considered necessary in the
circumstances. We believe that our audits provide a reasonable basis for our
opinions.

A companys internal control
over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal control over financial
reporting includes those policies and procedures that (1) pertain to the
maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2)
provide reasonable assurance that transactions are recorded as necessary to
permit preparation of financial statements in accordance with generally
accepted accounting principles, and that receipts and expenditures of the
company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition
of the companys assets that could have a material effect on the financial
statements.

50.

---



Because of its inherent
limitations, internal control over financial reporting may not prevent or
detect misstatements. Also, projections of any evaluation of effectiveness to
future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.

In our opinion, the
consolidated financial statements referred to above present fairly, in all
material respects, the financial position of Centrue Financial Corporation as
of December 31, 2007 and 2006, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2007 in
conformity with accounting principles generally accepted in the United States
of America. Also in our opinion, Centrue Financial Corporation maintained, in
all material respects, effective internal control over financial reporting as
of December 31, 2007, based on criteria established in Internal
ControlIntegrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO).

|                    |                                  
|------------------- | ---------------------------------
|                    | -s- Crowe Chizek and Company  LLC
|                    |                                  
|                    | Crowe Chizek and Company  LLC    
|Oak Brook, Illinois |                                  
|March 12, 2008      |                                  

51.

---



|                                                                            
|----------------------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                               
|Consolidated Balance Sheets                                                 
|December 31, 2007 and 2006 (In Thousands, Except Share and
  Per Share Data)

|                                                                                                                   |  |      |           |      |   |           |  
|------------------------------------------------------------------------------------------------------------------ |  | ---- | --------- | ---- | - | --------- | -
|                                                                                                                   |  | 2007 |           | 2006 |  
|                                                                                                                   |  |      |           |      |  
|ASSETS                                                                                                             |  |      |           |      |   |           |  
|Cash and cash equivalents                                                                                          |  | $    | 51,628    |      | $ | 40,195    |  
|Securities available-for-sale                                                                                      |  |      | 238,661   |      |   | 290,224   |  
|Restricted securities                                                                                              |  |      | 10,670    |      |   | 8,468     |  
|Loans                                                                                                              |  |      | 957,285   |      |   | 836,944   |  
|Allowance for loan losses                                                                                          |  |      | (10,755   | )    |   | (10,835   | )
|                                                                                                                   |  |      |           |      |   |           |  
|Net loans                                                                                                          |  |      | 946,530   |      |   | 826,109   |  
|Cash value of life insurance                                                                                       |  |      | 26,895    |      |   | 25,904    |  
|Mortgage servicing rights                                                                                          |  |      | 3,161     |      |   | 3,510     |  
|Premises and equipment, net                                                                                        |  |      | 35,615    |      |   | 35,403    |  
|Goodwill                                                                                                           |  |      | 25,498    |      |   | 25,396    |  
|Intangible assets, net                                                                                             |  |      | 11,007    |      |   | 12,733    |  
|Other real estate                                                                                                  |  |      | 2,937     |      |   | 2,136     |  
|Other assets                                                                                                       |  |      | 12,397    |      |   | 12,947    |  
|                                                                                                                   |  |      |           |      |   |           |  
|                                                                                                                   |  |      |           |      |   |           |  
|Total assets                                                                                                       |  | $    | 1,364,999 |      | $ | 1,283,025 |  
|                                                                                                                   |  |      |           |      |   |           |  
|                                                                                                                   |  |      |           |      |   |           |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                               |  |      |           |      |   |           |  
|Liabilities                                                                                                        |  |      |           |      |   |           |  
|Deposits                                                                                                           |  |      |           |      |   |           |  
|Non-interest-bearing                                                                                               |  | $    | 114,360   |      | $ | 125,585   |  
|Interest-bearing                                                                                                   |  |      | 918,662   |      |   | 901,025   |  
|                                                                                                                   |  |      |           |      |   |           |  
|Total deposits                                                                                                     |  |      | 1,033,022 |      |   | 1,026,610 |  
|Securities sold under agreements to repurchase                                                                     |  |      | 44,937    |      |   | 36,319    |  
|Federal Home Loan Bank advances                                                                                    |  |      | 121,615   |      |   | 63,147    |  
|Notes payable                                                                                                      |  |      | 13,802    |      |   | 9,015     |  
|Series B mandatory redeemable preferred stock                                                                      |  |      | 831       |      |   | 831       |  
|Subordinated debentures                                                                                            |  |      | 20,620    |      |   | 20,620    |  
|Other liabilities                                                                                                  |  |      | 11,296    |      |   | 8,292     |  
|                                                                                                                   |  |      |           |      |   |           |  
|Total liabilities                                                                                                  |  |      | 1,246,123 |      |   | 1,164,834 |  
|                                                                                                                   |  |      |           |      |   |           |  
|Commitments and contingent liabilities                                                                             |  |      |          |      |   |          |  
|                                                                                                                   |  |      |           |      |   |           |  
|Stockholders equity                                                                                               |  |      |           |      |   |           |  
|Series A Convertible Preferred Stock (aggregate
liquidation
  preference of $2,762)                                |  |      | 500       |      |   | 500       |  
|Common stock, $1 par value, 15,000,000 shares
authorized; 7,438,110
  and 7,412,210 shares issued in 2007 and 2006 |  |      | 7,438     |      |   | 7,412     |  
|Surplus                                                                                                            |  |      | 70,901    |      |   | 70,460    |  
|Retained earnings                                                                                                  |  |      | 60,344    |      |   | 52,469    |  
|Accumulated other comprehensive income                                                                             |  |      | 939       |      |   | 235       |  
|                                                                                                                   |  |      |           |      |   |           |  
|                                                                                                                   |  |      | 140,122   |      |   | 131,076   |  
|Treasury stock, at cost, 1,366,564 shares - 2007
and 957,142  2006                                                |  |      | (21,246   | )    |   | (12,885   | )
|                                                                                                                   |  |      |           |      |   |           |  
|Total stockholders equity                                                                                         |  |      | 118,876   |      |   | 118,191   |  
|                                                                                                                   |  |      |           |      |   |           |  
|                                                                                                                   |  |      |           |      |   |           |  
|Total liabilities and stockholders
equity                                                                         |  | $    | 1,364,999 |      | $ | 1,283,025 |  
|                                                                                                                   |  |      |           |      |   |           |  

See Accompanying Notes to
Consolidated Financial Statements.

52.

---



CENTRUE FINANCIAL CORPORATIONCONSOLIDATED
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005 (IN THOUSANDS, EXCEPT PER SHARE
DATA)

|                                                                             |  |      |        |      |   |        |   |   |        |  
|---------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ------ | - | - | ------ | -
|                                                                             |  | 2007 |        | 2006 |   | 2005   |  
|                                                                             |  |      |        |      |   |        |  
|Interest income                                                              |  |      |        |      |   |        |   |   |        |  
|Loans                                                                        |  | $    | 69,060 |      | $ | 33,717 |   | $ | 27,251 |  
|Securities                                                                   |  |      |        |      |   |        |   |   |        |  
|Taxable                                                                      |  |      | 12,419 |      |   | 8,785  |   |   | 6,331  |  
|Exempt from federal income taxes                                             |  |      | 1,520  |      |   | 976    |   |   | 993    |  
|Federal funds sold and other                                                 |  |      | 577    |      |   | 380    |   |   | 122    |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Total interest income                                                        |  |      | 83,576 |      |   | 43,858 |   |   | 34,697 |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Interest expense                                                             |  |      |        |      |   |        |   |   |        |  
|Deposits                                                                     |  |      | 37,560 |      |   | 18,204 |   |   | 10,910 |  
|Federal funds purchased and securities sold
under agreements to
  repurchase |  |      | 1,881  |      |   | 407    |   |   | 197    |  
|Advances from the Federal Home Loan
Bank                                     |  |      | 2,834  |      |   | 1,824  |   |   | 2,128  |  
|Series B Mandatory Redeemable                                                |  |      | 50     |      |   | 50     |   |   | 50     |  
|Subordinated debentures                                                      |  |      | 1,688  |      |   | 242    |   |   |       |  
|Notes payable                                                                |  |      | 722    |      |   | 624    |   |   | 419    |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Total interest expense                                                       |  |      | 44,735 |      |   | 21,351 |   |   | 13,704 |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Net interest income                                                          |  |      | 38,841 |      |   | 22,507 |   |   | 20,993 |  
|Provision (credit) for loan losses                                           |  |      | 675    |      |   | (1,275 | ) |   | 250    |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Net interest income after provision for loan losses                          |  |      | 38,166 |      |   | 23,782 |   |   | 20,743 |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Noninterest income                                                           |  |      |        |      |   |        |   |   |        |  
|Service charges                                                              |  |      | 6,789  |      |   | 2,473  |   |   | 1,996  |  
|Trust income                                                                 |  |      | 942    |      |   | 858    |   |   | 811    |  
|Mortgage banking income                                                      |  |      | 1,743  |      |   | 1,113  |   |   | 1,350  |  
|Brokerage commissions and fees                                               |  |      | 795    |      |   | 326    |   |   | 513    |  
|Bank owned life insurance                                                    |  |      | 991    |      |   | 628    |   |   | 545    |  
|Securities losses                                                            |  |      | (29    | )    |   | (104   | ) |   | (79    | )
|Gain on sale of OREO                                                         |  |      | 1,107  |      |   |       |   |   | 4      |  
|Other income                                                                 |  |      | 3,327  |      |   | 1,394  |   |   | 1,158  |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|                                                                             |  |      | 15,665 |      |   | 6,688  |   |   | 6,298  |  
|Noninterest expenses                                                         |  |      |        |      |   |        |   |   |        |  
|Salaries and employee benefits                                               |  |      | 17,635 |      |   | 12,181 |   |   | 12,546 |  
|Occupancy, net                                                               |  |      | 4,043  |      |   | 1,714  |   |   | 1,488  |  
|Furniture and equipment                                                      |  |      | 2,621  |      |   | 2,276  |   |   | 1,852  |  
|Marketing                                                                    |  |      | 1,035  |      |   | 697    |   |   | 491    |  
|Supplies and printing                                                        |  |      | 653    |      |   | 421    |   |   | 343    |  
|Telephone                                                                    |  |      | 834    |      |   | 490    |   |   | 425    |  
|Data processing                                                              |  |      | 1,650  |      |   | 788    |   |   | 490    |  
|Amortization of intangible assets                                            |  |      | 2,307  |      |   | 416    |   |   | 120    |  
|Other expenses                                                               |  |      | 6,555  |      |   | 3,740  |   |   | 3,588  |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|                                                                             |  |      | 37,333 |      |   | 22,723 |   |   | 21,343 |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Income from continuing operations before income
  taxes                      |  |      | 16,498 |      |   | 7,747  |   |   | 5,698  |  
|Income taxes                                                                 |  |      | 5,175  |      |   | 2,145  |   |   | 1,319  |  
|                                                                             |  |      |        |      |   |        |   |   |        |  
|Income from continuing operations                                            |  | $    | 11,323 |      | $ | 5,602  |   | $ | 4,379  |  

See Accompanying Notes to
Consolidated Financial Statements.

53.

---



CENTRUE FINANCIAL CORPORATIONCONSOLIDATED
STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005 (IN THOUSANDS, EXCEPT PER SHARE
DATA)

|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|-------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ----- | - | - | ----- | -
|                                                                                                   |  | 2007 |        | 2006 |   | 2005  |  
|                                                                                                   |  |      |        |      |   |       |  
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Discontinued operations:                                                                           |  |      |        |      |   |       |   |   |       |  
|Loss from operations of discontinued insurance
unit (including loss
  on disposal of $452 in 2006) |  |      |       |      |   | (677  | ) |   | (326  | )
|Income tax benefit                                                                                 |  |      |       |      |   | (262  | ) |   | (120  | )
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Loss on discontinued operations                                                                    |  |      |       |      |   | (415  | ) |   | (206  | )
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Net income                                                                                         |  |      | 11,323 |      |   | 5,187 |   |   | 4,173 |  
|Preferred stock dividends                                                                          |  |      | 207    |      |   | 207   |   |   | 207   |  
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Net income for common stockholders                                                                 |  | $    | 11,116 |      | $ | 4,980 |   | $ | 3,966 |  
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Basic earnings per common share from continuing
operations for common
  stockholders               |  | $    | 1.75   |      | $ | 1.31  |   | $ | 1.06  |  
|Basic earnings per common share from
discontinued operations for
  common stockholders             |  |      |       |      |   | (0.10 | ) |   | (0.05 | )
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Basic earnings per common share for common
stockholders                                            |  | $    | 1.75   |      | $ | 1.21  |   | $ | 1.01  |  
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Diluted earnings per common share from
continuing operations for
  common stockholders             |  | $    | 1.74   |      | $ | 1.30  |   | $ | 1.04  |  
|Diluted earnings per common share from
discontinued operations for
  common stockholders           |  |      |       |      |   | (0.10 | ) |   | (0.05 | )
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Diluted earnings per common share for common
stockholders                                          |  | $    | 1.74   |      | $ | 1.20  |   | $ | 0.99  |  
|                                                                                                   |  |      |        |      |   |       |   |   |       |  
|Dividends per common share for common
stockholders                                                 |  | $    | 0.51   |      | $ | 0.48  |   | $ | 0.44  |  
|                                                                                                   |  |      |        |      |   |       |   |   |       |  

See Accompanying Notes to
Consolidated Financial Statements.

54.

---



|                                                                               
|-------------------------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                                  
|CONSOLIDATED STATEMENTS OF
  STOCKHOLDERS EQUITY                              
|YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005 (IN THOUSANDS, EXCEPT
SHARE
DATA)
|                                                                               

|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ | --- | -------------- | - | ------- |  | ------------------- | ------ | -------------------------------------------- | - | ---------------- | - | ----- | ------ | - | - | ------- | - | - | ------- | -
|                                                                                                                                  |  | Series A
  Convertible
  Preferred
  Stock |     | Common
  Stock |   | Surplus |  | Retained
  Earnings |        | Accumulated
  Other
  Comprehensive
  Income |   | Treasury
  Stock |   | Total |       
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |       
|Balance, January
  1, 2005                                                                                                        |  | $                                          | 500 |                | $ | 4,641   |  | $                   | 22,632 |                                              | $ | 46,592           |   | $     | 1,351  |   | $ | (5,469  | ) | $ | 70,247  |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Common stock
  dividends                                                                                                          |  |                                            |    |                |   |        |  |                     |       |                                              |   | (1,721           | ) |       |       |   |   |        |   |   | (1,721  | )
|Preferred stock
  dividends                                                                                                       |  |                                            |    |                |   |        |  |                     |       |                                              |   | (207             | ) |       |       |   |   |        |   |   | (207    | )
|Exercise of stock
  options (43,486 shares)                                                                                       |  |                                            |    |                |   | 43      |  |                     | 535    |                                              |   |                 |   |       |       |   |   |        |   |   | 578     |  
|Purchase of
  268,754 shares of treasury stock                                                                                    |  |                                            |    |                |   |        |  |                     |       |                                              |   |                 |   |       |       |   |   | (5,739  | ) |   | (5,739  | )
|Comprehensive
  income                                                                                                            |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Net income                                                                                                                        |  |                                            |    |                |   |        |  |                     |       |                                              |   | 4,173            |   |       |       |   |   |        |   |   | 4,173   |  
|Net change in
  fair value of securities classified as available-for-sale, net of income
  taxes and reclassification adjustments |  |                                            |    |                |   |        |  |                     |       |                                              |   |                 |   |       | (1,256 | ) |   |        |   |   | (1,256  | )
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Total
  comprehensive income                                                                                                      |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   | 2,917   |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Balance, December
  31, 2005                                                                                                      |  | $                                          | 500 |                | $ | 4,684   |  | $                   | 23,167 |                                              | $ | 48,837           |   | $     | 95     |   | $ | (11,208 | ) | $ | 66,075  |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Common stock dividends                                                                                                            |  |                                            |    |                |   |        |  |                     |       |                                              |   | (1,348           | ) |       |       |   |   |        |   |   | (1,348  | )
|Preferred stock
  dividends                                                                                                       |  |                                            |    |                |   |        |  |                     |       |                                              |   | (207             | ) |       |       |   |   |        |   |   | (207    | )
|Exercise of stock
  options (27,300 shares)                                                                                       |  |                                            |    |                |   | 27      |  |                     | 329    |                                              |   |                 |   |       |       |   |   |        |   |   | 356     |  
|Issuance of
  2,700,517 shares of common stock related to merger                                                                  |  |                                            |    |                |   | 2,701   |  |                     | 46,611 |                                              |   |                 |   |       |       |   |   |        |   |   | 49,312  |  
|Stock-based
  compensation                                                                                                        |  |                                            |    |                |   |        |  |                     | 353    |                                              |   |                 |   |       |       |   |   |        |   |   | 353     |  
|Purchase of
  79,625 shares of treasury stock                                                                                     |  |                                            |    |                |   |        |  |                     |       |                                              |   |                 |   |       |       |   |   | (1,677  | ) |   | (1,677  | )
|Comprehensive
  income                                                                                                            |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Net income                                                                                                                        |  |                                            |    |                |   |        |  |                     |       |                                              |   | 5,187            |   |       |       |   |   |        |   |   | 5,187   |  
|Net change in
  fair value of securities classified as available-for-sale, net of income
  taxes and reclassification adjustments |  |                                            |    |                |   |        |  |                     |       |                                              |   |                 |   |       | 140    |   |   |        |   |   | 140     |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Total
  comprehensive income                                                                                                      |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   | 5,327   |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  
|Balance, December
  31, 2006                                                                                                      |  | $                                          | 500 |                | $ | 7,412   |  | $                   | 70,460 |                                              | $ | 52,469           |   | $     | 235    |   | $ | (12,885 | ) | $ | 118,191 |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |        |   |   |         |   |   |         |  

See Accompanying Notes to
Consolidated Financial Statements.

55.

---



|                                                                               
|-------------------------------------------------------------------------------
|CENTRUE FINANCIAL CORPORATION                                                  
|CONSOLIDATED STATEMENTS OF
  STOCKHOLDERS EQUITY                              
|YEARS ENDED DECEMBER 31, 2007, 2006, AND 2005 (IN THOUSANDS, EXCEPT
SHARE
DATA)
|                                                                               

|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |     |  |   |         |   |   |         |  
|--------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------ | --- | -------------- | - | ------- |  | ------------------- | ------ | -------------------------------------------- | - | ---------------- | - | ----- | --- |  | - | ------- | - | - | ------- | -
|                                                                                                                                  |  | Series A
  Convertible
  Preferred
  Stock |     | Common
  Stock |   | Surplus |  | Retained
  Earnings |        | Accumulated
  Other
  Comprehensive
  Income |   | Treasury
  Stock |   | Total |    
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |    
|Balance, December
  31, 2006                                                                                                      |  | $                                          | 500 |                | $ | 7,412   |  | $                   | 70,460 |                                              | $ | 52,469           |   | $     | 235 |  | $ | (12,885 | ) | $ | 118,191 |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |     |  |   |         |   |   |         |  
|Common stock
  dividends                                                                                                          |  |                                            |    |                |   |        |  |                     |       |                                              |   | (3,241           | ) |       |    |  |   |        |   |   | (3,241  | )
|Preferred stock
  dividends                                                                                                       |  |                                            |    |                |   |        |  |                     |       |                                              |   | (207             | ) |       |    |  |   |        |   |   | (207    | )
|Exercise of stock
  options (25,900 shares)                                                                                       |  |                                            |    |                |   | 26      |  |                     | 360    |                                              |   |                 |   |       |    |  |   |        |   |   | 386     |  
|Restricted stock
  awards granted                                                                                                 |  |                                            |    |                |   |        |  |                     | (90    | )                                            |   |                 |   |       |    |  |   | 90      |   |   |        |  
|Share-based
  compensation                                                                                                        |  |                                            |    |                |   |        |  |                     | 171    |                                              |   |                 |   |       |    |  |   |        |   |   | 171     |  
|Purchase of
  409,422 shares of treasury stock                                                                                    |  |                                            |    |                |   |        |  |                     |       |                                              |   |                 |   |       |    |  |   | (8,451  | ) |   | (8,451  | )
|Comprehensive
  income                                                                                                            |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |     |  |   |         |   |   |         |  
|Net income                                                                                                                        |  |                                            |    |                |   |        |  |                     |       |                                              |   | 11,323           |   |       |    |  |   |        |   |   | 11,323  |  
|Net change in fair
  value of securities classified as available-for-sale, net of income taxes and
  reclassification adjustments |  |                                            |    |                |   |        |  |                     |       |                                              |   |                 |   |       | 704 |  |   |        |   |   | 704     |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |     |  |   |         |   |   |         |  
|Total
  comprehensive income                                                                                                      |  |                                            |    |                |   |        |  |                     |       |                                              |   |                 |   |       |    |  |   |        |   |   | 12,027  |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |     |  |   |         |   |   |         |  
|Balance, December
  31, 2007                                                                                                      |  | $                                          | 500 |                | $ | 7,438   |  | $                   | 70,901 |                                              | $ | 60,344           |   | $     | 939 |  | $ | (21,246 | ) | $ | 118,876 |  
|                                                                                                                                  |  |                                            |     |                |   |         |  |                     |        |                                              |   |                  |   |       |     |  |   |         |   |   |         |  

See Accompanying Notes to
Consolidated Financial Statements.

56.

---



CENTRUEFINANCIALCORPORATIONCONSOLIDATEDSTATEMENTSOFCASHFLOWS

YEARSENDEDDECEMBER31, 2007, 2006, AND2005 (INTHOUSANDS)

|                                                                                   |  |      |          |      |   |         |   |   |         |  
|---------------------------------------------------------------------------------- |  | ---- | -------- | ---- | - | ------- | - | - | ------- | -
|                                                                                   |  | 2007 |          | 2006 |   | 2005    |  
|                                                                                   |  |      |          |      |   |         |  
|Cash flows from operating activities                                               |  |      |          |      |   |         |   |   |         |  
|Net Income                                                                         |  | $    | 11,323   |      | $ | 5,187   |   | $ | 4,173   |  
|Adjustments to reconcile net income to net cash
provided by operating
  activities |  |      |          |      |   |         |   |   |         |  
|Depreciation                                                                       |  |      | 2,366    |      |   | 2,149   |   |   | 1,839   |  
|Amortization of intangible assets                                                  |  |      | 2,307    |      |   | 457     |   |   | 170     |  
|Amortization of mortgage servicing rights,
net                                     |  |      | 525      |      |   | 473     |   |   | 535     |  
|Amortization of bond premiums, net                                                 |  |      | 178      |      |   | 165     |   |   | 1,114   |  
|Share based compensation                                                           |  |      | 171      |      |   | 353     |   |   |        |  
|Federal Home Loan Bank stock dividend                                              |  |      |         |      |   |        |   |   | (191    | )
|Provision for loan losses                                                          |  |      | 675      |      |   | (1,275  | ) |   | 250     |  
|Provision for deferred income taxes                                                |  |      | 533      |      |   | 2,460   |   |   | 30      |  
|Earnings on bank-owned life insurance                                              |  |      | (991     | )    |   | (628    | ) |   | (545    | )
|Securities losses/(gains), net                                                     |  |      | 29       |      |   | 104     |   |   | 79      |  
|Gain on sale of assets, net                                                        |  |      |         |      |   | (14     | ) |   | (4      | )
|Gain (loss) on sale of real estate acquired in
settlement of loans                 |  |      | (1,107   | )    |   | (68     | ) |   | (42     | )
|Gain on sale of loans                                                              |  |      | (1,262   | )    |   | (762    | ) |   | (1,034  | )
|Proceeds from sale of loans held for
sale                                          |  |      | 82,810   |      |   | 49,039  |   |   | 51,838  |  
|Origination of loans held for sale                                                 |  |      | (78,296  | )    |   | (47,855 | ) |   | (50,378 | )
|Change in assets and liabilities                                                   |  |      |          |      |   |         |   |   |         |  
|(Increase) decrease in other assets                                                |  |      | 1,371    |      |   | (5,374  | ) |   | (1,334  | )
|Increase (decrease) in other
liabilities                                           |  |      | 384      |      |   | 2,963   |   |   | 2,235   |  
|                                                                                   |  |      |          |      |   |         |   |   |         |  
|Net cash provided by operating
activities                                          |  |      | 21,016   |      |   | 7,374   |   |   | 8,735   |  
|                                                                                   |  |      |          |      |   |         |   |   |         |  
|Cash flows from investing activities                                               |  |      |          |      |   |         |   |   |         |  
|Proceeds from maturities and paydowns of
securities available for sale             |  |      | 60,616   |      |   | 39,380  |   |   | 56,414  |  
|Proceeds from sales of securities available for
sale                               |  |      | 2,548    |      |   | 19,377  |   |   | 10,885  |  
|Purchases of securities available for
sale                                         |  |      | (9,838   | )    |   | (38,908 | ) |   | (74,972 | )
|Purchase (redemption) of restricted
securities                                     |  |      | (2,202   | )    |   | 1,730   |   |   |        |  
|Purchase of loans                                                                  |  |      |         |      |   | (19,513 | ) |   | (3,275  | )
|Net decrease (increase) in loans                                                   |  |      | (133,124 | )    |   | 32,371  |   |   | 2,730   |  
|Purchase of premises and equipment                                                 |  |      | (2,578   | )    |   | (2,761  | ) |   | (2,979  | )
|Proceeds from sale of OREO                                                         |  |      | 8,804    |      |   | 979     |   |   | 914     |  
|Cash acquired, net of cash (paid) for
acquisitions                                 |  |      |         |      |   | 26,506  |   |   |        |  
|Purchase of Missouri Bank Charter                                                  |  |      | (581     | )    |   |        |   |   |        |  
|Sale of insurance unit                                                             |  |      |         |      |   | 856     |   |   |        |  
|Sale of branches, net of premium
received                                          |  |      |         |      |   | (6,054  | ) |   |        |  
|                                                                                   |  |      |          |      |   |         |   |   |         |  
|Net cash provided by (used in) investing
activities                                |  |      | (76,355  | )    |   | 53,963  |   |   | (10,283 | )

See Accompanying Notes to
Consolidated Financial Statements.

57.

---



CENTRUEFINANCIALCORPORATION

CONSOLIDATEDSTATEMENTSOFCASHFLOWS

YEARSENDEDDECEMBER31, 2007, 2006, AND2005 (INTHOUSANDS)

|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|------------------------------------------------------------------------------------------------------- |  | ---- | ------- | ---- | - | ------- | - | - | ------- | -
|                                                                                                        |  | 2007 |         | 2006 |   | 2005    |  
|                                                                                                        |  |      |         |      |   |         |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|Cash flows from financing
  activities                                                                  |  |      |         |      |   |         |   |   |         |  
|Net increase (decrease) in deposits                                                                     |  | $    | 6,412   |      | $ | (34,853 | ) | $ | 31,364  |  
|Net increase (decrease) in federal funds
purchased and securities sold
  under agreements to repurchase |  |      | 8,618   |      |   | 7,202   |   |   | (12,110 | )
|Repayment of advances from the Federal Home Loan
Bank                                                   |  |      | (58,656 | )    |   | (13,514 | ) |   | (16,900 | )
|Proceeds from advances from the Federal Home
Loan Bank                                                  |  |      | 117,124 |      |   | 10      |   |   | 5,000   |  
|Payments on notes payable                                                                               |  |      | (463    | )    |   | (2,869  | ) |   | (2,586  | )
|Proceeds from notes payable                                                                             |  |      | 5,250   |      |   | 1,400   |   |   | 5,425   |  
|Redemption of subordinated debentures                                                                   |  |      | (10,310 | )    |   |        |   |   |        |  
|Issuance of subordinated debentures                                                                     |  |      | 10,310  |      |   |        |   |   |        |  
|Dividends on common stock                                                                               |  |      | (3,241  | )    |   | (1,348  | ) |   | (1,721  | )
|Dividends on preferred stock                                                                            |  |      | (207    | )    |   | (207    | ) |   | (207    | )
|Proceeds from exercise of stock
options                                                                 |  |      | 386     |      |   | 356     |   |   | 578     |  
|Purchase of treasury stock                                                                              |  |      | (8,451  | )    |   | (1,677  | ) |   | (5,739  | )
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|Net cash provided by (used in) financing
activities                                                     |  |      | 66,772  |      |   | (45,500 | ) |   | 3,104   |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|Net
  increase (decrease) in cash and cash equivalents                                                  |  |      | 11,433  |      |   | 15,837  |   |   | 1,556   |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|Cash and cash equivalents                                                                               |  |      |         |      |   |         |   |   |         |  
|Beginning of year                                                                                       |  |      | 40,195  |      |   | 24,358  |   |   | 22,802  |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|End of year                                                                                             |  | $    | 51,628  |      | $ | 40,195  |   | $ | 24,358  |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|                                                                                                        |  |      |         |      |   |         |   |   |         |  
|Supplemental
  disclosures of cash flow information                                                     |  |      |         |      |   |         |   |   |         |  
|Cash payments for                                                                                       |  |      |         |      |   |         |   |   |         |  
|Interest                                                                                                |  | $    | 44,417  |      | $ | 21,932  |   | $ | 12,980  |  
|Income taxes                                                                                            |  |      | 3,292   |      |   | 1,386   |   |   | 862     |  
|Transfers from loans to other real estate
owned                                                         |  |      | 8,776   |      |   | 2,743   |   |   | 675     |  
|Business Combination in 2006 (see Note
23)                                                              |  |      |         |      |   |         |   |   |         |  

See Accompanying Notes to
Consolidated Financial Statements.

58.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and Summary of Significant
Accounting Policies

Centrue Financial
Corporation (the Company) is a bank holding company organized under the laws
of the State of Delaware. On November 13, 2006, the Company (formerly known as
UnionBancorp, Inc. and now known as Centrue Financial Corporation) merged with
Centrue Financial Corporation (former Centrue), parent of Centrue Bank with the
Company being the surviving entity in the merger. Operating results of former
Centrue are included in the consolidated financial statements since the date of
the acquisition. The Company provides a full range of banking services to
individual and corporate customers located in markets extending from the far western and southern suburbs of
the Chicago metropolitan area across Central and Northern Illinois down to the
metropolitan St. Louis area. These services include demand, time, and
savings deposits; lending; mortgage banking; brokerage; asset management; and
trust services. The Company is subject to competition from other financial
institutions and nonfinancial institutions providing financial services.
Additionally, the Company and its subsidiary Centrue Bank are subject to
regulations of certain regulatory agencies and undergo periodic examinations by
those regulatory agencies.

Basis
of presentation

The consolidated financial
statements include the accounts of the Company and Centrue Bank. Intercompany
balances and transactions have been eliminated in consolidation.

The accompanying financial
statements have been prepared in conformity with U. S. generally accepted
accounting principles and with general practice in the banking industry. In preparing
the financial statements, management makes estimates and assumptions based on
available information that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of income and expenses during
the reporting period, and actual results could differ. The allowance for loan
losses, carrying value of goodwill, value of mortgage servicing rights,
deferred taxes, and fair values of financial instruments are particularly
subject to change.

Assets held in an agency or
fiduciary capacity, other than trust cash on deposit with Centrue Bank, are not
assets of the Company and, accordingly, are not included in the accompanying
consolidated financial statements.

Cash
flows

Cash and cash equivalents
includes cash, deposits with other financial institutions with maturities under
90 days, and federal funds sold. Net cash flows are reported for customer loan
and deposit transactions, repurchase agreements, and federal funds purchased.

59.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and Summary of Significant
Accounting Policies (Continued)

Securities

Available-for-sale.Securities
classified as available-for-sale are those securities that the Company intends
to hold for an indefinite period of time, but not necessarily to maturity. Any
decision to sell a security classified as available-for-sale would be based on
various factors, including significant movements in interest rates, changes in
the maturity mix of the Companys assets and liabilities, liquidity needs,
regulatory capital considerations, and other similar factors. Securities
available-for-sale are carried at fair value with unrealized gains or losses,
net of the related deferred income tax effect, reported in other comprehensive
income. Declines in the fair value of securities below their cost that are
other than temporary are reflected as realized losses. In estimating
other-than-temporary losses, management considers: the length of time and
extent that fair value has been less than cost; the financial condition
and near term prospects of the issuer; and the Companys ability and intent to
hold the security for a period sufficient to allow for any anticipated recovery
in fair value. Securities are written down to fair value when a decline in fair
value is not temporary.

Interest income is reported
net of amortization of premiums and accretion of discounts. Amortization of
purchase premium or discount is included in interest income. Premiums and
discounts on securities are amortized over the level-field method without
anticipating prepayments except for mortgage backed securities where
prepayments are anticipated. Gains or losses from the sale of securities are
determined using the specific identification method.

Restricted Securities. The
Company owns investments in the stock of the Federal Reserve Bank, the Federal
Home Loan Banks of Chicago and Des Moines (FHLB). No ready market exists for
these stocks and they have no quoted market values. Federal Reserve Bank stock
is redeemable at par. The Bank, as a member of the FHLB, is required to
maintain an investment in the capital stock of the FHLB. The stock is
redeemable at par by the FHLB and periodically evaluated for impairment. The
Companys ability to redeem the shares owned is dependent on the redemption
practices of the FHLB.

Loan
commitments and related financial instruments

Financial instruments include
off-balance-sheet credit instruments, such as commitments to make loans and
commercial letters of credit, issued to meet customer financing needs. The face
amount for these items represents the exposure to loss, before considering
customer collateral or ability to repay. Such financial instruments are
recorded when they are funded.

60.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and Summary of Significant
Accounting Policies (Continued)

Loans

Loans that management has
the intent and ability to hold for the foreseeable future or until maturity or
payoff are reported at the principal balance outstanding, net of unearned
interest, deferred loan fees and costs, and an allowance for loan losses.
Interest income is accrued on the unpaid principal balance.

Interest income on mortgage
and commercial loans is discontinued at the time the loan is 90 days delinquent
unless the loan is well-secured and in the process of collection. Consumer
loans are typically charged off no later than 120 days past due. Past due
status is based on the contractual terms of the loan. In all cases, loans are
placed on nonaccrual or charged-off at an earlier date if collection of principal
or interest is considered doubtful.

All interest accrued but not
received for loans placed on nonaccrual are reversed against interest income.
Interest received on such loans is accounted for on the cash-basis or
cost-recovery method, until qualifying for return to accrual. Loans are
returned to accrual status when all the principal and interest amounts
contractually due are brought current and future payments are reasonably
assured.

Mortgage loans originated
and intended for sale in the secondary market are carried at the lower of
aggregate cost or market, as determined by outstanding commitments from
investors. Net unrealized losses, if any, are recorded as a valuation allowance
and charged to earnings.

Mortgage loans held for sale
are generally sold with servicing rights retained. The carrying value of
mortgage loans sold is reduced by the cost allocated to the servicing right.
Gains and losses on sales of mortgage loans are based on the difference between
the selling price and the carrying value of the related loan sold.

The allowance for loan
losses is a valuation allowance for probable incurred credit losses. Loan
losses are charged against the allowance when management believes and confirms
the loan balance to be uncollectible. Subsequent recoveries, if any, are
credited to the allowance. Management estimates the allowance balance required
using past loan loss experience, the nature and volume of the portfolio,
information about specific borrower situations and estimated collateral values,
economic conditions, and other factors. Allocations of the allowance may be
made for specific loans, but the entire allowance is available for any loan
that, in managements judgment, should be charged-off.

The allowance consists of
specific and general components. The specific component relates to loans that
are individually classified as impaired or loans otherwise classified as
substandard or doubtful. The general component covers non-classified loans and
is based on historical loss experience adjusted for current factors.

61.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and
Summary of Significant Accounting Policies (Continued)

A loan is considered
impaired when, based on current information and events, it is probable that the
Company will be unable to collect the scheduled payments of principal or
interest when due according to the contractual terms of the loan agreement.
Factors considered by management in determining impairment include payment
status, collateral value, and the probability of collecting scheduled principal
and interest payments when due. Loans that experience insignificant payment
delays and payment shortfalls generally are not classified as impaired.
Management determines the significance of payment delays and payment shortfalls
on a case-by-case basis, taking into consideration all of the circumstances
surrounding the loan and the borrower, including the length of delay, the
reasons for the delay, the borrowers prior payment record, and the amount of
the shortfall in relation to the principal and interest owed. Impairment is
measured on a loan by loan basis for commercial and commercial real estate
loans by either the present value of expected future cash flows discounted at
the loans effective interest rate, the loans obtainable market price, or the
fair value of the collateral if the loan is collateral dependent. Large groups
of smaller balance homogeneous loans are collectively evaluated for impairment.
Accordingly, the Company does not separately identify individual consumer and
residential loans for impairment disclosures.

Mortgage
servicing rights

Servicing rights are
recognized separately when they are acquired through sales of loans. For sales
of mortgage loans prior to January 1, 2007, a portion of the cost of the loan
was allocated to the servicing right based on relative fair values. The Company
adopted SFAS No. 156 on January 1, 2007, and for sales of mortgage loans
beginning in 2007, servicing rights are initially recorded at fair value with
the income statement effect recorded in gains on sales of loans. Fair value is
based on market prices for comparable mortgage servicing contracts, when
available, or alternatively, is based on a valuation model that calculates the
present value of estimated future net servicing income. The valuation model
incorporates assumptions that market participants would use in estimating
future net servicing income, such as the cost to service, the discount rate,
the custodial earnings rate, an inflation rate, ancillary income, prepayment
speeds and default rates and losses. The Company compares the valuation model
inputs and results to published industry data in order to validate the model
results and assumptions. All classes of servicing assets are subsequently
measured using the amortization method which requires servicing rights to be
amortized into non-interest income in proportion to, and over the period of,
the estimated future net servicing income of the underlying loans.

Servicing assets are
evaluated for impairment based upon the fair value of the rights as compared to
carrying amount. Impairment is determined by stratifying rights into groupings
based on predominant risk characteristics, such as interest rate, loan type and
investor type. Impairment is recognized through a valuation allowance for an
individual grouping, to the extent that fair value is less than the carrying
amount. If the Company later determines that all or a portion of the impairment
no longer exists for a particular grouping, a reduction of the allowance may be
recorded as an increase to income. Changes in valuation allowances are reported
with noninterest expense in the other expense line on the income statement. The
fair values of servicing rights are subject to significant fluctuations as a
result of changes in estimated and actual prepayment speeds and default rates
and losses.

62.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and
Summary of Significant Accounting Policies (Continued)

Servicing fee income which
is reported on the income statement as mortgage banking income is recorded for
fees earned for servicing loans. The fees are based on a contractual percentage
of the outstanding principal; or a fixed amount per loan and are recorded as
income when earned. The amortization of mortgage servicing rights is netted
against loan servicing fee income. Servicing fees totaled $478, $743 and $535
for the years ended December 31, 2007, 2006 and 2005. Late fees and ancillary
fees related to loan servicing are not material.

Premises
and equipment

Land is carried at cost.
Premises and equipment are stated at cost less accumulated depreciation.
Building and related components are depreciated using the straight-line method
with useful lives ranging from 15 to 39 years. Furniture, fixtures, and
equipment are depreciated using the straight-line (or accelerated) method with
useful lives ranging from 3 to 10 years. The cost of maintenance and repairs is
charged to income as incurred; significant improvements are capitalized.

Other
Real Estate Owned

Assets acquired through or
instead of loan foreclosure are initially recorded at fair value less costs to
sell when acquired, establishing a new cost basis. If fair value declines, a
valuation allowance is recorded through expense. Costs after acquisition are
expensed.

Bank-owned
life insurance

The Company has invested in
bank-owned life insurance policies on key executives, for which the Company is
also the beneficiary. Bank-owned life insurance is recorded at its cash
surrender value or the amount that can be realized. These policies have an
approximate cash surrender value of $26,895 and $25,904 at December 31,
2007 and 2006, respectively.

Upon adoption of EITF 06-5,
Bank owned life insurance is recorded at the amount that can be realized under
the insurance contract at the balance sheet date, which is the cash surrender
value adjusted for other charges or other amounts due that are probable at
settlement. Prior to adoption of EITF 06-5, the Company recorded Bank owned
life insurance at its cash surrender value.

63.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and
Summary of Significant Accounting Policies (Continued)

In September 2006, the FASB
Emerging Issues Task Force finalized Issue No. 06-5, Accounting for Purchases of Life
Insurance  Determining the Amount That Could Be Realized in Accordance with
FASB Technical Bulletin No. 85-4 (Accounting for Purchase of Life Insurance).
This Issue requires that a policyholder consider contractual terms of a life
insurance policy in determining the amount that could be realized under the
insurance contract. It also requires that if the contract provides for a
greater surrender value if all individual policies in a group are surrendered
at the same time, that the surrender value be determined based on the assumption
that policies will be surrendered on an individual basis. Lastly, the Issue
requires disclosure when there are contractual restrictions on the Companys
ability to surrender a policy. The adoption of EITF 06-5 on January 1, 2007 had
no impact on the Companys financial condition or results of operation.

Goodwill
and other intangible assets

Goodwill results from
business acquisitions and represents the excess of the purchase price over the
fair value of acquired tangible assets and liabilities and identifiable
intangible assets. Goodwill is assessed at least annually for impairment and
any such impairment will be recognized in the period identified.

Other intangible assets
consist of core deposit and acquired customer relationship intangible assets arising
from whole bank, and branch company acquisitions. They are initially measured
at fair value and then are amortized over their estimated useful lives, which
is ten years.

Long-term
assets

Premises and equipment, core
deposit, and other intangible assets, and other long-term assets are reviewed
for impairment when events indicate their carrying amount may not be
recoverable from future undiscounted cash flows. If impaired, the assets are
recorded at fair value.

Repurchase
agreements

Substantially all repurchase
agreement liabilities represent amounts advanced by various customers.
Securities are pledged to cover these liabilities, which are not covered by
federal deposit insurance.

Income
taxes

Income tax expense is the
total of the current year income tax due or refundable and the change in
deferred taxes and liabilities. Deferred tax assets and liabilities are
recognized for temporary differences between the financial reporting basis and
the tax basis of the Companys assets and liabilities. Deferred taxes are
recognized for the estimated taxes ultimately payable or recoverable based on
enacted tax laws. Changes in enacted tax rates and laws are reflected in the
financial statements in the periods they occur.

The Company adopted FASB
Interpretation 48, Accounting for Uncertainty in Income Taxes
(FIN 48), as of January 1, 2007. A tax position is recognized as a benefit
only if it is more likely than not that the tax position would be sustained
in a tax examination, with a tax examination being presumed to occur. The
amount recognized is the largest amount of tax benefit that is greater than 50%
likely of being realized on examination. For tax positions not meeting the
more likely than not test, no tax benefit is recorded. The adoption had no
effect on the Companys financial statements.

64.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and Summary of Significant
Accounting Policies (Continued)

The Company recognizes
interest related to income tax matters as interest expense and penalties
related to income tax matters as other expense. The Company is no longer
subject to examination by federal taxing authorities for the tax year 2003 and
the years prior.

Earnings
per share

Basic earnings per common
share is net income for common stockholders divided by the weighted-average
common shares outstanding during the period. Diluted earnings per common share
includes the dilutive effect of additional potential common shares issuable
under stock options and Series A convertible preferred shares using the
treasury stock method.

Share
Based Compensation

Effective January 1, 2006,
the Company adopted Statement of Financial Accounting Standards (SFAS) No.
123(R), Share-based
Payment, using the modified prospective transition method.
Accordingly, the Company records share-based employee compensation cost using
the fair value method starting in 2006.

Prior to January 1, 2006,
employee compensation expense under stock options was reported using the
intrinsic value method; therefore, no stock-based compensation cost is
reflected in net income for 2005, as all options granted had an exercise price
equal to or greater than the market price of the underlying common stock at
date of grant.

The following table
illustrates the effect on net income and earnings per share if expense was
measured using the fair value recognition provisions of FASB Statement No. 123,
Accounting
for Stock-Based Compensation,for 2005. The Black-Scholes option
pricing model was used to estimate the grant date fair value of option grants.

|                                                                                    |  |      |       | 
|----------------------------------------------------------------------------------- |  | ---- | ----- | 
|                                                                                    |  | 2005 |      
|                                                                                    |  |      |      
|Net income as reported for common
  stockholders                                    |  | $    | 3,966 | 
|Deduct: Stock-based compensation expense
  determined under fair value based method |  |      | 106   | 
|                                                                                    |  |      |       | 
|                                                                                    |  |      |       | 
|Pro forma net income                                                                |  | $    | 3,860 | 
|                                                                                    |  |      |       | 
|                                                                                    |  |      |       | 
|Basic earnings per share as reported                                                |  | $    | 1.01  | 
|Pro forma basic earnings per share                                                  |  |      | 0.98  | 
|Diluted earnings per share as reported                                              |  |      | 0.99  | 
|Pro forma diluted earnings per share                                                |  |      | 0.96  | 

65.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and Summary of Significant
Accounting Policies (Continued)

Stockholders
Equity:

Preferred stock

The Companys Certificate of
Incorporation authorizes its Board of Directors to fix or alter the rights,
preferences, privileges, and restrictions of 200,000 shares of preferred stock.

The Company has the
following classes of preferred stock issued or authorized:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Series A Convertible Preferred Stock: The Company has authorized 2,765 shares
  of Series A Convertible Preferred Stock. There were 2,762.24 shares of
  Series A Convertible Preferred Stock issued at December 31, 2007 and
  2006. Preferential cumulative cash dividends are payable quarterly at an
  annual rate of $75.00 per share. Dividends accrue on each share of
  Series A Preferred Stock from the date of issuance and from day to day
  thereafter, whether or not earned or declared. The shares of Series A
  Preferred Stock are convertible into 172,042 common shares. Series A
  Preferred Stock is not redeemable for cash. Upon dissolution, winding up, or
  liquidation of the Company, voluntary or otherwise, holders of Series A
  Preferred Stock will be entitled to receive, out of the assets of the Company
  available for distribution to stockholders, the amount of $1,000 per share,
  plus any accrued but unpaid dividends, before any payment or distribution may
  be made on shares of common stock or any other securities issued by the Company
  that rank junior to the Series A Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | Series B Mandatory
  Redeemable Preferred Stock: The Company has authorized 1,092 shares
  of Series B Mandatory Redeemable Preferred Stock. There were 831 shares
  of Series B Mandatory Redeemable Preferred Stock issued at December 31,
  2007 and 2006 which are shown in other liabilities in accordance with FASB
  150. Preferential cumulative cash dividends are payable quarterly at an
  annual rate of $60.00 per share. Dividends accrue on each share of Series B
  Preferred Stock from the date of issuance and from day to day, thereafter,
  whether or not earned or declared. Each original holder of Series B
  Preferred Stock (or upon such holders death, their executor or personal
  representatives) will have the option, exercisable at their sole discretion,
  to sell, and the Company will be obligated to redeem such holders shares of
  Series B Preferred Stock upon the earlier to occur of the death of the
  respective original holder of Series B Preferred Stock or August 6, 2006.
  The per share price payable by the Company for such shares of Series B
  Preferred Stock will be equal to $1,000 per share, plus any accrued but
  unpaid dividends. Upon dissolution, wind up, or liquidation of the Company,
  voluntary or otherwise, holders of Series B Preferred Stock will be
  entitled to receive, out of the assets of the Company available for
  distribution to stockholders, the amount of $1,000 per share, plus any
  accrued but unpaid dividends, before any payment or distribution may be made
  on shares of common stock or any other securities issued by the Company that
  rank junior to the Series B Preferred Stock.

66.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and Summary of Significant
Accounting Policies (Continued)

Dividend
restriction

Banking regulations require
the maintenance of certain capital levels and may limit the amount of dividends
that may be paid by the subsidiary bank to the holding company or by the
holding company to stockholders.

Fair
value of financial instruments

Fair values of financial
instruments are estimated using relevant market information and other
assumptions, as more fully disclosed in a separate note. Fair value estimates
involve uncertainties and matters of significant judgment regarding interest
rates, credit risk, prepayments, and other factors, especially in the absence
of broad markets for particular items. Changes in assumptions or in market
conditions could significantly affect the estimates.

Loss
contingencies

Loss
contingencies, including claims and legal actions arising in the ordinary
course of business, are recorded as liabilities when the likelihood of loss is
probable and an amount or range of loss can be reasonably estimated. Management
does not believe there now are such matters that will have a material effect on
the financial statements.

Comprehensive
income

Comprehensive income
consists of net income and other comprehensive income elements, including the
change in unrealized gains and losses on securities available-for-sale, net of
tax.

Operating
segments

Internal financial
information is primarily reported and aggregated in the following lines of
business: retail, commercial, treasury, wealth management and other.

Reclassifications

Some items in the prior year
financial statements were reclassified to conform to the current presentation.

Adoption
of new accounting standards

In February 2006, the FASB
issued SFAS No. 155, Accounting for Certain Hybrid Financial Instruments
which permits fair value re-measurement for hybrid financial instruments that
contain an embedded derivative that otherwise would require bifurcation.
Additionally, SFAS No. 155 clarifies the accounting guidance for beneficial
interests in securitizations. Under SFAS No. 155, all beneficial interests in
securitizations will require an assessment in accordance with SFAS No. 133 to
determine if an embedded derivative exists within the instrument.

67.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 1. Nature of Operations and Summary of Significant
Accounting Policies (Continued)

In January 2007, the FASB
issued Derivatives Implementation Group Issue B40, Application of Paragraph 13 (b) to
Securitized Interests in Prepayable Financial Assets(DIG Issue
B40). DIG Issue B40 provides an exemption from the embedded derivative test of
paragraph 13 (b) of SFAS No. 133 for instruments that would otherwise require
bifurcation if the test is met solely because of a prepayment feature included
within the securitized interest and prepayment is not controlled by the
security holder. Adoption of SFAS No. 155 and DIG Issue B40 on January 1, 2007
did not have a material impact on the Companys consolidated financial position
or results of operations.

In September 2006, the FASB
issued Statement No. 157, Fair Value Measurements. This Statement
defines fair value, establishes a framework for measuring fair value and
expands disclosures about fair value measurements. This Statement establishes a
fair value hierarchy about the assumptions used to measure fair value and
clarifies assumptions about risk and the effect of a restriction on the sale or
use of an asset. The standard is effective for fiscal years beginning after
November 15, 2007. In February 2008, the FASB issued Staff Position (FSP)
157-2, Effective
Date of FASB Statement No. 157. This FSP delays the effective date
of FAS 157 for all nonfinancial assets and nonfinancial liabilities, except
those that are recognized or disclosed at fair value on a recurring basis (at
least annually) to fiscal years beginning after November 15, 2008, and interim
periods within those fiscal years. The impact of adoption is not anticipated to
be material.

In February, 2007, the FASB
issued SFAS No. 159, The Fair Value Option for Financial Assets and
Financial Liabilities. SFAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair value. The
objective of SFAS 159 is to improve financial reporting by providing entities
with the opportunity to mitigate volatility in reported earnings caused by
measuring related assets and liabilities differently without having to apply
complex hedge accounting principles. The new standard is effective for the
Company on January 1, 2008. The Company did not elect the fair value option for
any financial assets or financial liabilities as of January 1, 2008.

In September 2006, the FASB
Emerging Issues Task Force finalized Issue No. 06-4, Accounting for Deferred Compensation
and Postretirement Benefit Aspects of Endorsement Split-Dollar Life Insurance
Arrangements.This issue requires that a liability be recorded
during the service period when a split-dollar life insurance agreement
continues after participants employment or retirement. The required accrued
liability will be based on either the post-employment benefit cost for the
continuing life insurance or based on the future death benefit depending on
contractual terms of the underlying agreement. This issue is effective for
fiscal years beginning after December 15, 2007. The adoption of this issue on
January 1, 2008 did not have a material impact on the Companys consolidated
financial position or results of operation.

On
November 5, 2007, the SEC issued Staff Accounting Bulletin No. 109, Written
Loan Commitments Recorded at Fair Value through Earnings (SAB 109).
Previously, SAB 105, Application of Accounting Principles to Loan Commitments,
stated that in measuring the fair value of a derivative loan commitment, a
company should not incorporate the expected net future cash flows related to
the associated servicing of the loan. SAB 109 supersedes SAB 105 and indicates
that the expected net future cash flows related to the associated servicing of
the loan should be included in measuring fair value for all written loan
commitments that are accounted for at fair value through earnings. SAB 105 also
indicated that internally-developed intangible assets should not be recorded as
part of the fair value of a derivative loan commitment, and SAB 109 retains
that view. SAB 109 is effective for derivative loan commitments issued or
modified in fiscal quarters beginning after December 15, 2007. The Company does
not expect the impact of this standard to be material.

68.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 2. Business Acquisitions and
Divestitures

Acquisition

On November 13, 2006, the
Company merged with the Centrue Financial Corporation. UnionBancorp, Inc. was
the acquirer and adopted the Centrue Financial Corporation name. See Note 23
for further information.

Divestitures

On
March 31, 2006, the Company completed its sale of the Mendota sales and service
center to First State Bank in Mendota. At the date of the sale, the branch had
approximately $6,066 in deposits.

On September 30, 2006, the
Company completed its sale of its Insurance Product line to the Phoenix Group.
The sale price was $1,100. The Company recorded a net loss of $452. See Note 22
for further information.

On October 24, 2007, the
Company entered into an agreement to sell its Hanover & Elizabeth, Illinois
branches to Apple River State Bank headquartered in Apple River, Illinois. The
Definitive Purchase and Assumption Agreement entered into calls for Apple River
to assume approximately $25,300 in deposits and $12,700 in loans.
Additionally, Apple River is acquiring premises and equipment of $415. The
transaction is expected to be completed late in the first quarter of 2008.
Management does not expect a loss on this transaction.

On December 28, 2007, the
Company entered into an agreement to sell its Manlius & Tampico, Illinois
branches to Peoples National Bank headquartered in Kewanee, Illinois. The
Definitive Purchase and Assumption Agreement entered into calls for Peoples
National to assume approximately $31,300 in deposits and $25,900 in
loans. Additionally, Peoples National Bank is acquiring premises and equipment
of $276. The transaction is expected to be completed late in the second quarter
of 2008. Management does not expect a loss on this transaction.

The proposed sales of these
four branches in 2008 (Hanover, Elizabeth, Manlius and Tampico) is not expected
to have a material impact on the future operations and results of the Company.

Note 3. Securities Available for
Sale

The fair value of securities
and the related gross unrealized gains and losses recognized in accumulated
other comprehensive income were as follows:

|                                                  |  |               |         |                           |   |                               |  |   |      |  
|------------------------------------------------- |  | ------------- | ------- | ------------------------- | - | ----------------------------- |  | - | ---- | -
|                                                  |  | Fair 
  Value |         | Gross 
  Unrealized Gains |   | Gross 
  Unrealized 
  Losses | 
|                                                  |  |               |         |                           |   |                               | 
|                                                  |  |               |         |                           |   |                               | 
|December 31,
  2007                               |  |               |         |                           |   |                               |  |   |      |  
|U.S.
  government agencies                        |  | $             | 103,624 |                           | $ | 1,415                         |  | $ | (14  | )
|States and
  political subdivisions               |  |               | 41,561  |                           |   | 501                           |  |   | (13  | )
|U.S.
  government agency mortgage-back securities |  |               | 47,784  |                           |   | 287                           |  |   | (106 | )
|Collateralized
  mortgage obligations             |  |               | 24,077  |                           |   | 68                            |  |   | (100 | )
|Equity
  securities                               |  |               | 18,874  |                           |   | 105                           |  |   | (609 | )
|Corporate                                         |  |               | 2,741   |                           |   | 9                             |  |   | (10  | )
|                                                  |  |               |         |                           |   |                               |  |   |      |  
|                                                  |  | $             | 238,661 |                           | $ | 2,385                         |  | $ | (852 | )
|                                                  |  |               |         |                           |   |                               |  |   |      |  

69.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 3. Securities Available for
Sale(Continued)

|                                                  |  |               |         |                              |   |                            |  |   |      |  
|------------------------------------------------- |  | ------------- | ------- | ---------------------------- | - | -------------------------- |  | - | ---- | -
|                                                  |  | Fair 
  Value |         | Gross 
  Unrealized 
  Gains |   | Gross 
  Unrealized Losses | 
|                                                  |  |               |         |                              |   |                            | 
|                                                  |  |               |         |                              |   |                            |  |   |      |  
|December 31,
  2006                               |  |               |         |                              |   |                            |  |   |      |  
|U.S.
  government agencies                        |  | $             | 126,039 |                              | $ | 308                        |  | $ | (245 | )
|States and
  political subdivisions               |  |               | 41,471  |                              |   | 329                        |  |   | (9   | )
|U.S.
  government agency mortgage-back securities |  |               | 69,579  |                              |   | 253                        |  |   | (393 | )
|Collateralized
  mortgage obligations             |  |               | 27,237  |                              |   | 44                         |  |   | (77  | )
|Equity
  securities                               |  |               | 17,134  |                              |   | 171                        |  |   |     |  
|Corporate                                         |  |               | 8,764   |                              |   | 16                         |  |   | (13  | )
|                                                  |  |               |         |                              |   |                            |  |   |      |  
|                                                  |  | $             | 290,224 |                              | $ | 1,121                      |  | $ | (737 | )
|                                                  |  |               |         |                              |   |                            |  |   |      |  

Sales of securities
available-for-sale were as follows:

|                  |  |                          |       |      |   |        |   |   |        |  
|----------------- |  | ------------------------ | ----- | ---- | - | ------ | - | - | ------ | -
|                  |  | Years Ended December 31, |      
|                  |  |                          |      
|                  |  | 2007                     |       | 2006 |   | 2005   |  
|                  |  |                          |       |      |   |        |  
|                  |  |                          |       |      |   |        |   |   |        |  
|Proceeds          |  | $                        | 2,548 |      | $ | 19,377 |   | $ | 10,885 |  
|Realized
  gains  |  |                          | 11    |      |   | 19     |   |   | 24     |  
|Realized
  losses |  |                          | (40   | )    |   | (123   | ) |   | (103   | )

The fair values of
securities classified as available-for-sale at December 31, 2007, by
contractual maturity, are shown below. Securities not due at a single maturity
date, including mortgage-backed securities, collateralized mortgage
obligations, and equity securities are shown separately.

Fair Value

|                                                    |  |   |         | 
|--------------------------------------------------- |  | - | ------- | 
|Due in one
  year or less                           |  | $ | 28,953  | 
|Due after
  one year through five years             |  |   | 102,763 | 
|Due after
  five years through ten years            |  |   | 7,320   | 
|Due after
  ten years                               |  |   | 6,149   | 
|U.S.
  government agency mortgage-backed securities |  |   | 47,784  | 
|Collateralized
  mortgage obligations               |  |   | 24,077  | 
|Equity and
  corporate securities                   |  |   | 21,615  | 
|                                                    |  |   |         | 
|                                                    |  | $ | 238,661 | 
|                                                    |  |   |         | 

The Company held callable
securities with carrying value of $129,870 and an amortized cost basis of
$128,803 as of December 31, 2007 and with a carrying value of $133,638 and
an amortized cost basis of $133,188 at December 31, 2006.

Securities with carrying
values of approximately $182,415 and $214,605 at December 31, 2007 and
2006, respectively, were pledged to secure public deposits and securities sold
under agreements to repurchase and for other purposes as required or permitted
by law. At year end 2007 and 2006, there were no holdings of securities of any
one issuer, other than the U.S. Government agencies in an amount greater than
10% of stockholders equity.

70.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 3. Securities Available for Sale (Continued)

Securities with unrealized
losses not recognized in income are as follows presented by length of time
individual securities have been in a continuous unrealized loss position:

|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |   |   |        |  |   |      |  
|--------------------------------------------------- |  | --------------------- | ------ | ------------------- | - | --------------- | - | -------------------- | ------ | --------------- | - | -------------------- | - | - | ------ |  | - | ---- | -
|December 31, 2007                                   |  | Less
  than 12 Months |        | 12
  Months or More |   | Total           |  
|                                                    |  |                       |        |                     |   |                 |  
|Description of Securities                           |  | Fair
  
  Value       |        | Unrealized
  Loss   |   | Fair
  
  Value |   | Unrealized
  
  Loss |        | Fair
  
  Value |   | Unrealized
  
  Loss |  
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |  
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |   |   |        |  |   |      |  
|U.S. government agencies                            |  | $                     |       |                     | $ |                |   | $                    | 8,015  |                 | $ | (14                  | ) | $ | 8,015  |  | $ | (14  | )
|State and political
  subdivisions                  |  |                       | 1,385  |                     |   | (9              | ) |                      | 549    |                 |   | (4                   | ) |   | 1,934  |  |   | (13  | )
|U.S. government agency
  mortgage-backed securities |  |                       | 15,096 |                     |   | (72             | ) |                      | 5,890  |                 |   | (34                  | ) |   | 20,986 |  |   | (106 | )
|Collateralized mortgage
  obligations               |  |                       | 4,657  |                     |   | (100            | ) |                      |       |                 |   |                     |   |   | 4,657  |  |   | (100 | )
|Equities                                            |  |                       | 17,273 |                     |   | (609            | ) |                      |       |                 |   |                     |   |   | 17,273 |  |   | (609 | )
|Corporate                                           |  |                       | 976    |                     |   | (9              | ) |                      | 765    |                 |   | (1                   | ) |   | 1,741  |  |   | (10  | )
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |  
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |   |   |        |  |   |      |  
|Total temporarily impaired                          |  | $                     | 39,387 |                     | $ | (799            | ) | $                    | 15,219 |                 | $ | (53                  | ) | $ | 54,606 |  | $ | (852 | )
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |  

|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |   |   |         |  |   |      |  
|--------------------------------------------------- |  | --------------------- | ------ | ------------------- | - | --------------- | - | -------------------- | ------ | --------------- | - | -------------------- | - | - | ------- |  | - | ---- | -
|December 31, 2006                                   |  | Less
  than 12 Months |        | 12
  Months or More |   | Total           |  
|                                                    |  |                       |        |                     |   |                 |  
|Description of Securities                           |  | Fair
  
  Value       |        | Unrealized
  Loss   |   | Fair
  
  Value |   | Unrealized
  
  Loss |        | Fair
  
  Value |   | Unrealized
  
  Loss |  
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |  
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |   |   |         |  |   |      |  
|U.S. government agencies                            |  | $                     | 41,240 |                     | $ | (37             | ) | $                    | 19,684 |                 | $ | (208                 | ) | $ | 60,924  |  | $ | (245 | )
|State and political
  subdivisions                  |  |                       | 3,444  |                     |   | (2              | ) |                      | 460    |                 |   | (7                   | ) |   | 3,904   |  |   | (9   | )
|U.S. government agency
  mortgage-backed securities |  |                       | 17,009 |                     |   | (88             | ) |                      | 24,018 |                 |   | (305                 | ) |   | 41,027  |  |   | (393 | )
|Collateralized mortgage
  obligations               |  |                       | 3,228  |                     |   | (36             | ) |                      | 8,042  |                 |   | (41                  | ) |   | 11,270  |  |   | (77  | )
|Corporate                                           |  |                       | 1,000  |                     |   |                |   |                      | 1,785  |                 |   | (13                  | ) |   | 2,785   |  |   | (13  | )
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |  
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |   |   |         |  |   |      |  
|Total temporarily impaired                          |  | $                     | 65,921 |                     | $ | (163            | ) | $                    | 53,989 |                 | $ | (574                 | ) | $ | 119,910 |  | $ | (737 | )
|                                                    |  |                       |        |                     |   |                 |   |                      |        |                 |   |                      |  

The equities category above
in an unrealized loss position consists primarily of collaterialized debt
obligations in the form of Trust Preferred Securities at December 31, 2007.

The Company evaluates
securities for other-than-temporary impairment at least on a quarterly basis,
and more frequently when economic and market concerns warrant such evaluation.
Consideration is given to the length of time and the extent to which the fair
value has been less than cost, the financial condition and near-term prospects
of the issuer, and the intent and ability of the Company to retain its
investment in the issuer for a period of time sufficient to allow for any
anticipated recovery in fair value. In analyzing an issuers financial
condition, the Company may consider whether the securities are issued by the
federal government or its agencies, whether downgrades by bond rating agencies
have occurred, and the results of reviews of the issuers financial condition.
The unrealized losses on all securities have not been recognized into income
because the securities are of high credit quality and management has the intent
and ability to hold for the foreseeable future and the decline in fair value is
largely due to increases in market interest rates.

71.

---



|                                            
|--------------------------------------------
|CENTRUE FINANCIAL CORPORATION               
|NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)         
|                                            

Note 4.
Loans

The major classifications of loans follow:

|                                                                                  |  |  |  |  |                |         |      |   |         | 
|--------------------------------------------------------------------------------- |  |  |  |  | -------------- | ------- | ---- | - | ------- | 
|                                                                                  |  |  |  |  | December
  31, |        
|                                                                                  |  |  |  |  |                |        
|                                                                                  |  |  |  |  | 2007           |         | 2006 |  
|                                                                                  |  |  |  |  |                |         |      |  
|                                                                                 
|Commercial                                                                        |  |  |  |  | $              | 191,748 |      | $ | 177,947 | 
|Commercial real estate                                                            |  |  |  |  |                | 509,162 |      |   | 406,403 | 
|Real estate                                                                       |  |  |  |  |                | 206,523 |      |   | 234,772 | 
|Real estate loans held for
  sale related to secondary mortgage market activities |  |  |  |  |                | 1,598   |      |   | 4,850   | 
|Loans held for sale related
  to pending branch sales                             |  |  |  |  |                | 38,600  |      |   |        | 
|Installment                                                                       |  |  |  |  |                | 8,106   |      |   | 11,998  | 
|Other                                                                             |  |  |  |  |                | 1,548   |      |   | 974     | 
|                                                                                  |  |  |  |  |                |         |      |   |         | 
|                                                                                  |  |  |  |  | $              | 957,285 |      | $ | 836,944 | 
|                                                                                  |  |  |  |  |                |         |      |   |         | 

As discussed in Note 2, the Company has entered into
agreements to sell four branches during 2008. A total of $38,600 of loans as
indicated in the above table is anticipated to be included in the sale.

An analysis of activity in the allowance for loan
losses follows:

|                                     |  |                            |        |      |   |        |   |   |        |  
|------------------------------------ |  | -------------------------- | ------ | ---- | - | ------ | - | - | ------ | -
|                                     |  | Years Ended December
  31, |       
|                                     |  |                            |       
|                                     |  | 2007                       |        | 2006 |   | 2005   |  
|                                     |  |                            |        |      |   |        |  
|                                    
|Balance at beginning of year         |  | $                          | 10,835 |      | $ | 8,362  |   | $ | 9,732  |  
|Acquired in
  merger                 |  |                            |       |      |   | 4,767  |   |   |       |  
|Provision
  (credit) for loan losses |  |                            | 675    |      |   | (1,275 | ) |   | 250    |  
|Recoveries                           |  |                            | 812    |      |   | 665    |   |   | 700    |  
|Loans charged
  off                  |  |                            | (1,567 | )    |   | (1,684 | ) |   | (2,320 | )
|                                     |  |                            |        |      |   |        |   |   |        |  
|Balance at end of year               |  | $                          | 10,755 |      | $ | 10,835 |   | $ | 8,362  |  
|                                     |  |                            |        |      |   |        |   |   |        |  

The following table presents data on impaired loans:

|                                                                   |  |              |        |      |   |        |  |   |        | 
|------------------------------------------------------------------ |  | ------------ | ------ | ---- | - | ------ |  | - | ------ | 
|                                                                   |  | December 31, |       
|                                                                   |  |              |       
|                                                                   |  | 2007         |        | 2006 |   | 2005   | 
|                                                                   |  |              |        |      |   |        | 
|                                                                  
|Year-end impaired loans for which an allowance has
  been provided |  | $            | 5,502  |      | $ | 4,915  |  | $ | 12,585 | 
|Year-end impaired loans for which no allowance has
  been provided |  |              | 5,923  |      |   | 16,450 |  |   | 563    | 
|                                                                   |  |              |        |      |   |        |  |   |        | 
|                                                                   |  |              |        |      |   |        |  |   |        | 
|Total impaired loans                                               |  | $            | 11,425 |      | $ | 21,365 |  | $ | 13,148 | 
|                                                                   |  |              |        |      |   |        |  |   |        | 
|                                                                   |  |              |        |      |   |        |  |   |        | 
|Allowance for loan loss allocated to impaired loans                |  | $            | 2,350  |      | $ | 1,562  |  | $ | 3,913  | 
|Average recorded investment in impaired loans                      |  |              | 14,246 |      |   | 14,514 |  |   | 14,839 | 
|Interest income recognized from impaired loans                     |  |              | 1,047  |      |   | 620    |  |   | 1,189  | 
|Cash basis interest income recognized from impaired
  loans        |  |              | 1,052  |      |   | 730    |  |   | 1,034  | 

In November 2006, the Company completed its merger
with the former Centrue Financial Corporation. As part of this merger, the
Companys loan portfolio increased by $436,460 and the allowance for loan
losses increased $4,767. Within the loans acquired were nonaccrual loans of
$10,230. The increase in impaired loans with no allocated allowance in the
prior year is a direct result of the loans acquired in the merger being
recorded upon acquisition at their fair value.

72.

---



|                                            
|--------------------------------------------
|CENTRUE FINANCIAL CORPORATION               
|NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)         
|                                            

Note 4.
Loans (Continued)

Nonperforming loans were as follows:

|                                               |  |  |  |      |                |       |  |   |        | 
|---------------------------------------------- |  |  |  | ---- | -------------- | ----- |  | - | ------ | 
|                                               |  |  |  |      | December
  31, |      
|                                               |  |  |  |      |                |      
|                                               |  |  |  | 2007 |                | 2006  | 
|                                               |  |  |  |      |                |       | 
|                                              
|Loans past due over 90 days
  still on accrual |  |  |  |      | $              |      |  | $ |       | 
|Nonaccrual loans                               |  |  |  |      |                | 4,090 |  |   | 11,759 | 

Nonperforming loans include both smaller balance
homogeneous loans that are collectively evaluated for impairment and
individually classified impaired loans.

Loans made to executive officers, directors, and their
affiliates during 2007 were as follows:

|                                                      |  |  |  |  |  |  |  |   |        |  
|----------------------------------------------------- |  |  |  |  |  |  |  | - | ------ | -
|                                                      |  |  |  |  |  |  |  |   |        |  
|Balance at December 31, 2006                          |  |  |  |  |  |  |  | $ | 7,052  |  
|New loans,
  extensions, and modification             |  |  |  |  |  |  |  |   | 5,940  |  
|Repayments                                            |  |  |  |  |  |  |  |   | (6,611 | )
|Effect of
  changes in composition of related parties |  |  |  |  |  |  |  |   | 9,598  |  
|                                                      |  |  |  |  |  |  |  |   |        |  
|Balance at December 31, 2007                          |  |  |  |  |  |  |  | $ | 15,979 |  
|                                                      |  |  |  |  |  |  |  |   |        |  

Note 5.
Loan Sales and Servicing

Loans held for sale at year end related to our
secondary mortgage market activities are as follows:

|                                                     |  |  |  |  |              |       |      |   |       | 
|---------------------------------------------------- |  |  |  |  | ------------ | ----- | ---- | - | ----- | 
|                                                     |  |  |  |  | December 31, |      
|                                                     |  |  |  |  |              |      
|                                                     |  |  |  |  | 2007         |       | 2006 |  
|                                                     |  |  |  |  |              |       |      |  
|Loans held for sale                                  |  |  |  |  | $            | 1,598 |      | $ | 4,850 | 
|Less: Allowance to adjust to lower of cost or market |  |  |  |  |              |      |      |   |      | 
|                                                     |  |  |  |  |              |       |      |   |       | 
|Loans held for sale, net                             |  |  |  |  | $            | 1,598 |      | $ | 4,850 | 
|                                                     |  |  |  |  |              |       |      |   |       | 

The following summarizes the secondary mortgage market
activities:

|                                      |  |                            |        |      |   |        |  |   |        | 
|------------------------------------- |  | -------------------------- | ------ | ---- | - | ------ |  | - | ------ | 
|                                      |  | Years Ended December
  31, |       
|                                      |  |                            |       
|                                      |  | 2007                       |        | 2006 |   | 2005   | 
|                                      |  |                            |        |      |   |        | 
|Proceeds from sales of mortgage loans |  | $                          | 82,810 |      | $ | 49,039 |  | $ | 51,838 | 
|                                      |  |                            |        |      |   |        |  |   |        | 
|                                      |  |                            |        |      |   |        |  |   |        | 
|Gain on sales of mortgage loans       |  | $                          | 1,262  |      | $ | 762    |  | $ | 1,034  | 
|                                      |  |                            |        |      |   |        |  |   |        | 

73.

---



|                                            
|--------------------------------------------
|CENTRUE FINANCIAL CORPORATION               
|NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)         
|                                            

Note 5.
Loan Sales and Servicing (Continued)

Mortgage loans serviced for others are not included in
the accompanying consolidated balance sheet. The unpaid principal balances of
these loans are summarized as follows:

|                                       |  |  |  |      |              |         |  |   |         | 
|-------------------------------------- |  |  |  | ---- | ------------ | ------- |  | - | ------- | 
|                                       |  |  |  |      | December 31, |        
|                                       |  |  |  |      |              |        
|                                       |  |  |  | 2007 |              | 2006    | 
|                                       |  |  |  |      |              |         | 
|Federal Home Loan Mortgage Corporation |  |  |  |      | $            | 120,359 |  | $ | 137,737 | 
|Federal National Mortgage Association  |  |  |  |      |              | 239,031 |  |   | 258,552 | 
|Small Business Administration          |  |  |  |      |              |        |  |   | 856     | 
|IHDA                                   |  |  |  |      |              | 1,731   |  |   | 1,866   | 
|Other                                  |  |  |  |      |              |        |  |   | 9,653   | 
|                                       |  |  |  |      |              |         |  |   |         | 
|                                       |  |  |  |      | $            | 361,121 |  | $ | 408,664 | 
|                                       |  |  |  |      |              |         |  |   |         | 

Custodial escrow balances maintained in connection
with the foregoing loan servicing were approximately $2,397 and $2,543 at
December 31, 2007 and 2006, respectively.

Following is an analysis of the changes in originated
mortgage servicing rights:

|                                     |  |                            |       |      |   |       |   |   |       |  
|------------------------------------ |  | -------------------------- | ----- | ---- | - | ----- | - | - | ----- | -
|                                     |  | Years Ended December
  31, |      
|                                     |  |                            |      
|                                     |  | 2007                       |       | 2006 |   | 2005  |  
|                                     |  |                            |       |      |   |       |  
|Balance at beginning of year         |  | $                          | 3,510 |      | $ | 2,533 |   | $ | 2,772 |  
|Acquired in merger                   |  |                            |      |      |   | 1,300 |   |   |      |  
|Originated mortgage servicing rights |  |                            | 176   |      |   | 150   |   |   | 296   |  
|Amortization                         |  |                            | (525  | )    |   | (473  | ) |   | (535  | )
|                                     |  |                            |       |      |   |       |   |   |       |  
|Balance at end of year               |  | $                          | 3,161 |      | $ | 3,510 |   | $ | 2,533 |  
|                                     |  |                            |       |      |   |       |   |   |       |  

In November, 2006, the Company merged with the former
Centrue Financial Corporation. As part of this merger, the Company recorded
$1,300 of mortgage servicing rights at the fair market value on the date of the
merger and added $139,167 of loan balances to its servicing portfolio.

Management periodically evaluates assets for
impairment. For purposes of measuring impairment, servicing assets are
stratified by loan type. An impairment is recognized if the carrying value of
servicing assets exceeds the fair value of the stratum. The fair value of
capitalized mortgage servicing rights was $3,400 and $3,700 at December 31,
2007 and 2006, respectively. Fair value was determined using discount rates
ranging from 9.5% to 15.0%, prepayment speeds ranging from 14.8% to 15.9%,
depending on the stratification of the specific right.

Estimated amortization expense for each of the next
five years is as follows:

|     |  |   |     | 
|---- |  | - | --- | 
|2008 |  | $ | 485 | 
|2009 |  |   | 465 | 
|2010 |  |   | 450 | 
|2011 |  |   | 425 | 
|2012 |  |   | 400 | 

74.

---



|                                            
|--------------------------------------------
|CENTRUE FINANCIAL CORPORATION               
|NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)         
|                                            

Note 6.
Premises and Equipment

Premises and equipment consisted of:

|                              |  |              |        |      |   |        | 
|----------------------------- |  | ------------ | ------ | ---- | - | ------ | 
|                              |  | December 31, |       
|                              |  |              |       
|                              |  | 2007         |        | 2006 |  
|                              |  |              |        |      |  
|                             
|Land                          |  | $            | 10,261 |      | $ | 10,258 | 
|Buildings                     |  |              | 24,573 |      |   | 23,349 | 
|Furniture and equipment       |  |              | 24,049 |      |   | 20,480 | 
|Construction in process       |  |              | 114    |      |   | 1,504  | 
|                              |  |              |        |      |   |        | 
|                              |  |              | 58,997 |      |   | 55,591 | 
|Less accumulated depreciation |  |              | 23,382 |      |   | 20,188 | 
|                              |  |              |        |      |   |        | 
|                              |  | $            | 35,615 |      | $ | 35,403 | 
|                              |  |              |        |      |   |        | 

As discussed in Note 2, the
Company has entered into agreements to sell four branches during 2008. A total
of $691 of Premises and Equipment included in the table above is anticipated to
be included in the sales.

Note 7.
Goodwill and Intangible Assets

Goodwill

Goodwill initially recorded is subject to the
completion of the valuation of assets acquired and liabilities assumed.
Purchase accounting adjustments are the adjustments to the initial goodwill
recorded at the time an acquisition is completed. Such adjustments generally
consist of adjustments to the assigned fair value of assets acquired and
liabilities assumed resulting from the completion of appraisals or other
valuations and adjustments to initial estimates recorded for transaction costs
or exit liabilities. Goodwill is not amortized but is subject to impairment
tests on at least an annual basis. The Companys annual goodwill impairment
test determined no impairment existed at that date.

The change in balance of goodwill during the year is
as follows:

|                                                |  |      |        |      |   |        |  
|----------------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|                                                |  | 2007 |        | 2006 |  
|                                                |  |      |        |      |  
|                                                |  |      |       
|Beginning of
  year                             |  | $    | 25,396 |      | $ | 6,963  |  
|Goodwill from
  merger                          |  |      |       |      |   | 19,086 |  
|Goodwill
  allocated to Insurance division sale |  |      |       |      |   | (653   | )
|Merger related
  adjustments                    |  |      | 102    |      |   |       |  
|                                                |  |      |        |      |   |        |  
|                                                |  |      |        |      |   |        |  
|End of year                                     |  | $    | 25,498 |      | $ | 25,396 |  
|                                                |  |      |        |      |   |        |  

Acquired
Intangible Assets

Acquired intangible assets were as follows as of year
end:

|                                        |  |                           |        |                            |   |                           |  |                            |        |  |   |       | 
|--------------------------------------- |  | ------------------------- | ------ | -------------------------- | - | ------------------------- |  | -------------------------- | ------ |  | - | ----- | 
|                                        |  | 2007                      |        | 2006                       |  
|                                        |  |                           |        |                            |  
|                                        |  | Gross
  Carrying
  Amount |        | Accumulated
  Amortization |   | Gross
  Carrying
  Amount |  | Accumulated
  Amortization |       
|                                        |  |                           |        |                            |   |                           |  |                            |       
|                                       
|Amortized intangible
  assets:          |  |                           |        |                            |   |                           |  |                            |        |  |   |       | 
|Core deposit intangibles                |  | $                         | 14,124 |                            | $ | 3,735                     |  | $                          | 14,124 |  | $ | 1,433 | 
|Other customer relationship intangibles |  |                           | 60     |                            |   | 23                        |  |                            | 60     |  |   | 18    | 
|Missouri charter                        |  |                           | 581    |                            |   |                          |  |                            |       |  |   |      | 
|                                        |  |                           |        |                            |   |                           |  |                            |       
|                                        |  |                           |        |                            |   |                           |  |                            |        |  |   |       | 
|Total                                   |  | $                         | 14,765 |                            | $ | 3,758                     |  | $                          | 14,184 |  | $ | 1,451 | 
|                                        |  |                           |        |                            |   |                           |  |                            |       

75.

---



|                                            
|--------------------------------------------
|CENTRUE FINANCIAL CORPORATION               
|NOTES TO CONSOLIDATED FINANCIAL
  STATEMENTS
|(IN
  THOUSANDS, EXCEPT SHARE DATA)         
|                                            

Note 7.
Goodwill and Intangible Assets (Continued)

The core deposit intangible asset recorded in the 2006
merger with Centrue Financial Corporation was $13,035. Aggregate amortization
expense was $ 2,307, $457, and $170 for 2007, 2006, and 2005.

Estimated amortization expense for subsequent years is
as follows:

|           |  |   |       | 
|---------- |  | - | ----- | 
|2008       |  | $ | 1,887 | 
|2009       |  |   | 1,544 | 
|2010       |  |   | 1,263 | 
|2011       |  |   | 1,034 | 
|2012       |  |   | 957   | 
|Thereafter |  |   | 3,737 | 

Note 8.
Deposits

Deposit account balances by type are summarized as
follows:

|                                          |  |              |           |      |   |           | 
|----------------------------------------- |  | ------------ | --------- | ---- | - | --------- | 
|                                          |  | December 31, |          
|                                          |  |              |          
|                                          |  | 2007         |           | 2006 |  
|                                          |  |              |           |      |  
|Non-interest-bearing
  demand deposit     |  | $            | 114,360   |      | $ | 125,585   | 
|Savings, NOW,
  and money market accounts |  |              | 350,023   |      |   | 329,385   | 
|Time deposits of
  $100 or more           |  |              | 201,318   |      |   | 231,401   | 
|Other time
  deposits                     |  |              | 367,321   |      |   | 340,239   | 
|                                          |  |              |           |      |   |           | 
|                                          |  | $            | 1,033,022 |      | $ | 1,026,610 | 
|                                          |  |              |           |      |   |           | 

As discussed in Note 2, the company has entered into
agreements to sell four branches during 2008. A total of $56,600 of deposits
included in the table above is anticipated to be included in the sale.

At December 31, 2007, the scheduled maturities of time
deposits are as follows:

|           |  |        |         | 
|---------- |  | ------ | ------- | 
|Year       |  | Amount |        
|           |  |        |        
|          
|2008       |  | $      | 485,473 | 
|2009       |  |        | 61,063  | 
|2010       |  |        | 15,251  | 
|2011       |  |        | 3,538   | 
|2012       |  |        | 2,399   | 
|Thereafter |  |        | 915     | 
|           |  |        |         | 
|           |  | $      | 568,639 | 
|           |  |        |         | 

Time certificates of deposit in denominations of $100
or more mature as follows:

|                                  |  |              |         |      |   |         | 
|--------------------------------- |  | ------------ | ------- | ---- | - | ------- | 
|                                  |  | December 31, |        
|                                  |  |              |        
|                                  |  | 2007         |         | 2006 |  
|                                  |  |              |         |      |  
|3 months or less                  |  | $            | 90,329  |      | $ | 120,744 | 
|Over 3 months
  through 6 months  |  |              | 33,475  |      |   | 37,826  | 
|Over 6 months
  through 12 months |  |              | 50,022  |      |   | 22,081  | 
|Over 12 months                    |  |              | 27,492  |      |   | 50,750  | 
|                                  |  |              |         |      |   |         | 
|                                  |  | $            | 201,318 |      | $ | 231,401 | 
|                                  |  |              |         |      |   |         | 

Deposits from principal officers, directors and their affiliates at year end 2007 and 2006 were $1,412 and $1,134.

76.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 9. Securities Sold Under Agreements to
Repurchase

Securities
sold under agreements to repurchase are financing arrangements that mature
within two years. At maturity, the securities underlying the agreements are
returned to the Company. Securities sold under agreements to repurchase are
secured by mortgage-backed securities with a carrying value of $44,937 and
$36,319 at year-end 2007 and 2006. Information concerning securities sold under
agreements to repurchase is summarized as follows:

|                                             |  |      |        |      |   |        |  
|-------------------------------------------- |  | ---- | ------ | ---- | - | ------ | -
|                                             |  | 2007 |        | 2006 |  
|                                             |  |      |        |      |  
|                                             |  |      |        |      |   |        |  
|Average
  daily balance during the year      |  | $    | 39,447 |      | $ | 6,679  |  
|Average
  interest rate during the year      |  |      | 4.21   | %    |   | 4.61   | %
|Maximum
  month-end balance during the year  |  |      | 46,958 |      |   | 36,319 |  
|Weighted
  average interest rate at year-end |  |      | 3.52   | %    |   | 4.70   | %

Note 10. Subordinated Debentures

The Company
had two $10,000 trust preferred issuances that were issued in April 2002 and
April 2004 in cumulative trust preferred securities through special-purpose
trusts, Kankakee Capital Trust I (Trust I) and Centrue Statutory Trust II
(Trust II). The proceeds of the offerings were invested by the trusts in junior
subordinated deferrable interest debentures of Trust I and Trust II totaling
$20,620. Trust I and Trust II are wholly-owned subsidiaries of the Company, and
their sole assets are the junior subordinated deferrable interest debentures.
On April 19, 2007, the Company issued another $10,000 trust preferred issuance
in cumulative trust preferred securities and formed a third special-purpose
trust, Centrue Statutory Trust III (Trust III). Trust III is also a
wholly-owned subsidiary of the Company and its sole asset is the junior
subordinated deferrable interest debentures. The proceeds of the Trust III
issuance were used to call the Trust I debenture. As of April 24, 2007 the
$10,000 issuance for Trust I was paid in full and the special-purpose trust for
Trust I was dissolved.

Distributions
are cumulative and are payable quarterly at a variable rate of 2.65% over the
LIBOR rate of 4.70% for Trust II and a 6.67% fixed rate for Trust III,
respectively, (at a rate of 7.35% and 6.67% at December 31, 2007) per annum of
the stated liquidation amount of $1,000 per preferred security. The interest
rate for the Trust III debentures is fixed for five years and then transitions
to a variable rate that is 1.65% over the LIBOR rate. Interest expense on the
trust preferred securities was $1,688 and $242 for the years ended December 31,
2007 and 2006. The interest can be deferred at the option of the Company. The
obligations of the trust are fully and unconditionally guaranteed, on a
subordinated basis, by the Company.

The trust
preferred securities for the Trust II are redeemable upon the maturity of the
debentures on April 22, 2034, or to the extent of any earlier redemption of any
debentures by the Company, and are callable beginning April 22, 2009. The trust
preferred securities for Trust III are redeemable upon the maturity of the
debentures on April 19, 2037, or to the extent of any earlier redemption of any
debentures by the Company, and are callable beginning April 19, 2012. Holders
of the capital securities have no voting rights, are unsecured, and rank junior
in priority of payment to all of the Companys indebtedness and senior to the
Companys capital stock. For regulatory purposes, the trust preferred
securities qualify as Tier 1 capital subject to certain provisions.

In accordance
with FASB interpretation 46R, the trusts are not consolidated with the
Companys consolidated financial statements, but rather the subordinated
debentures are shown as a liability and the Companys investment in the common
stock for the trusts of $620 is included in other assets.

77.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 11. Borrowed
Funds

At December
31, 2007 and 2006, $8,000 and $8,300 of Federal Home Loan Bank advances have
various call provisions. The Company maintains a collateral pledge agreement
covering secured advances whereby the Company had specifically pledged $184,096
of first mortgage loans on improved residential and mixed use farm property
free of all other pledges, liens, and encumbrances (not more than 90 days
delinquent). The Company has no variable rate advances at year-end 2007 and two
advances at year-end 2006 with year-end rates of 5.35% and 5.39%. The remaining
advances are at fixed rates ranging from 2.72% to 4.90%. The scheduled
maturities of advances from the Federal Home Loan Bank at December 31,
2007 and 2006 are as follows:

|           |  |                           |      |        |   |                           |  |        |      |   |   |        | 
|---------- |  | ------------------------- | ---- | ------ | - | ------------------------- |  | ------ | ---- | - | - | ------ | 
|           |  | 2007                      |      | 2006   |  
|           |  |                           |      |        |  
|Year       |  | Average
  Interest
  Rate |      | Amount |   | Average
  Interest
  Rate |  | Amount |     
|           |  |                           |      |        |   |                           |  |        |     
|2007       |  |                           |     | %      | $ |                          |  |        | 4.74 | % | $ | 31,530 | 
|2008       |  |                           | 4.30 |        |   | 103,344                   |  |        | 2.96 |   |   | 13,329 | 
|2009       |  |                           | 3.78 |        |   | 5,002                     |  |        | 3.78 |   |   | 5,023  | 
|2010       |  |                           | 4.50 |        |   | 5,202                     |  |        | 4.50 |   |   | 5,200  | 
|2011       |  |                           | 4.90 |        |   | 3,001                     |  |        | 4.90 |   |   | 3,000  | 
|2012       |  |                           |     |        |   |                          |  |        |     |   |   |       | 
|Thereafter |  |                           | 4.37 |        |   | 5,066                     |  |        | 4.37 |   |   | 5,065  | 
|           |  |                           |      |        |   |                           |  |        |      |   |   |        | 
|           |  |                           | 4.30 | %      | $ | 121,615                   |  |        | 4.25 | % | $ | 63,147 | 
|           |  |                           |      |        |   |                           |  |        |      |   |   |        | 

Notes payable
consisted of the following at December 31, 2007 and 2006:

|                                                                                                                                                                                                                                                                                                                                          |  |      |        |      |   |       | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---- | ------ | ---- | - | ----- | 
|                                                                                                                                                                                                                                                                                                                                          |  | 2007 |        | 2006 |  
|                                                                                                                                                                                                                                                                                                                                          |  |      |        |      |  
|Revolving
  credit loan ($25,000) from LaSalle National Bank; interest due quarterly at
  the higher of (1) 90-day LIBOR plus 1.25% or (2) 4%; balance due on January
  1, 2008; secured by 100% of the stock of Centrue Bank.                                                                                                            |  | $    | 12,864 |      | $ | 7,850 | 
|                                                                                                                                                                                                                                                                                                                                          |  |      |        |      |   |       | 
|A promissory
  note to an individual related to the purchase of the Howard Marshall Agency.
  The original amount of the note was $376. The note was entered into on
  November 1, 2003 and carries an interest rate of 5%. The note requires
  monthly installment payments of principal and interest and matures on
  November 1, 2008. |  |      | 70     |      |   | 149   | 
|                                                                                                                                                                                                                                                                                                                                          |  |      |        |      |   |       | 
|A note to an
  individual related to a prior acquisition. The original amount was $2,000.
  The note was entered into on October 23, 2002 and carries as imputed interest
  of 5.25%. The note matures on October 24, 2012.                                                                                                               |  |      | 868    |      |   | 1,016 | 
|                                                                                                                                                                                                                                                                                                                                          |  |      |        |      |   |       | 
|                                                                                                                                                                                                                                                                                                                                          |  | $    | 13,802 |      | $ | 9,015 | 
|                                                                                                                                                                                                                                                                                                                                          |  |      |        |      |   |       | 

78.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 11. Borrowed
Funds(Continued)

The note payable agreements with LaSalle National Bank contain certain
covenants that limit the amount of dividends paid, the purchase of other banks
and/or businesses, the purchase of investments not in the ordinary course of
business, changes in capital structure, and guarantees of other liabilities and
obligations. In addition, the Company must maintain certain financial ratios.
Management believes the Company was in compliance with all covenants for the
year ended December 31, 2007.

Information
concerning borrowed funds is as follows:

|                                            |  |                            |         |      |   |        |   |   |        |  
|------------------------------------------- |  | -------------------------- | ------- | ---- | - | ------ | - | - | ------ | -
|                                            |  | Years
  Ended December 31, |        
|                                            |  |                            |        
|                                            |  | 2007                       |         | 2006 |   | 2005   |  
|                                            |  |                            |         |      |   |        |  
|Federal Funds Purchased                     |  |                            |         |      |   |        |   |   |        |  
|Year-end balance                            |  | $                          |        |      | $ |       |   | $ |       |  
|Maximum month-end balance
during the year   |  |                            | 15,100  |      |   | 12,000 |   |   | 8,600  |  
|Average balance during the
year             |  |                            | 1,282   |      |   | 1,884  |   |   | 2,340  |  
|Weighted average interest rate
for the year |  |                            | 5.83    | %    |   | 5.25   | % |   | 3.34   | %
|Weighted average interest rate
at year end  |  |                            | N/A     |      |   | N/A    |   |   | N/A    |  
|Advances from the Federal Home Loan Bank    |  |                            |         |      |   |        |   |   |        |  
|Maximum month-end balance
during the year   |  | $                          | 121,615 |      | $ | 63,165 |   | $ | 61,900 |  
|Average balance during the
year             |  |                            | 69,202  |      |   | 46,487 |   |   | 54,472 |  
|Weighted average interest rate
for the year |  |                            | 4.41    | %    |   | 3.92   | % |   | 3.91   | %
|Weighted average interest rate
at year end  |  |                            | 4.30    | %    |   | 4.25   | % |   | 3.93   | %
|Notes Payable                               |  |                            |         |      |   |        |   |   |        |  
|Maximum month-end balance
during the year   |  | $                          | 13,802  |      | $ | 10,846 |   | $ | 10,105 |  
|Average balance during the
year             |  |                            | 11,107  |      |   | 9,081  |   |   | 8,345  |  
|Weighted average interest rate
for the year |  |                            | 6.68    | %    |   | 6.93   | % |   | 5.11   | %
|Weighted average interest rate
at year end  |  |                            | 6.65    | %    |   | 6.36   | % |   | 5.53   | %

Note 12. Income Taxes

Income taxes
consisted of:

|         |  |                          |       |      |   |       |   |   |       |  
|-------- |  | ------------------------ | ----- | ---- | - | ----- | - | - | ----- | -
|         |  | Years Ended December 31, |      
|         |  |                          |      
|         |  | 2007                     |       | 2006 |   | 2005  |  
|         |  |                          |       |      |   |       |  
|Federal  |  |                          |       |      |   |       |   |   |       |  
|Current  |  | $                        | 4,264 |      | $ | (690  | ) | $ | 1,189 |  
|Deferred |  |                          | 225   |      |   | 2,322 |   |   | 28    |  
|         |  |                          |       |      |   |       |   |   |       |  
|         |  |                          | 4,489 |      |   | 1,632 |   |   | 1,217 |  
|State    |  |                          |       |      |   |       |   |   |       |  
|Current  |  |                          | 378   |      |   | 113   |   |   | (20   | )
|Deferred |  |                          | 308   |      |   | 138   |   |   | 2     |  
|         |  |                          |       |      |   |       |   |   |       |  
|         |  |                          | 686   |      |   | 251   |   |   | (18   | )
|         |  |                          |       |      |   |       |   |   |       |  
|         |  | $                        | 5,175 |      | $ | 1,883 |   | $ | 1,199 |  
|         |  |                          |       |      |   |       |   |   |       |  

79.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 12. Income Taxes(Continued)

The Companys
income tax expense differed from the statutory federal rate of 34% as follows:

|                                                                                  |  |                          |       |      |   |       |   |   |       |  
|--------------------------------------------------------------------------------- |  | ------------------------ | ----- | ---- | - | ----- | - | - | ----- | -
|                                                                                  |  | Years Ended December 31, |      
|                                                                                  |  |                          |      
|                                                                                  |  | 2007                     |       | 2006 |   | 2005  |  
|                                                                                  |  |                          |       |      |   |       |  
|Expected income taxes                                                             |  | $                        | 5,609 |      | $ | 2,404 |   | $ | 1,826 |  
|Income tax effect of                                                              |  |                          |       |      |   |       |   |   |       |  
|Interest earned on tax-free
investments and
  loans                               |  |                          | (736  | )    |   | (394  | ) |   | (397  | )
|Nondeductible interest expense
incurred to
  carry tax-free investments and loans |  |                          | 112   |      |   | 50    |   |   | 35    |  
|State income taxes, net of
federal tax
  benefit                                  |  |                          | 453   |      |   | 166   |   |   | 154   |  
|State income tax
refund                                                           |  |                          |      |      |   | (18   | ) |   | (251  | )
|Earnings on Bank owned life
insurance                                             |  |                          | (337  | )    |   | (214  | ) |   | (186  | )
|Deductible merger
expenses                                                        |  |                          |      |      |   | (98   | ) |   |      |  
|Stock option expense                                                              |  |                          | 29    |      |   | 105   |   |   |      |  
|Other                                                                             |  |                          | 45    |      |   | (118  | ) |   | 18    |  
|                                                                                  |  |                          |       |      |   |       |   |   |       |  
|                                                                                  |  | $                        | 5,175 |      | $ | 1,883 |   | $ | 1,199 |  
|                                                                                  |  |                          |       |      |   |       |   |   |       |  

The
significant components of deferred income tax assets and liabilities consisted
of:

|                                                    |  |              |        |      |   |        |  
|--------------------------------------------------- |  | ------------ | ------ | ---- | - | ------ | -
|                                                    |  | December 31, |       
|                                                    |  |              |       
|                                                    |  | 2007         |        | 2006 |  
|                                                    |  |              |        |      |  
|Deferred tax assets                                 |  |              |        |      |  
|Allowance for loan
losses                           |  | $            | 4,175  |      | $ | 4,174  |  
|Deferred compensation,
other                        |  |              | 208    |      |   | 325    |  
|Stock based expense                                 |  |              | 91     |      |   | 88     |  
|Net operating loss
carryforwards                    |  |              | 1,456  |      |   | 2,222  |  
|Deferred tax asset arising from
merger              |  |              | 87     |      |   | 198    |  
|                                                    |  |              |        |      |   |        |  
|Total deferred tax
assets                           |  |              | 6,017  |      |   | 7,007  |  
|Deferred tax
liabilities                            |  |              |        |      |   |        |  
|Depreciation                                        |  | $            | (545   | )    | $ | (781   | )
|Adjustments arising from
acquisitions               |  |              | (1,110 | )    |   | (1,426 | )
|Mortgage servicing
rights                           |  |              | (1,227 | )    |   | (1,363 | )
|Securities
available-for-sale                       |  |              | (594   | )    |   | (149   | )
|Federal Home Loan Bank dividend
received in
  stock |  |              | (787   | )    |   | (791   | )
|Deferred loan fees &
costs                          |  |              | (642   | )    |   | (457   | )
|Other                                               |  |              | (265   | )    |   | (214   | )
|                                                    |  |              |        |      |   |        |  
|Total deferred tax
liabilities                      |  |              | (5,170 | )    |   | (5,181 | )
|                                                    |  |              |        |      |   |        |  
|Valuation allowance on NOL
carryforwards            |  |              | (370   | )    |   | (370   | )
|                                                    |  |              |        |      |   |        |  
|Net deferred tax
liabilities                        |  | $            | 477    |      | $ | 1,456  |  
|                                                    |  |              |        |      |   |        |  

The December
31, 2006 deferred tax asset includes $3,827 of purchase accounting and other
merger related deferred tax assets transferred in as a result of the Companys
merger. The Federal net operating loss is related to an acquisition in 2005.
The NOL expires in 2021 thru 2024. The NOL can be used at a rate of $158,673
per year. Due to Section 382 limitations, any unused amounts that can not be
used will expire. Thus, the valuation allowance was established.

80.

---



|                                          
|------------------------------------------
|Centrue Financial Corporation             
|Notes To Consolidated Financial Statements
|(In Thousands, Except Share Data)         
|                                          

Note 13. Benefit Plans

The Companys
Employee Stock Ownership Plan (the Plan) covered all full-time employees who
had completed six months of service and have attained the minimum age of twenty
and one-half years. As of October 1, 2006, the Company terminated this plan and
began the process of distributing the assets of the plan to participants. All
of the Plan assets had been distributed to the participants as of March 31,
2007. The Plan no longer owns shares of the Companys common stock. The Company
expensed all cash contributions made to the Plan. Contributions were $1, $165
and $223, for the years ended December 31, 2007, 2006 and 2005.

The Company
has a 401(k) salary reduction plan (the 401(k) plan) covering substantially all
employees. Eligible employees may elect to make tax deferred contributions up
to annual IRS contribution limits under the company safe harbor plan status. In
2007, the Company contributed 3% of employee wages to all eligible participants
regardless of whether and to what extent the employee elected a salary
deferral.

Contributions
to the 401(k) plan are expensed currently and approximated $456, $427 and $415
for the years ended December 31, 2007, 2006, and 2005.

Note 14. Share Based Compensation

In 1999, the
Company adopted the 1999 Option Plan. Under the 1999 Option Plan, nonqualified
options may be granted to employees and eligible directors of the Company and
its subsidiaries to common stock at 100% of the fair market value on the date
the option is granted. The Company has authorized 50,000 shares for issuance
under the 1999 Option Plan. During 1999, 40,750 of these shares were granted
and are 100% fully vested. The options
have an exercise period of ten years from the date of grant. There are 9,250 shares available to
grant under this plan.

In April 2003,
the Company adopted the 2003 Option Plan. Under the 2003 Option Plan, as
amended on April 24, 2007, nonqualified options, incentive stock options,
and/or stock appreciation rights may be granted to employees and outside
directors of the Company and its subsidiaries to purchase the Companys common
stock at an exercise price to be determined by the Executive and Compensation
committee. Pursuant to the 2003 Option Plan, 570,000 shares of the Companys
unissued common stock have been reserved and are available for issuance upon
the exercise of options and rights granted under the 2003 Option Plan. The
options have an exercise period of ten years from the date of grant. There are
347,000 shares available to grant under this plan.

In addition to
the Company plans described above, in conjunction with the merger with Centrue
Financial Corporation, all outstanding options at Centrue Financial were
converted into options to acquire Company common stock, as adjusted for the
exchange ratio. Following the merger, no additional options are issuable under
any of the former Centrue plans.

The Companys
compensation committee awarded 5,000 restricted common stock awards available
under the restricted stock portion of the plan. The restricted shares were
issued out of treasury shares with an aggregate grant date fair value of $90.
The awards were granted using the fair value as the last sale price as quoted
on the NASDAQ Stock Market on the date of grant of $18.03. The awarded shares
vest at a rate of 20% of the initially awarded amount per year, beginning on
the first anniversary date of the award, and are contingent upon continuous
service by the recipient through the vesting date.

The compensation cost that has
been charged against income for the stock options portion of the Equity
Incentive Plan was $151 and $353 for 2007 and 2006. The compensation cost that
has been charged against income for the restricted stock portion of the Equity
Incentive Plan was $20 for 2007.

81.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 14. Share Based Compensation (Continued)

The fair value of each
option award is estimated on the date of grant using a closed form option
valuation (Black-Scholes) model that uses the assumptions noted in the table
below. Expected volatilities are based on historical volatilities of the
Companys common stock. The Company uses historical data to estimate option
exercise and post-vesting termination behavior. (Employee and management
options are tracked separately.) The expected term of options granted is based
on historical data and represents the period of time that options granted are
expected to be outstanding, which takes into account that the options are not
transferable. The risk-free interest rate for the expected term of the option
is based on the U.S. Treasury yield curve in effect at the time of the grant.
The fair value of options granted was determined using the following weighted-average
assumptions as of grant date:

|                                |  |      |         |       |   |      |       |   |   |       |  
|------------------------------- |  | ---- | ------- | ----- | - | ---- | ----- | - | - | ----- | -
|                                |  | 2007 |         | 2006  |   | 2005 |      
|                                |  |      |         |       |   |      |      
|                                |  |      |         |       |   |      |       |   |   |      
|Fair value                      |  | $    | 4.41 -  | 4.65  |   | $    | 4.89  |   | $ | 4.94  |  
|Risk-free interest rate         |  |      | 4.06 -  | 4.95  | % |      | 5.14  | % |   | 4.56  | %
|Expected option life (years)    |  |      |         | 6     |   |      | 6     |   |   | 5     |  
|Expected stock price volatility |  |      | 23.33 - | 23.67 | % |      | 23.45 | % |   | 23.45 | %
|Dividend yield                  |  |      | 2.57 -  | 2.64  | % |      | 2.47  | % |   | 1.92  | %

During
2007 options were granted at three separate dates (Jan 31st, Apr 24th,
and Oct 30th). Therefore a range of values have been shown in the
table above.

A
summary of the status of the option plan for 2007 is presented below:

|                                 |  |       |         |                                       |   |                                                     |  |                               |             |  |   |       | 
|-------------------------------- |  | ----- | ------- | ------------------------------------- | - | --------------------------------------------------- |  | ----------------------------- | ----------- |  | - | ----- | 
|                                 |  | Share |         | Weighted
  Average
  Exercise
  Price |   | Weighted
  Average
  Remaining
  Contractual
  Life |  | Aggregate
  Intrinsic
  Value |            
|                                 |  |       |         |                                       |   |                                                     |  |                               |            
|                                 |  |       |         |                                       |   |                                                     |  |                               |            
|Outstanding at beginning of year |  |       | 494,424 |                                       | $ | 18.47                                               |  |                               |             |  |   |       | 
|Granted                          |  |       | 108,000 |                                       |   | 19.52                                               |  |                               |             |  |   |       | 
|Exercised                        |  |       | (25,900 | )                                     |   | 12.75                                               |  |                               |             |  |   |       | 
|Forfeited                        |  |       | (2,500  | )                                     |   | 14.22                                               |  |                               |             |  |   |       | 
|                                 |  |       |         |                                       |   |                                                     |  |                               |             |  |   |       | 
|                                 |  |       |         |                                       |   |                                                     |  |                               |             |  |   |       | 
|Outstanding at end of year       |  |       | 574,024 |                                       | $ | 18.96                                               |  |                               | 5.0
  years |  | $ | 2,065 | 
|                                 |  |       |         |                                       |   |                                                     |  |                               |             |  |   |       | 
|                                 |  |       |         |                                       |   |                                                     |  |                               |             |  |   |       | 
|Vested or expected to vest       |  |       | 118,040 |                                       |   | 18.81                                               |  |                               | 4.6
  years |  | $ | 440   | 
|                                 |  |       |         |                                       |   |                                                     |  |                               |             |  |   |       | 
|Exercisable at year end          |  |       | 450,424 |                                       | $ | 18.81                                               |  |                               | 4.6
  years |  | $ | 1,669 | 
|                                 |  |       |         |                                       |   |                                                     |  |                               |             |  |   |       | 

82.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 14. Share Based Compensation (Continued)

Options outstanding at
year-end 2007 were as follows:

|                             |  |  |             |         |                                                     |  |             |  |                                       |         |  |   |       | 
|---------------------------- |  |  | ----------- | ------- | --------------------------------------------------- |  | ----------- |  | ------------------------------------- | ------- |  | - | ----- | 
|                             |  |  | Outstanding |         | Exercisable                                         | 
|Range
  of
  Exercise Prices |  |  | Number      |         | Weighted
  Average
  Remaining
  Contractual
  Life |  | Number      |  | Weighted
  Average
  Exercise
  Price |        
|                             |  |  |             |         |                                                     |  |             |  |                                       |        
|                             |  |  |             |         |                                                     |  |             |  |                                       |        
|$ 11.25
  - 13.00            |  |  |             | 46,381  |                                                     |  | 2.6
  years |  |                                       | 46,381  |  | $ | 11.60 | 
|13.88
  - 18.50              |  |  |             | 143,443 |                                                     |  | 3.2
  years |  |                                       | 143,443 |  |   | 15.60 | 
|19.03
  - 23.31              |  |  |             | 384,200 |                                                     |  | 5.9
  years |  |                                       | 260,600 |  |   | 21.86 | 
|                             |  |  |             |         |                                                     |  |             |  |                                       |         |  |   |       | 
|                             |  |  |             |         |                                                     |  |             |  |                                       |         |  |   |       | 
|                             |  |  |             | 574,024 |                                                     |  | 5.0
  years |  |                                       | 450,424 |  | $ | 18.81 | 
|                             |  |  |             |         |                                                     |  |             |  |                                       |         |  |   |       | 

Information related to the
stock option plan during each year follows:

|                                                    |  |      |      |      |   |      |  |   |      | 
|--------------------------------------------------- |  | ---- | ---- | ---- | - | ---- |  | - | ---- | 
|                                                    |  | 2007 |      | 2006 |   | 2005 | 
|                                                    |  |      |      |      |   |      | 
|                                                    |  |      |      |      |   |      |  |   |      | 
|Intrinsic
  value of options exercised              |  | $    | 184  |      | $ | 250  |  | $ | 454  | 
|Cash
  received from option exercises               |  |      | 337  |      |   | 281  |  |   | 472  | 
|Tax benefit
  realized from option exercises        |  |      | 49   |      |   | 75   |  |   | 106  | 
|Weighted
  average of fair value of options granted |  |      | 4.53 |      |   | 4.89 |  |   | 4.94 | 

As of December 31, 2007,
there was $491 of total unrecognized compensation cost related to non-vested
stock options granted under the Plan. The cost is expected to be recognized
over a weighted-average period of 4.83 years. As of December 31, 2007, there
was $70 of total unrecognized compensation cost related to non-vested shares
awarded under the restricted stock plan. The cost is expected to be recognized
over a weighted-average period of 4 years.

Note 15. Earnings Per Share

A reconciliation of the
numerators and denominators for earnings per common share computations for the
years ended December 31 is presented below (shares in thousands). The
Convertible Preferred Stock is antidilutive for all years presented and has not
been included in the diluted earnings per share calculation. In addition,
options to purchase 294,200 shares, 244,200 shares and 60,000 shares of common
stock were outstanding for 2007, 2006 and 2005, respectively, but were not
included in the computation of diluted earnings per share because the exercise
price was greater than the average market price and, therefore, were
antidilutive.

83.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 15. Earnings Per Share (Continued)

|                                                                         |  |      |        |      |   |       |   |   |       |  
|------------------------------------------------------------------------ |  | ---- | ------ | ---- | - | ----- | - | - | ----- | -
|                                                                         |  | 2007 |        | 2006 |   | 2005  |  
|                                                                         |  |      |        |      |   |       |  
|Basic earnings per share                                                 |  |      |        |      |   |       |   |   |       |  
|Income from continuing operations available
  to common stockholders     |  | $    | 11,116 |      | $ | 5,395 |   | $ | 4,172 |  
|Net loss from discontinued operations
  available to common stockholders |  |      |       |      |   | (415  | ) |   | (206  | )
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Net income available to common
stockholders                              |  | $    | 11,116 |      | $ | 4,980 |   | $ | 3,966 |  
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Weighted average common shares
outstanding                               |  |      | 6,342  |      |   | 4,119 |   |   | 3,944 |  
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Basic earnings per common share from continuing
operations               |  | $    | 1.75   |      | $ | 1.31  |   | $ | 1.06  |  
|Basic earnings per common share from
discontinued operations             |  |      |       |      |   | (0.10 | ) |   | (0.05 | )
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Basic earnings per common share                                          |  | $    | 1.75   |      | $ | 1.21  |   | $ | 1.01  |  
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Diluted earnings per share                                               |  |      |        |      |   |       |   |   |       |  
|Weighted average common shares
outstanding                               |  |      | 6,342  |      |   | 4,119 |   |   | 3,944 |  
|Add dilutive effect of assumed exercised
  stock options                 |  |      | 38     |      |   | 45    |   |   | 59    |  
|                                                                         |  |      |        |      |   |       |   |   |       |  
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Weighted average common and dilutive
  potential shares outstanding      |  |      | 6,380  |      |   | 4,164 |   |   | 4,003 |  
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Diluted earnings per common share from
continuing operations             |  | $    | 1.74   |      | $ | 1.30  |   | $ | 1.04  |  
|Diluted earnings per common share from
discontinued operations           |  |      |       |      |   | (0.10 | ) |   | (0.05 | )
|                                                                         |  |      |        |      |   |       |   |   |       |  
|Diluted earnings per common share                                        |  | $    | 1.74   |      | $ | 1.20  |   | $ | 0.99  |  

Note 16. Regulatory Matters

The Company and Centrue Bank
are subject to regulatory capital requirements administered by the federal
banking agencies. Under capital adequacy guidelines and the regulatory
framework for prompt corrective action, the Company and Centrue Bank must meet
specific capital guidelines that involve quantitative measures of assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices.

Quantitative
measures established by regulation to ensure capital adequacy require the
Company and Centrue Bank to maintain minimum amounts and ratios of total and
Tier I capital to risk-weighted assets and of Tier I capital to average assets.
Management believes, as of December 31, 2007 and 2006, that the Company and Centrue Bank meet all of the
capital adequacy requirements to which they were subject.

As of December 31, 2007, the
most recent notification from the corresponding regulatory agency categorized
Centrue Bank as well capitalized under the regulatory framework for prompt
corrective action. To be categorized as well capitalized, Centrue Bank must
maintain minimum total risk-based, Tier I risk-based, and Tier I leverage
ratios as set forth in the following table. There are no conditions or events
since that notification that management believes have changed Centrue Banks
categories.

84.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 16. Regulatory Matters(Continued)

|                                          |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|----------------------------------------- |  | ------ | ------- | ------------------------------ | ---- | ---------------------------------------------------------------------- |  | ----- | ------ | ------ | --- | ----- |  |  | ------- |  | ---- |  | 
|                                          |  | Actual |         | To Be Adequately
  Capitalized |      | To Be Well
  Capitalized Under
  Prompt Corrective
  Action Provisions | 
|                                          |  |        |         |                                |      |                                                                        | 
|                                          |  | Amount |         | Ratio                          |      | Amount                                                                 |  | Ratio |        | Amount |     | Ratio | 
|                                          |  |        |         |                                |      |                                                                        |  |       |        |        |     |       | 
|As of December 31, 2007                   |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Total capital (to risk-weighted
assets)   |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Centrue Financial                         |  | $      | 112,586 |                                | 10.2 | %                                                                      |  | $     | 88,208 |        | 8.0 | %     |  |  | N/A     |  | N/A  |  | 
|Centrue Bank                              |  |        | 120,489 |                                | 11.0 |                                                                        |  |       | 87,633 |        | 8.0 |       |  |  | 109,541 |  | 10.0 |  | 
|                                          |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Tier I capital (to risk-weighted
assets)  |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Centrue Financial                         |  |        | 101,831 |                                | 9.2  |                                                                        |  |       | 44,104 |        | 4.0 |       |  |  | N/A     |  | N/A  |  | 
|Centrue Bank                              |  |        | 109,734 |                                | 10.0 |                                                                        |  |       | 43,816 |        | 4.0 |       |  |  | 65,725  |  | 6.0  |  | 
|                                          |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Tier I leverage ratio (to average
assets) |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Centrue Financial                         |  |        | 101,831 |                                | 7.7  |                                                                        |  |       | 52,983 |        | 4.0 |       |  |  | N/A     |  | N/A  |  | 
|Centrue Bank                              |  |        | 109,734 |                                | 8.3  |                                                                        |  |       | 52,983 |        | 4.0 |       |  |  | 66,229  |  | 5.0  |  | 
|                                          |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|As of December 31, 2006                   |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Total capital (to risk-weighted
assets)   |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Centrue Financial                         |  | $      | 110,703 |                                | 11.9 | %                                                                      |  | $     | 74,150 |        | 8.0 | %     |  |  | N/A     |  | N/A  |  | 
|Centrue Bank                              |  |        | 113,579 |                                | 12.4 |                                                                        |  |       | 73,533 |        | 8.0 |       |  |  | 91,933  |  | 10.0 |  | 
|                                          |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Tier I capital (to risk-weighted
assets)  |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Centrue Financial                         |  |        | 99,869  |                                | 10.8 |                                                                        |  |       | 37,075 |        | 4.0 |       |  |  | N/A     |  | N/A  |  | 
|Centrue Bank                              |  |        | 102,745 |                                | 11.2 |                                                                        |  |       | 36,766 |        | 4.0 |       |  |  | 55,160  |  | 6.0  |  | 
|                                          |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Tier I leverage ratio (to average
assets) |  |        |         |                                |      |                                                                        |  |       |        |        |     |       |  |  |         |  |      |  | 
|Centrue Financial                         |  |        | 99,869  |                                | 7.9  |                                                                        |  |       | 49,798 |        | 4.0 |       |  |  | N/A     |  | N/A  |  | 
|Centrue Bank                              |  |        | 102,745 |                                | 8.3  |                                                                        |  |       | 49,424 |        | 4.0 |       |  |  | 61,805  |  | 5.0  |  | 

The
Companys ability to pay dividends is dependent on the subsidiary bank, which
is restricted by various laws and regulations. Under these regulations, the
amount of dividends that may be paid in any calendar year is
limited to the current years net profits, combined with the retained net
profits of the preceding two years subject to the capital requirements
described above. During
2008, the Bank could, without prior approval, declare dividends of
approximately $5,003 plus any 2008 net profits retained to the date of the
dividend declaration.

Note 17. Fair Value of Financial
Instruments

The methods and assumptions
used to estimate fair value are described as follows:

The carrying amount is the estimated fair value for cash and due from banks,
federal funds sold, short-term borrowings, accrued interest receivable and
payable, demand deposits, short-term debt, and variable rate loans or deposits
that reprice frequently and fully. Security fair values are based on market
prices or dealer quotes and, if no such information is available, on the rate
and term of the security and information about the issuer. The carrying value
and fair value of the subordinated debentures issued to capital trusts are estimated to be the same as the debentures all have variable
interest rates. For fixed rate loans or deposits and for variable rate loans or
deposits with infrequent repricing or repricing limits, the fair value is based
on discounted cash flows using current market rates applied to the estimated
life and credit risk. Fair values for impaired loans are estimated using discounted
cash flow analysis or underlying collateral values. The fair value of loans
held for sale is based on market quotes. The fair value of debt and redeemable
stock is based on current rates for similar financing. It was not practicable
to determine the fair value of the restricted securities due to restrictions
placed on its transferability. The fair value of off-balance-sheet items is
based on the current fees or cost that would be charged to enter into or
terminate such arrangements.

85.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 17. Fair Value of Financial
Instruments (Continued)

The estimated fair values of
the Companys financial instruments were as follows:

|                                                                             |  |                   |           |              |   |                   |  |              |           |  |   |           | 
|---------------------------------------------------------------------------- |  | ----------------- | --------- | ------------ | - | ----------------- |  | ------------ | --------- |  | - | --------- | 
|                                                                             |  | December
  31,    |          
|                                                                             |  |                   |          
|                                                                             |  | 2007              |           | 2006         |  
|                                                                             |  |                   |           |              |  
|                                                                             |  | Carrying
  Amount |           | Fair
  Value |   | Carrying
  Amount |  | Fair
  Value |          
|                                                                             |  |                   |           |              |   |                   |  |              |          
|Financial assets                                                             |  |                   |           |              |   |                   |  |              |           |  |   |           | 
|Cash and cash equivalents                                                    |  | $                 | 51,628    |              | $ | 51,628            |  | $            | 40,195    |  | $ | 40,195    | 
|Securities                                                                   |  |                   | 238,661   |              |   | 238,661           |  |              | 290,224   |  |   | 290,224   | 
|Restricted Securities                                                        |  |                   | 10,670    |              |   | N/A               |  |              | 8,468     |  |   | N/A       | 
|Net Loans                                                                    |  |                   | 946,530   |              |   | 952,096           |  |              | 826,109   |  |   | 821,817   | 
|Accrued interest receivable                                                  |  |                   | 7,517     |              |   | 7,517             |  |              | 7,673     |  |   | 7,673     | 
|Financial liabilities                                                        |  |                   |           |              |   |                   |  |              |           |  |   |           | 
|Deposits                                                                     |  |                   | 1,033,022 |              |   | 1,037,151         |  |              | 1,026,610 |  |   | 1,025,838 | 
|Federal funds purchased and securities sold
under agreements to
  repurchase |  |                   | 44,937    |              |   | 44,937            |  |              | 36,319    |  |   | 36,319    | 
|Federal Home Loan Bank Advances                                              |  |                   | 121,615   |              |   | 121,667           |  |              | 63,147    |  |   | 61,998    | 
|Notes payable                                                                |  |                   | 13,802    |              |   | 13,802            |  |              | 9,015     |  |   | 9,015     | 
|Subordinated debentures                                                      |  |                   | 20,620    |              |   | 20,468            |  |              | 20,620    |  |   | 20,620    | 
|Series B mandatory redeemable preferred
stock                                |  |                   | 831       |              |   | 831               |  |              | 831       |  |   | 831       | 
|Accrued interest payable                                                     |  |                   | 6,213     |              |   | 6,213             |  |              | 5,895     |  |   | 5,895     | 

In addition, other assets
and liabilities of the Company that are not defined as financial instruments
are not included in the above disclosures, such as property and equipment.
Also, nonfinancial instruments typically not recognized in financial statements
nevertheless may have value but are not included in the above disclosures.
These include, among other items, the estimated earnings power of core deposit
accounts, the earnings potential of loan servicing rights, the earnings potential
of the trust operations, the trained work force, customer goodwill, and similar
items.

Note 18. Commitments,
Contingencies, and Credit Risk

In the normal course of
business, there are various contingent liabilities outstanding, such as claims
and legal actions, which are not reflected in the consolidated financial
statements. In the opinion of management, no material losses are anticipated as
a result of these actions or claim.

Centrue Bank is party to
financial instruments with off-balance-sheet risk in the normal course of
business to meet the financing needs of its customers. These financial
instruments include commitments to extend credit and standby letters of credit.
These instruments involve, to varying degrees, elements of credit risk in
excess of the amount recognized in the balance sheet.

86.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 18. Commitments,
Contingencies, and Credit Risk (Continued)

The contractual amounts of
these instruments reflect the extent of involvement in particular classes of
financial instruments.

Centrue Banks exposure to
credit loss in the event of nonperformance by the other party to the financial
instrument for commitments to extend credit and standby letters of credit
written is represented by the contractual amount of those instruments. Centrue
Bank uses the same credit policies in making commitments and conditional
obligations as it does for on-balance-sheet instruments. Financial instruments
whose contract amounts represent credit risk are as follows:

|                  |  |                               |        |                               |   |                            |  |                     |        |                                                |   |         |  |  |                 |  
|----------------- |  | ----------------------------- | ------ | ----------------------------- | - | -------------------------- |  | ------------------- | ------ | ---------------------------------------------- | - | ------- |  |  | --------------- | -
|                  |  | Standby
  Letters
  of Credit |        | Variable
  Rate
  Commitments |   | Fixed
  Rate
  Commitments |  | Total
  Commitments |        | Range
  of Rates
  On Fixed Rate
  Commitments |  
|                  |  |                               |        |                               |   |                            |  |                     |        |                                                |  
|Commitments       |  |                               |        |                               |   |                            |  |                     |        |                                                |   |         |  |  |                 |  
|December 31, 2007 |  | $                             | 9,568  |                               | $ | 236,215                    |  | $                   | 26,073 |                                                | $ | 271,856 |  |  | 2.25%
  - 18.00 | %
|December 31, 2006 |  | $                             | 10,937 |                               | $ | 159,944                    |  | $                   | 32,864 |                                                | $ | 203,745 |  |  | 2.25%
  - 18.00 | %

Commitments to extend credit
are agreements to lend to a customer as long as there is no violation of any
condition established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require payment of a fee.
Since many of the commitments are expected to expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. For commitments to extend credit, Centrue Bank evaluates each
customers creditworthiness on a case-by-case basis. The amount of collateral
obtained is based on managements credit evaluation of the customer. Collateral
held varies, but may include accounts receivable; inventory; property, plant,
and equipment; and income producing commercial properties.

Standby letters of credit
are conditional commitments issued by Centrue Bank to guarantee the performance
of a customer to a third party. The credit risk involved in issuing standby
letters of credit is essentially the same as that involved in extending loan
commitments to customers. The standby letters of credit are unsecured.

The Company has employment
agreements with certain executive officers and certain other management
personnel. These agreements generally continue until terminated by the
executive or the Company and provide for continued salary and benefits to the
executive under certain circumstances. The agreements provide the employees
with additional rights if there is a change of control of the Company.

The Company leases certain
branch properties under operating leases. Rent expense was $333, $148, and $190
for 2007, 2006 and 2005. Rent commitments, before considering renewal options
that generally are present, were as follows:

|           |  |   |       | 
|---------- |  | - | ----- | 
|2008       |  | $ | 409   | 
|2009       |  |   | 419   | 
|2010       |  |   | 437   | 
|2011       |  |   | 447   | 
|2012       |  |   | 447   | 
|Thereafter |  |   | 447   | 
|           |  |   |       | 
|Total      |  | $ | 2,606 | 
|           |  |   |       | 

87.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 19. Condensed Financial
Information - Parent Company Only

Condensed financial
information for Centrue Financial Corporation follows:

Balance Sheets (Parent Company Only)

ASSETS

|                                |  |  |  |  |              |         |      |   |         | 
|------------------------------- |  |  |  |  | ------------ | ------- | ---- | - | ------- | 
|                                |  |  |  |  | December 31, |        
|                                |  |  |  |  |              |        
|                                |  |  |  |  | 2007         |         | 2006 |  
|                                |  |  |  |  |              |         |      |  
|                               
|Cash and
  cash equivalents     |  |  |  |  | $            | 1,779   |      | $ | 1,512   | 
|Securities
  available for sale |  |  |  |  |              | 2,711   |      |   | 4,729   | 
|Investment
  in subsidiaries    |  |  |  |  |              | 148,182 |      |   | 141,064 | 
|Other assets                    |  |  |  |  |              | 2,214   |      |   | 2,036   | 
|                                |  |  |  |  |              |         |      |   |         | 
|                                |  |  |  |  |              |         |      |   |         | 
|                                |  |  |  |  | $            | 154,886 |      | $ | 149,341 | 
|                                |  |  |  |  |              |         |      |   |         | 

LIABILITIES
AND STOCKHOLDERS EQUITY

|                                       |  |  |  |  |              |         |      |   |         | 
|-------------------------------------- |  |  |  |  | ------------ | ------- | ---- | - | ------- | 
|                                       |  |  |  |  | December 31, |        
|                                       |  |  |  |  |              |        
|                                       |  |  |  |  | 2007         |         | 2006 |  
|                                       |  |  |  |  |              |         |      |  
|                                      
|LIABILITIES                            |  |  |  |  |              |         |      |  
|Notes payable                          |  |  |  |  | $            | 13,732  |      | $ | 8,866   | 
|Mandatory
  redeemable preferred stock |  |  |  |  |              | 831     |      |   | 831     | 
|Subordinated
  debentures              |  |  |  |  |              | 20,620  |      |   | 20,620  | 
|Other
  liabilities                    |  |  |  |  |              | 826     |      |   | 833     | 
|                                       |  |  |  |  |              |         |      |   |         | 
|                                       |  |  |  |  |              | 36,009  |      |   | 31,150  | 
|                                       |  |  |  |  |              |         |      |   |         | 
|Stockholders
  equity                 |  |  |  |  |              | 118,876 |      |   | 118,191 | 
|                                       |  |  |  |  |              |         |      |   |         | 
|                                       |  |  |  |  |              |         |      |   |         | 
|                                       |  |  |  |  | $            | 154,886 |      | $ | 149,341 | 
|                                       |  |  |  |  |              |         |      |   |         | 

Income Statements
(Parent Company Only)

|                                                                                     |  |                          |        |      |   |       |   |   |       |  
|------------------------------------------------------------------------------------ |  | ------------------------ | ------ | ---- | - | ----- | - | - | ----- | -
|                                                                                     |  | Years Ended December 31, |       
|                                                                                     |  |                          |       
|                                                                                     |  | 2007                     |        | 2006 |   | 2005  |  
|                                                                                     |  |                          |        |      |   |       |  
|Dividends from subsidiaries                                                          |  | $                        | 7,661  |      | $ | 6,813 |   | $ | 5,031 |  
|Interest income                                                                      |  |                          | 334    |      |   | 44    |   |   |      |  
|Other income                                                                         |  |                          | (122   | )    |   | 8     |   |   | 6     |  
|Interest expense                                                                     |  |                          | 2,454  |      |   | 910   |   |   | 459   |  
|Other expense                                                                        |  |                          | 912    |      |   | 1,066 |   |   | 488   |  
|Income tax benefit                                                                   |  |                          | (1,189 | )    |   | (900  | ) |   | (436  | )
|Equity in undistributed earnings of
  subsidiaries (dividends in excess of earnings) |  |                          | 5,627  |      |   | (602  | ) |   | (353  | )
|                                                                                     |  |                          |        |      |   |       |   |   |       |  
|                                                                                     |  |                          |        |      |   |       |   |   |       |  
|Net income                                                                           |  |                          | 11,323 |      |   | 5,187 |   |   | 4,173 |  
|Less dividends on preferred stock                                                    |  |                          | 207    |      |   | 207   |   |   | 207   |  
|                                                                                     |  |                          |        |      |   |       |   |   |       |  
|                                                                                     |  |                          |        |      |   |       |   |   |       |  
|Net income on common stock                                                           |  | $                        | 11,116 |      | $ | 4,980 |   | $ | 3,966 |  
|                                                                                     |  |                          |        |      |   |       |   |   |       |  

88.

---



|                                          
|------------------------------------------
|CENTRUE FINANCIAL CORPORATION             
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
|(IN THOUSANDS, EXCEPT SHARE DATA)         
|                                          

Note 19. Condensed Financial
Information - Parent Company Only(Continued)

Statements of Cash Flows (Parent Company
Only)

|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|---------------------------------------------------------------------------------- |  | ------------------------ | ------ | ---- | - | ------ | - | - | ------ | -
|                                                                                   |  | Years Ended December 31, |       
|                                                                                   |  |                          |       
|                                                                                   |  | 2007                     |        | 2006 |   | 2005   |  
|                                                                                   |  |                          |        |      |   |        |  
|Cash flows from operating activities                                               |  |                          |        |      |   |        |   |   |        |  
|Net income                                                                         |  | $                        | 11,323 |      | $ | 5,187  |   | $ | 4,173  |  
|Adjustments to reconcile net income to net
  cash provided by operating activities |  |                          |        |      |   |        |   |   |        |  
|Depreciation                                                                       |  |                          |       |      |   |       |   |   |       |  
|Undistributed earnings of subsidiaries                                             |  |                          | (5,627 | )    |   | 602    |   |   | 353    |  
|Amortization of deferred compensation-stock
  options                              |  |                          | (20    | )    |   |       |   |   |       |  
|Decrease (increase) in other assets                                                |  |                          | 159    |      |   | (309   | ) |   | (2     | )
|Increase (decrease) in other liabilities                                           |  |                          | 32     |      |   | 692    |   |   | (708   | )
|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|Net cash provided by operating activities                                          |  |                          | 5,867  |      |   | 6,172  |   |   | 3,816  |  
|Cash flows from investing activities                                               |  |                          |        |      |   |        |   |   |        |  
|Purchases of premises and equipment                                                |  |                          |       |      |   |       |   |   |       |  
|Sales and maturities                                                               |  |                          | 1,018  |      |   |       |   |   |       |  
|Investment in subsidiaries                                                         |  |                          |       |      |   |       |   |   |       |  
|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|Net cash provided by financing activities                                          |  |                          | 1,018  |      |   |       |   |   |       |  
|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|Cash flows from financing activities                                               |  |                          |        |      |   |        |   |   |        |  
|Net increase (decrease) in notes payable                                           |  | $                        | 4,866  |      | $ | (1,550 | ) | $ | 2,925  |  
|Dividend paid on common stock                                                      |  |                          | (3,241 | )    |   | (1,347 | ) |   | (1,721 | )
|Dividend paid on preferred stock                                                   |  |                          | (207   | )    |   | (207   | ) |   | (207   | )
|Proceeds from exercise of stock options                                            |  |                          | 386    |      |   | 357    |   |   | 579    |  
|Stock option expense                                                               |  |                          | (61    | )    |   | (352   | ) |   |       |  
|Purchase of treasury stock                                                         |  |                          | (8,361 | )    |   | (1,677 | ) |   | (5,739 | )
|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|Net cash used in financing activities                                              |  |                          | (6,618 | )    |   | (4,776 | ) |   | (4,163 | )
|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|Net increase (decrease) in cash and cash equivalents                               |  |                          | 267    |      |   | 1,396  |   |   | (347   | )
|Cash and cash equivalents                                                          |  |                          |        |      |   |        |   |   |        |  
|Beginning of year                                                                  |  |                          | 1,512  |      |   | 116    |   |   | 463    |  
|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|                                                                                   |  |                          |        |      |   |        |   |   |        |  
|End of year                                                                        |  | $                        | 1,779  |      | $ | 1,512  |   | $ | 116    |  
|                                                                                   |  |                          |        |      |   |        |   |   |        |  

Note 20. Other Comprehensive Income

Changes in other
comprehensive income components and related taxes are as follows:

|                                                                      |  |                          |       |      |   |      |  |   |        |  
|--------------------------------------------------------------------- |  | ------------------------ | ----- | ---- | - | ---- |  | - | ------ | -
|                                                                      |  | Years Ended December 31, |      
|                                                                      |  |                          |      
|                                                                      |  | 2007                     |       | 2006 |   | 2005 | 
|                                                                      |  |                          |       |      |   |      | 
|Change in
  unrealized gains on securities available-for-sale         |  | $                        | 1,120 |      | $ | 125  |  | $ | (2,050 | )
|Reclassification
  adjustment for losses (gains) recognized in income |  |                          | 29    |      |   | 104  |  |   | 79     |  
|                                                                      |  |                          |       |      |   |      |  |   |        |  
|Net unrealized gains                                                  |  |                          | 1,149 |      |   | 229  |  |   | (1,971 | )
|Tax expense                                                           |  |                          | 445   |      |   | 89   |  |   | (715   | )
|                                                                      |  |                          |       |      |   |      |  |   |        |  
|Other
  comprehensive income                                          |  | $                        | 704   |      | $ | 140  |  | $ | (1,256 | )
|                                                                      |  |                          |       |      |   |      |  |   |        |  

89.

---



|                                            
|--------------------------------------------
|Centrue Financial Corporation               
|Notes To Consolidated Financial
  Statements
|(In
  Thousands, Except Share Data)         
|                                            
|                                            
|Note 21. Segment Information                

The Companys utilizes a
line of business (LOB) reporting structure which was implemented as of January
1, 2005. The reportable segments were determined by the products and services
offered, primarily distinguished between retail, commercial, treasury, wealth
management, and other operations. Loans and deposits generate the revenues in
the commercial segments; deposits, loans, secondary mortgage sales and
servicing generates the revenue in the retail segment; investment income
generates the revenue in the treasury segment; brokerage and trust services
generate the revenue in the wealth management segment; and holding company
services and discontinued operations associated with the sale of the insurance
segment generate the revenue in the operations & other segment. The net
allocations line represents the allocation of the costs that are overhead
being spread to the specific segments. With the sale of the Insurance unit, the
results for Insurance were reclassified into the Operations & Other segment
from the Wealth Management segment.

With the consolidation of
the reporting systems during 2007, the 2006 data was able to be reported on a
comparable basis to the data presented for 2007. Thus, 2006 data has been
reported on a consistent basis with the results for 2007.

The accounting policies used
with respect to segment reporting are the same as those described in the
summary of significant accounting policies set forth in Note 1. Segment
performance is evaluated using net income.

Information reported
internally for performance assessment follows:

|                           |  |                  |         |                      |   |                    |  |                     |         |                    |   |                         |  |   |         |   |   |           | 
|-------------------------- |  | ---------------- | ------- | -------------------- | - | ------------------ |  | ------------------- | ------- | ------------------ | - | ----------------------- |  | - | ------- | - | - | --------- | 
|                           |  | Retail
  Segment |         | Commercial
  Segment |   | Treasury
  Segment |  | Wealth
  Management |         | Other
  Operations |   | Continuing
  Operations | 
|                           |  |                  |         |                      |   |                    |  |                     |         |                    |   |                         | 
|2007                       |  |                  |         |                      |   |                    |  |                     |         |                    |   |                         |  |   |         |   |   |           | 
|Net interest income (loss) |  | $                | 12,971  |                      | $ | 26,826             |  | $                   | 1,446   |                    | $ | 72                      |  | $ | (2,474  | ) | $ | 38,841    | 
|Other revenue              |  |                  | 8,938   |                      |   | 1,832              |  |                     | (22     | )                  |   | 1,892                   |  |   | 3,025   |   |   | 15,665    | 
|Other expense              |  |                  | 11,429  |                      |   | 3,214              |  |                     | 218     |                    |   | 1,654                   |  |   | 15,321  |   |   | 31,836    | 
|Noncash items              |  |                  |         |                      |   |                    |  |                     |         |                    |   |                         |  |   |         |   |   |           | 
|Depreciation               |  |                  | 1,769   |                      |   | 16                 |  |                     |        |                    |   | 16                      |  |   | 1,389   |   |   | 3,190     | 
|Provision for loan losses  |  |                  | 43      |                      |   | 632                |  |                     |        |                    |   |                        |  |   |        |   |   | 675       | 
|Other intangibles          |  |                  | 2,303   |                      |   |                   |  |                     |        |                    |   | 4                       |  |   |        |   |   | 2,307     | 
|Net allocations            |  |                  | 3,882   |                      |   | 9,407              |  |                     | 3,405   |                    |   | 16                      |  |   | (16,710 | ) |   |          | 
|Income tax expense         |  |                  | 820     |                      |   | 5,078              |  |                     | (726    | )                  |   | 90                      |  |   | (87     | ) |   | 5,175     | 
|Segment profit (loss)      |  |                  | 1,663   |                      |   | 10,311             |  |                     | (1,473  | )                  |   | 184                     |  |   | 638     |   |   | 11,323    | 
|Goodwill                   |  |                  | 11,910  |                      |   | 12,421             |  |                     |        |                    |   | 1,167                   |  |   |        |   |   | 25,498    | 
|Segment assets             |  |                  | 306,156 |                      |   | 741,861            |  |                     | 268,484 |                    |   | 1,289                   |  |   | 47,209  |   |   | 1,364,999 | 

90.

---



|                                            
|--------------------------------------------
|Centrue Financial Corporation               
|Notes To Consolidated Financial
  Statements
|(In
  Thousands, Except Share Data)         
|                                            
|                                            
|Note 21. Segment Information(Continued)     

|                           |  |                  |         |                      |   |                    |   |                     |         |                    |   |                         |   |   |         |   |   |           |  
|-------------------------- |  | ---------------- | ------- | -------------------- | - | ------------------ | - | ------------------- | ------- | ------------------ | - | ----------------------- | - | - | ------- | - | - | --------- | -
|                           |  | Retail
  Segment |         | Commercial
  Segment |   | Treasury
  Segment |   | Wealth
  Management |         | Other
  Operations |   | Continuing
  Operations |  
|                           |  |                  |         |                      |   |                    |   |                     |         |                    |   |                         |  
|2006                       |  |                  |         |                      |   |                    |   |                     |         |                    |   |                         |   |   |         |   |   |           |  
|Net interest income (loss) |  | $                | 8,464   |                      | $ | 14,476             |   | $                   | 537     |                    | $ | 260                     |   | $ | (1,230  | ) | $ | 22,507    |  
|Other revenue              |  |                  | 3,999   |                      |   | 571                |   |                     | (105    | )                  |   | 1,295                   |   |   | 928     |   |   | 6,688     |  
|Other expense              |  |                  | 6,349   |                      |   | 2,550              |   |                     | 267     |                    |   | 1,483                   |   |   | 9,118   |   |   | 19,767    |  
|Noncash items              |  |                  |         |                      |   |                    |   |                     |         |                    |   |                         |   |   |         |   |   |           |  
|Depreciation               |  |                  | 1,049   |                      |   | 12                 |   |                     |        |                    |   | 8                       |   |   | 1,476   |   |   | 2,545     |  
|Provision for loan losses  |  |                  | 325     |                      |   | (1,600             | ) |                     |        |                    |   |                        |   |   |        |   |   | (1,275    | )
|Other intangibles          |  |                  | 343     |                      |   |                   |   |                     |        |                    |   | 1                       |   |   | 67      |   |   | 411       |  
|Net allocations            |  |                  | 3,231   |                      |   | 5,221              |   |                     | 812     |                    |   | 880                     |   |   | (10,144 | ) |   |          |  
|Income tax expense         |  |                  | 380     |                      |   | 2,440              |   |                     | (578    | )                  |   | (240                    | ) |   | 143     |   |   | 2,145     |  
|Segment profit (loss)      |  |                  | 786     |                      |   | 6,424              |   |                     | (69     | )                  |   | (577                    | ) |   | (962    | ) |   | 5,602     |  
|Goodwill                   |  |                  | 11,834  |                      |   | 12,395             |   |                     |        |                    |   | 1,167                   |   |   |        |   |   | 25,396    |  
|Segment assets             |  |                  | 240,872 |                      |   | 686,495            |   |                     | 328,481 |                    |   | 1,330                   |   |   | 25,847  |   |   | 1,283,025 |  

|                           |  |                  |        |                      |   |                    |   |                     |         |                    |   |                         |   |   |        |   |   |         | 
|-------------------------- |  | ---------------- | ------ | -------------------- | - | ------------------ | - | ------------------- | ------- | ------------------ | - | ----------------------- | - | - | ------ | - | - | ------- | 
|                           |  | Retail
  Segment |        | Commercial
  Segment |   | Treasury
  Segment |   | Wealth
  Management |         | Other
  Operations |   | Continuing
  Operations |  
|                           |  |                  |        |                      |   |                    |   |                     |         |                    |   |                         |  
|2005                       |  |                  |        |                      |   |                    |   |                     |         |                    |   |                         |   |   |        |   |   |         | 
|Net interest income (loss) |  | $                | 7,527  |                      | $ | 13,191             |   | $                   | 302     |                    | $ | 102                     |   | $ | (129   | ) | $ | 20,993  | 
|Other revenue              |  |                  | 3,948  |                      |   | 411                |   |                     | (79     | )                  |   | 1,321                   |   |   | 697    |   |   | 6,298   | 
|Other expense              |  |                  | 6,913  |                      |   | 3,382              |   |                     | 230     |                    |   | 1,391                   |   |   | 7,099  |   |   | 19,015  | 
|Noncash items              |  |                  |        |                      |   |                    |   |                     |         |                    |   |                         |   |   |        |   |   |         | 
|Depreciation               |  |                  | 1,060  |                      |   | 13                 |   |                     |        |                    |   | 82                      |   |   | 1,053  |   |   | 2,208   | 
|Provision for loan losses  |  |                  | 420    |                      |   | (170               | ) |                     |        |                    |   |                        |   |   |       |   |   | 250     | 
|Other intangibles          |  |                  |       |                      |   |                   |   |                     |        |                    |   | 6                       |   |   | 114    |   |   | 120     | 
|Net allocations            |  |                  | 2,886  |                      |   | 4,603              |   |                     | 523     |                    |   | 844                     |   |   | (8,856 | ) |   |        | 
|Income tax expense         |  |                  | 67     |                      |   | 1,573              |   |                     | (431    | )                  |   | (231                    | ) |   | 341    |   |   | 1,319   | 
|Segment profit (loss)      |  |                  | 129    |                      |   | 4,201              |   |                     | (99     | )                  |   | (669                    | ) |   | 817    |   |   | 4,379   | 
|Goodwill                   |  |                  | 2,512  |                      |   | 2,631              |   |                     |        |                    |   | 1,820                   |   |   |       |   |   | 6,963   | 
|Segment assets             |  |                  | 99,916 |                      |   | 330,240            |   |                     | 216,355 |                    |   | 3,723                   |   |   | 25,988 |   |   | 676,222 | 

Note 22. Discontinued Operations

On
September 30, 2006, the Company sold its Insurance business unit of its Wealth
Management segment to the Phoenix Group for $1,200. In accordance with FASB
Statement No. 144, Accounting for Impairment or Disposal of Long-Lived Assets
(FAS 144) the results of operations of the insurance division are reflected
in the Companys statements of income for 2006 and 2005 as discontinued
operations. The loss on sale of the insurance unit of $452 and related tax benefit
of $175 are included in discontinued operations as of December 31, 2006.
Additionally, approximately $1,030 of goodwill and intangibles attributed to
the Insurance unit on the Companys balance sheet were written off as a result
of this transaction and factored into the loss on the sale of the discontinued
operations.

91.

---



|                                             
|---------------------------------------------
|Centrue Financial Corporation                
|Notes To Consolidated Financial
  Statements 
|(In
  Thousands, Except Share Data)          
|                                             
|                                             
|Note 22.
  Discontinued Operations(Continued)

|                                                        |  |              |       |      |   |       |  
|------------------------------------------------------- |  | ------------ | ----- | ---- | - | ----- | -
|                                                        |  | December 31, |      
|                                                        |  |              |      
|                                                        |  | 2006         |       | 2005 |  
|                                                        |  |              |       |      |  
|                                                        |  |              |       |      |   |       |  
|Net interest income                                     |  | $            | (5    | )    | $ | (8    | )
|                                                        |  |              |       |      |   |       |  
|Noninterest income                                      |  |              | 976   |      |   | 1,305 |  
|Noninterest expense                                     |  |              | 1,196 |      |   | 1,623 |  
|                                                        |  |              |       |      |   |       |  
|Loss from discontinued operations before income
  taxes |  |              | (225  | )    |   | (326  | )
|Loss on disposal                                        |  |              | (452  | )    |   |      |  
|Benefit for taxes                                       |  |              | (262  | )    |   | (120  | )
|                                                        |  |              |       |      |   |       |  
|                                                        |  |              |       |      |   |       |  
|Net income (loss) from discontinued operations          |  | $            | (415  | )    | $ | (206  | )
|                                                        |  |              |       |      |   |       |  

Note 23. Business Combination

On
November 13, 2006, the Company (formerly known as UnionBancorp, Inc. now known
as Centrue Financial Corporation) merged with Centrue Financial Corporation
(former Centrue), parent of Centrue Bank with the Company being the surviving
entity in the merger. Operating results of former Centrue are included in the
consolidated financial statements since the date of the acquisition. As a
result of this merger, the Company increased its market share in the northern
and central Illinois markets, expanded its customer base to enhance deposit fee
income, marketed additional products and services to new customers and reduced
operating costs through economies of scale.

The
aggregate purchase price was $49,316, $4 in cash and $49,312 in common stock.
The value of the 2,701 common shares issued was determined using the market
price multiplied by the exchange rate of 1.2. The purchase price resulted in
approximately $19,086 of goodwill, and $13,035 in core deposit and customer
relationship intangible. The intangible asset(s) will be amortized over 10
years, using an accelerated method. Goodwill will not be amortized but instead
it will be evaluated periodically each year for impairment.

The
following table summarizes the estimated fair value of assets acquired and
liabilities assumed at the date of acquisition:

|                                   |  |   |          |  
|---------------------------------- |  | - | -------- | -
|Cash and cash equivalents          |  | $ | 26,506   |  
|Securities available-for-sale      |  |   | 125,756  |  
|Loans                              |  |   | 431,692  |  
|Goodwill                           |  |   | 19,086   |  
|Premises and equipment, net        |  |   | 20,701   |  
|Core deposit and other intangibles |  |   | 13,035   |  
|Other assets                       |  |   | 14,795   |  
|                                   |  |   |          |  
|Total assets acquired              |  |   | 651,571  |  
|Deposits                           |  |   | (523,630 | )
|Other liabilities                  |  |   | (78,625  | )
|                                   |  |   |          |  
|Total liabilities assumed          |  |   | (602,255 | )
|                                   |  |   |          |  
|Net assets acquired                |  | $ | 49,316   |  
|                                   |  |   |          |  

92.

---



|                                            
|--------------------------------------------
|Centrue Financial Corporation               
|Notes To Consolidated Financial
  Statements
|(In
  Thousands, Except Share Data)         
|                                            
|                                            
|Note 23.
  Business Combination(Continued)  

The
following table presents pro forma information as if the acquisition had
occurred at the beginning of 2006 and 2005. The pro forma information includes
adjustments for interest income on loans and securities acquired, amortization
of intangibles arising from the transaction, depreciation expense on property
acquired, interest expense on deposits acquired, and the related tax effects.
The pro forma financial information is not necessarily indicative of the
results of operations as they would have been had the transaction been effected
on the assumed dates.

(Unaudited)December 31,2006

2005Net interest income

$
39,127

$
39,117Net income

$
4,228

$
8,553Basic earnings per share

$
0.98

$
2.03Diluted earnings per share

$
0.97

$
2.00


Note 24. Quarterly Results of Operations (Unaudited)

|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|--------------------------------------------------------- |  | --------------------------------------------------- | ------ | --------------------------------------------------- | - | ------- | - | -------- | ------ | ------- | - | ------- | - | ------- | ------ | -------- | - | ----- | - | - | ----- | - | - | ----- | -
|                                                          |  | Year Ended December 31,
  2007
  Three Months Ended |        | Year Ended December 31,
  2006
  Three Months Ended |  
|                                                          |  |                                                     |        |                                                     |  
|                                                          |  | Dec. 31                                             |        | Sep. 30                                             |   | June 30 |   | March 31 |        | Dec. 31 |   | Sep. 30 |   | June 30 |        | March 31 |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Total interest
  income                                   |  | $                                                   | 21,549 |                                                     | $ | 21,561  |   | $        | 20,653 |         | $ | 19,813  |   | $       | 15,197 |          | $ | 9,802 |   | $ | 9,476 |   | $ | 9,383 |  
|Total interest
  expense                                  |  |                                                     | 11,606 |                                                     |   | 11,477  |   |          | 11,162 |         |   | 10,490  |   |         | 7,902  |          |   | 4,728 |   |   | 4,523 |   |   | 4,198 |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Net interest
  income                                     |  |                                                     | 9,943  |                                                     |   | 10,084  |   |          | 9,491  |         |   | 9,323   |   |         | 7,295  |          |   | 5,074 |   |   | 4,953 |   |   | 5,185 |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Provision for
  loan losses                               |  |                                                     | 449    |                                                     |   |        |   |          | 226    |         |   |        |   |         | 25     |          |   | (200  | ) |   | (300  | ) |   | (800  | )
|Noninterest
  income                                      |  |                                                     | 3,850  |                                                     |   | 4,367   |   |          | 4,194  |         |   | 3,254   |   |         | 2,363  |          |   | 1,481 |   |   | 1,380 |   |   | 1,464 |  
|Noninterest
  expense                                     |  |                                                     | 8,908  |                                                     |   | 8,631   |   |          | 9,846  |         |   | 9,948   |   |         | 8,372  |          |   | 4,591 |   |   | 4,767 |   |   | 4,993 |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Income (loss)
  before income taxes                       |  |                                                     | 4,436  |                                                     |   | 5,820   |   |          | 3,613  |         |   | 2,629   |   |         | 1,261  |          |   | 2,164 |   |   | 1,866 |   |   | 2,456 |  
|Income tax
  expense (benefit)                            |  |                                                     | 1,356  |                                                     |   | 1,982   |   |          | 1,107  |         |   | 730     |   |         | 162    |          |   | 658   |   |   | 543   |   |   | 782   |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Income from
  continuing operations                       |  |                                                     | 3,080  |                                                     |   | 3,838   |   |          | 2,506  |         |   | 1,899   |   |         | 1,099  |          |   | 1,506 |   |   | 1,323 |   |   | 1,674 |  
|Loss on
  discontinued operations                         |  |                                                     |       |                                                     |   |        |   |          |       |         |   |        |   |         | (88    | )        |   | (270  | ) |   | (29   | ) |   | (28   | )
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Net income                                                |  |                                                     | 3,080  |                                                     |   | 3,838   |   |          | 2,506  |         |   | 1,899   |   |         | 1,011  |          |   | 1,236 |   |   | 1,294 |   |   | 1,646 |  
|Preferred stock
  dividend                                |  |                                                     | 51     |                                                     |   | 52      |   |          | 52     |         |   | 52      |   |         | 51     |          |   | 52    |   |   | 52    |   |   | 52    |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Net income (loss)
  for common stockholders               |  | $                                                   | 3,029  |                                                     | $ | 3,786   |   | $        | 2,454  |         | $ | 1,847   |   | $       | 960    |          | $ | 1,184 |   | $ | 1,242 |   | $ | 1,594 |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Basic earnings
  per share from continuing operations     |  | $                                                   | 0.49   |                                                     | $ | 0.60    |   | $        | 0.38   |         | $ | 0.29    |   | $       | 0.20   |          | $ | 0.39  |   | $ | 0.32  |   | $ | 0.40  |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Diluted earnings
  per share from continuing operations   |  | $                                                   | 0.49   |                                                     | $ | 0.60    |   | $        | 0.38   |         | $ | 0.28    |   | $       | 0.20   |          | $ | 0.38  |   | $ | 0.31  |   | $ | 0.40  |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Basic earnings
  per share from discontinued operations   |  | $                                                   | (0.00  | )                                                   | $ | (0.00   | ) | $        | (0.00  | )       | $ | (0.00   | ) | $       | (0.02  | )        | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.00 | )
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Diluted earnings
  per share from discontinued operations |  | $                                                   | (0.00  | )                                                   | $ | (0.00   | ) | $        | (0.00  | )       | $ | (0.00   | ) | $       | (0.02  | )        | $ | (0.07 | ) | $ | (0.01 | ) | $ | (0.00 | )
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Basic earnings
  (loss) per share                         |  | $                                                   | 0.49   |                                                     | $ | 0.60    |   | $        | 0.38   |         | $ | 0.29    |   | $       | 0.18   |          | $ | 0.32  |   | $ | 0.31  |   | $ | 0.39  |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  
|Diluted earnings (loss) per share                         |  | $                                                   | 0.49   |                                                     | $ | 0.60    |   | $        | 0.38   |         | $ | 0.28    |   | $       | 0.18   |          | $ | 0.31  |   | $ | 0.31  |   | $ | 0.39  |  
|                                                          |  |                                                     |        |                                                     |   |         |   |          |        |         |   |         |   |         |        |          |   |       |   |   |       |   |   |       |  

93.

---



|         |                                                                                       
|-------- | --------------------------------------------------------------------------------------
|Item 9.  | Changes in and Disagreements with
  Accountants on Accounting and Financial Disclosure
|         |                                                                                       
|None.    |                                                                                       
|         |                                                                                       
|Item 9A. | Controls and Procedures                                                               

Disclosure
Controls and Procedures.An
evaluation of our disclosure controls and procedures (as defined in Rule
13a-15(e) under the Securities Exchange Act of 1934 (the Act)) was carried
out as of December 31, 2007, under the supervision and with the participation
of our Chief Executive Officer, Chief Financial Officer and several other
members of our senior management. Our Chief Executive Officer and Chief
Financial Officer concluded that, as of December 31, 2007, our disclosure
controls and procedures were effective in ensuring that the information we are
required to disclose in the reports we file or submit under the Act is (i)
accumulated and communicated to our management (including the Chief Executive
Officer and Chief Financial Officer) in a timely manner, and (ii) recorded,
processed, summarized and reported within the time periods specified in the
SECs rules and forms.

Internal
Control Over Financial Reporting.Management
of Centrue Financial Corporation (the Company) is responsible for
establishing and maintaining an effective system of internal control over
financial reporting. The Companys system of internal control over financial
reporting is designed to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles. There are
inherent limitations in the effectiveness of any system of internal control
over financial reporting, including the possibility of human error and
circumvention or overriding of controls. Accordingly, even an effective system
of internal control over financial reporting can provide only reasonable
assurance with respect to financial statement preparation. Projections of any
evaluation of effectiveness to future periods are subject to the risks that
controls may become inadequate because of changes in conditions or that the
degree of compliance with the policies or procedures may deteriorate.

Management assessed the Companys systems of internal
control over financial reporting as of December 31, 2007. This assessment was
based on criteria for effective internal control over financial reporting
described in Internal Control  Integrated Framework issued by the Committee of
Sponsoring Organizations of the Treadway Commission. Based on this assessment,
management believes that, as of December 31, 2007, the Company maintained
effective internal control over financial reporting based on those criteria.

The Companys independent registered public accounting
firm that audited the financial statements that included in this annual report
on Form 10-K, has issued an attestation report on the Companys internal
control over financial reporting. The attestation report of Crowe Chizek and
Company LLC appears on page 50.

Changes
in Internal Control Over Financial Reporting.During the quarter ended December 31, 2007, no change
occurred in our internal control over financial reporting that has materially
affected, or is reasonably likely to materially affect, our internal control
over financial reporting.

|         |                  
|-------- | -----------------
|Item 9B. | Other Information

None.

94.

---



PART III

|         |                                                         
|-------- | --------------------------------------------------------
|Item 10. | Directors, Executive Officers and
  Corporate Governance

The information beginning on page 2 of the Companys
2008 Proxy Statement under the caption Election of Directors, on page 9 of
the 2008 Proxy Statement under the caption Section 16(a) Beneficial Ownership
Compliance, on page 24 under the caption Audit Committee Financial Expert
and on page 5 under the caption Code of Ethics is incorporated herein by
reference.   The Companys executive officers
are identified under the caption Executive Officers contained in Part I of
this report.

The Audit Committee of the Companys Board of
Directors is an audit committee for purposes of section 3(a)(58)(A) of the
Securities Exchange Act of 1934.  The
members of the Audit Committee are Messrs. Mark L. Smith, Chair, Walter E.
Breipohl, Randall E. Ganim and Scott C. Sullivan.

|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation

The information on page 6 under the caption
Compensation of Directors, pages 10 through 22 of the 2008 Proxy Statement
under the caption Compensation Discussion and Analysis, page 10 under the
caption Executive and Compensation Committee Interlocks, and Report of
Executive & Compensation Committee is incorporated herein by reference.

|         |                                                                 
|-------- | ----------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
  Owners and Management

The information on pages 7 through 9 of the 2008 Proxy
Statement under the caption Security Ownership of Certain Beneficial Owners
and Management.

The following table
summarizes information about our equity compensations plans by type as of
December 31, 2007.

Equity Compensation Plan Information

|                                                          |  |                                                                                                   |  |                                                                                   |  |                                                                                                                                              |         |  |  |         |  | 
|--------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------- | ------- |  |  | ------- |  | 
|Plan category                                             |  | Number of securities to be
issued upon exercise of
outstanding options,
warrants and rights
  (a) |  | Weighted-average
exercise price of
outstanding options,
warrants and rights
  (b) |  | Number of
  securities
remaining available for
future issuance under
 equity compensation
plans (excluding
  securities in column (a))
  (c) |        
|                                                          |  |                                                                                                   |  |                                                                                   |  |                                                                                                                                              |         |  |  |         |  | 
|Equity compensation plans approved by stockholders (1)    |  | 567,174                                                                                           |  |                                                                                   |  | $                                                                                                                                            | 18.9936 |  |  | 347,000 |  | 
|                                                         
|Equity compensation plan not approved by stockholders (2) |  | 6,850                                                                                             |  |                                                                                   |  | $                                                                                                                                            | 16.0625 |  |  |        |  | 
|                                                          |  |                                                                                                   |  |                                                                                   |  |                                                                                                                                              |         |  |  |         |  | 
|Total                                                     |  | 574,024                                                                                           |  |                                                                                   |  | $                                                                                                                                            | 18.9586 |  |  | 347,000 |  | 
|                                                          |  |                                                                                                   |  |                                                                                   |  |                                                                                                                                              |         |  |  |         |  | 

|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes shares issuable
  under the 1993 Stock Option Plan and shares issuable under the 2003 Stock
  Option Plan. The 1993 Stock Option Plan terminated April 12, 2003; therefore,
  no further stock options will be issued under this Plan.  Also includes shares issuable under the
  pre-merger Centrue Equity Compensation plans.  These plans were terminated as a result of the merger;
  therefore, no further stock options will be issued under these plans.

95.

---



|    |                                                                                                                                                                                                                                                                                                                   
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | Includes shares issued
  under the 1999 Non-qualified Stock Option Plan, The Company authorized 50,000
  shares for issuance under the 1999 Option Plan.  During 1999, 40,750 of these shares were granted and vested in
  three years. The options have an exercise period of ten years from the date
  of grant.

|         |                                                                            
|-------- | ---------------------------------------------------------------------------
|Item 13. | Certain Relationships and Related
  Transactions, and Director Independence

The information on page 22 of the 2008 Proxy Statement
under the caption Transactions with Management and on page 2 under the
caption Election of Directors is incorporated herein by reference.

|         |                                         
|-------- | ----------------------------------------
|Item 14. | Principal Accountant Fees and
  Services

The information on page 23 of the 2008 Proxy Statement
under the caption Accountant Fees is incorporated herein by reference.

|         |                                             
|-------- | --------------------------------------------
|Item 15. | Exhibits and Financial Statement
  Schedules

|       |                                                                                                                                                                               
|------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a)(1) | Index to Financial Statements                                                                                                                                                 
|       |                                                                                                                                                                               
|       | The index to Financial Statements is contained in
  Item 8, appearing on page 49 of this Form10-K.                                                                            
|       |                                                                                                                                                                               
|(a)(2) | Financial Statement Schedules                                                                                                                                                 
|       |                                                                                                                                                                               
|       | All schedules are omitted because they are not
  required or applicable, or the required information is shown in the
  Consolidated Financial Statements or the notes thereto.
|       |                                                                                                                                                                               
|(a)(3) | Schedule of Exhibits                                                                                                                                                          
|       |                                                                                                                                                                               
|       | The Exhibit Index which immediately follows the
  signature pages to this Form 10-K is incorporated herein by reference.                                                      
|       |                                                                                                                                                                               
|(b)    | Exhibits                                                                                                                                                                      
|       |                                                                                                                                                                               
|       | The exhibits required to be filed with this Form
  10-K are included with this Form 10-K and are located immediately following
  the Exhibit Index to this Form 10-K.         
|       |                                                                                                                                                                               
|(c)    | Financial Statement Schedules                                                                                                                                                 
|       |                                                                                                                                                                               
|       | The response to this portion of Item 15 is submitted
  as a separate section of this report.                                                                                  

96.

---



SIGNATURES

Pursuant
to the requirements of Section 13 of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on March 14, 2008.

| |                               |                                                                                 
| | ----------------------------- | --------------------------------------------------------------------------------
| | CENTRUE FINANCIAL CORPORATION
| |                               |                                                                                 
| | By:                           | /s/ Thomas A. Daiber                                                            
| |                               |                                                                                 
| |                               | Thomas A. Daiber                                                                
| |                               | President
  and Principal Executive Officer                                     
| |                               |                                                                                 
| | By:                           | /s/  Kurt R. Stevenson                                                          
| |                               |                                                                                 
| |                               | Kurt R. Stevenson                                                               
| |                               | Senior
  Executive Vice President and Principal Financial and Accounting Officer

Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has been signed below by the following
persons on behalf of the Registrant and in the capacities indicated on March
14, 2008

|                        |  |                        
|----------------------- |  | -----------------------
|/s/ Richard J. Berry    |  | /s/ Michael J. Hejna   
|                        |  |                        
|Richard J. Berry        |  | Michael J. Hejna       
|Director                |  | Director               
|                        |  |                        
|/s/ Walter E. Breipohl  |  | /s/ Dennis J. McDonnell
|                        |  |                        
|Walter E. Breipohl      |  | Dennis J. McDonnell    
|Director                |  | Director               
|                        |  |                        
|/s/ Thomas A. Daiber    |  | /s/ John A. Shinkle    
|                        |  |                        
|Thomas A. Daiber        |  | John A. Shinkle        
|Director                |  | Director               
|                        |  |                        
|/s/ Randall E. Ganim    |  | /s/ Mark L. Smith      
|                        |  |                        
|Randall E. Ganim        |  | Mark L. Smith          
|Director                |  | Director               
|                        |  |                        
|/s/ Michael A. Griffith |  | /s/ Scott C. Sullivan  
|                        |  |                        
|Michael A. Griffith     |  | Scott C. Sullivan      
|Director                |  | Director               
|                       

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Centrue
Financial Corporation

EXHIBIT
INDEX
TO
ANNUAL REPORT ON FORM 10-K

|         |                                                                                                                                                                                                                                                                                
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibits |                                                                                                                                                                                                                                                                                
|         |                                                                                                                                                                                                                                                                                
|3.1      | Restated Certificate of Incorporation of the Company
  [incorporated by reference from Exhibit 3.1 to Current Report on Form 8-K
  filed on November 17, 2006].                                                                                                                
|         |                                                                                                                                                                                                                                                                                
|3.2      | Bylaws of the Company [incorporated by reference
  from Exhibit 3.1 to Quarterly Report on Form 10-Q for the quarter ended
  September 30, 2007].                                                                                                                              
|         |                                                                                                                                                                                                                                                                                
|4.1      | Certificate of Designation, Preferences and Rights
  of Series A Convertible Preferred Stock of the Company [incorporated by
  reference from Exhibit 3.1 to Current Report on Form 8-K filed on November
  17, 2006].                                                         
|         |                                                                                                                                                                                                                                                                                
|4.2      | Certificate of Designation, Preferences and Rights
  of Series B Preferred Stock of the Company [incorporated by reference from
  Exhibit 3.1 to Current Report on Form 8-K filed on November 17, 2006].                                                                       
|         |                                                                                                                                                                                                                                                                                
|4.3      | Specimen Common Stock Certificate [incorporated by
  reference from Exhibit 4.3 to Annual Report on Form 10-K for this year ended
  Dec. 31, 2006].                                                                                                                            
|         |                                                                                                                                                                                                                                                                                
|10.1     | Registration Agreement dated August 6, 1996, between
  the Company and each of Wayne W. Whalen and Dennis J. McDonnell [incorporated
  by reference from Exhibit 10.10 to the Registration Statement on Form S-1
  filed by the Company on August 19, 1996 (File No. 33-9891)].
|         |                                                                                                                                                                                                                                                                                
|10.2     | Loan Agreement between the Company and LaSalle
  National Bank dated August 2, 1996
  [incorporated by reference from Exhibit 10.11 to the Registration
  Statement on Form S-1 filed by the Company on August 19, 1996 (File No.
  33-9891)].                                 
|         |                                                                                                                                                                                                                                                                                
|10. 3    | Centrue Financial Corporation 1999 Nonqualified
  Stock Option Plan [incorporated by reference from Exhibit 10.1 to the
  registration statement on Form S-8 filed by the Company on December 10, 1999
  (File No. 333-92549)].                                                
|         |                                                                                                                                                                                                                                                                                
|10.4     | Centrue Financial Corporation 2000 Incentive
  Compensation Plan [incorporated by reference from Exhibit 10.1 to Centrues
  Quarterly Report on Form 10-Q for the quarter ended September 30, 2001 as
  filed with the SEC on November 13, 2001].                             
|         |                                                                                                                                                                                                                                                                                
|10.5     | Centrue Financial Corporation Amended and Restated
  2003 Stock Option Plan [incorporated by reference from Centrues 2007 Proxy
  Statement].                                                                                                                                 
|         |                                                                                                                                                                                                                                                                                
|10.6     | Form of Stock Option Agreements [incorporated by
  reference from Exhibit 10.2 and 10.3 to Form 10-Q for the Quarter Ended March
  31, 2007]                                                                                                                                   
|         |                                                                                                                                                                                                                                                                                
|10.7     | Thomas A. Daiber Employment Agreement [incorporated
  by reference from Current Report on Form 8-K filed on July 7, 2006 (appears
  as Exhibit F-1 to Exhibit 2.1)].                                                                                                           
|         |                                                                                                                                                                                                                                                                                
|10.8     | Kurt R. Stevenson Employment Agreement [incorporated
  by reference from Current Report on Form 8-K filed on July 7, 2006 (appears
  as Exhibit F-3 to Exhibit 2.1)]                                                                                                           
|         |                                                                                                                                                                                                                                                                                
|10.9     | Amendment to Kurt R. Stevenson Employment Agreement
  [incorporated by reference from Exhibit 2.2 to Current Report on Form 8-K
  filed on November 17, 2006].                                                                                                                 

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|      |                                                                                                                                                                                                                                                     
|----- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.10 | Donald M. Davis Employment
  Agreement [incorporated by reference from Exhibit 10.1 to Quarterly Report on
  Form 10-Q for the quarter ended September 30, 2007].                                                                                   
|      |                                                                                                                                                                                                                                                     
|10.11 | Roger D. Dotson Employment Agreement [incorporated
  by reference from Exhibit 10.11 to Annual Report on Form 10-K for the year
  ended December 31, 2007].                                                                                         
|      |                                                                                                                                                                                                                                                     
|10.12 | Steven E. Flahaven Employment Agreement
  [incorporated by reference from Exhibit 10.12 to Annual Report on Form 10-K
  for the year ended December 31, 2007].                                                                                      
|      |                                                                                                                                                                                                                                                     
|10.13 | Heather M. Hammitt Employment Agreement [incorporated
  by reference from Exhibit 10.13 to Annual Report on Form 10-K for the year
  ended December 31, 2007].                                                                                      
|      |                                                                                                                                                                                                                                                     
|10.14 | Kenneth A. Jones Employment Agreement [incorporated
  by reference from Exhibit 10.14 to Annual Report on Form 10-K for the year
  ended December 31, 2007].                                                                                        
|      |                                                                                                                                                                                                                                                     
|10.15 | Diane F. Leto Employment Agreement [incorporated by
  reference from Exhibit 10.15 to Annual Report on Form 10-K for the year ended
  December 31, 2007].                                                                                           
|      |                                                                                                                                                                                                                                                     
|10.16 | Michael A. OGorman Employment Agreement
  [incorporated by reference from Exhibit 10.16 to Annual Report on Form 10-K
  for the year ended December 31, 2007].                                                                                     
|      |                                                                                                                                                                                                                                                     
|10.17 | Ricky R. Parks Employment Agreement [incorporated by
  reference from Exhibit 10.17 to Annual Report on Form 10-K for the year ended
  December 31, 2007].                                                                                          
|      |                                                                                                                                                                                                                                                     
|10.18 | Everett J. Solon Employment Agreement [incorporated
  by reference from Exhibit 10.18 to Annual Report on Form 10-K for the year
  ended December 31, 2007].                                                                                        
|      |                                                                                                                                                                                                                                                     
|10.19 | Non-employee Directors Deferred Compensation Plan
  [incorporated by reference from Exhibit 10.1 to Current Report on Form 8-K
  filed December 21, 2006].                                                                                         
|      |                                                                                                                                                                                                                                                     
|10.20 | Kankakee Bancorp, Inc. 1992 Stock Option Plan
  [incorporated by reference from Schedule 14A for the 1993 Annual Meeting of
  Stockholders of former Centrue Financial Corporation (Filer No. 001-15025)].                                          
|      |                                                                                                                                                                                                                                                     
|10.21 | Kankakee Bancorp, Inc. 2003 Director Short Term
  Incentive Plan [incorporated by reference from Exhibit 10.1 to Form S-8
  (Registration No. 333-104913) of former Centrue Financial Corporation (Filer
  No. 001-15025) filed on May 1, 2003].    
|      |                                                                                                                                                                                                                                                     
|10.22 | Kankakee Bancorp, Inc. 2003 Stock Incentive Plan
  [incorporated by reference from Appendix B to Schedule 14A filed on March 14,
  2003 of former Centrue Financial Corporation (Filer No. 001-15025)].                                             
|      |                                                                                                                                                                                                                                                     
|10.23 | Indenture dated April 10, 2002 between the Company
  and Wilmington Trust Company [incorporated by reference from Exhibit 10.9 to
  Form 10-K for the year ended December 31, 2004 of former Centrue Financial
  Corporation (Filer No. 001-15025)].
|      |                                                                                                                                                                                                                                                     
|10.24 | Indenture dated April 22, 2004 between the Company
  and U.S. Bank, N.A. [incorporated by reference from Exhibit 10.1 to Form 10-Q
  for the quarter ended June 30, 2004 of former Centrue Financial Corporation
  (Filer No. 001-150250].          
|      |                                                                                                                                                                                                                                                     
|10.25 | Executive Deferred Compensation Plan [incorporated
  by reference from Exhibit 10.1 to Current Report on Form 8-K filed on
  December 14, 2007].                                                                                                    

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|      |                                                                                                                                                                                                                                                                        
|----- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|14.1  | Code of Ethics [filed herewith].                                                                                                                                                                                                                                       
|      |                                                                                                                                                                                                                                                                        
|21.1  | Subsidiaries of Centrue Financial Corporation.                                                                                                                                                                                                                         
|      |                                                                                                                                                                                                                                                                        
|23.1  | Consent of Crowe Chizek and Company LLC.                                                                                                                                                                                                                               
|      |                                                                                                                                                                                                                                                                        
|31.1. | Certification of Thomas A. Daiber, the Companys
  Principal Executive Officer, pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002.                                                                                                                           
|      |                                                                                                                                                                                                                                                                        
|31.2  | Certification of Kurt R. Stevenson, the Companys
  Principal Financial Officer, pursuant to Section 302 of the Sarbanes-Oxley
  Act of 2002.                                                                                                                          
|      |                                                                                                                                                                                                                                                                        
|32.1* | Certification Pursuant to 18 U.S.C. Section 1350, as
  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, from the
  Companys President and Principal Executive Officer.                                                                              
|      |                                                                                                                                                                                                                                                                        
|32.2* | Certification Pursuant to 18 U.S.C. Section 1350, as
  adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, from the
  Companys Senior Executive Vice President and Principal Financial and
  Accounting Officer.                                       
|      |                                                                                                                                                                                                                                                                        
|*     | This certification is not
  filed for purposes of Section 18 of the Securities Exchange Act of 1934, as
  amended, or incorporated by reference into any filing under the Securities
  Act of 1933, as amended, or the Securities Exchange Act of 1934, as
  amended.

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